Adam Honig is the CEO and cofounder of Spiro.AI and is passionate about helping companies grow using artificial intelligence.
getty
The manufacturing industry has been hit hard recently. It's been a trying time to modernize and take advantage of new tech since there have been events—the pandemic, wars, labor shortages, supply chain bottlenecks—that have posed significant challenges for the industry.
What we're seeing now is an inflection point. I believe the manufacturing industry is poised for takeoff to a height we've not seen in years.
It's Not Your Father's Manufacturing Industry Anymore
Before we get into why, let's set the record straight: When people think of the manufacturing industry, they probably jump to Henry Ford and images of long conveyor belts and countless parts moving between giant machines—or huge forges with red-hot metal being cast into molds. The common thread is often that these factories are enormous, taking up whole city blocks.
The reality is that while there are nearly 250,000 manufacturers in the U.S. alone, 90% of them are small- or medium-sized businesses, based on the National Association of Manufacturers (NAM). And at those 250,0000 companies, there are 13 million workers—the most since 2008.
So while people may think of the manufacturing industry as this big, lumbering thing that hasn't evolved in years, that misconception couldn't be further from the truth. Not only that but manufacturing today is techy. According to Chad Moutray, chief economist of the National Association of Manufacturers, "Manufacturers have doubled down on just a whole host of disruptive technologies over the last couple of years."
When I recently spoke with Chad on my Make It. Move It. Sell It. podcast, we discussed a number of things, including the current state of the industry.
The truth is, the manufacturing industry is flush with a lot of cool tech, spanning automation, augmented reality, AI and more. Already, manufacturing facilities have robotic assembly lines to streamline production processes thanks to Industry 4.0 efforts. They use augmented reality to train workers about complex tasks. We see AI helping with predictive maintenance, quality control and supply chain optimization.
And while the industry itself may be different than how people imagine it, there are events happening that mean something big is on the horizon.
Poised For Change
Amidst all the cries of a looming recession (and while that still may happen, this has turned into a constant debate for years, it seems), there's also something interesting happening. Reshoring and nearshoring efforts are booming. With the CHIPS and Science Act and the Inflation Reduction Act, there's monumental investment happening currently in the U.S.
This is exciting to hear because a lot of the headlines would make you believe that we’re sending jobs overseas, or that AI is replacing jobs. But in fact, the manufacturing industry continues to thrive and drive innovation in the U.S.
Case in point, manufacturing construction is up a whopping 70% over the last 12 months and currently tracking at a $189 billion annual rate. This means more factories, more production capability and more jobs. There are already over 600,000 open manufacturing jobs, and Goldman Sachs estimates we'll need another 250,000 over the next couple of years.
What this means is the manufacturing industry may be on the verge of a supercycle. It’s an exciting time for those watching the industry, especially knowing that technology offers huge advantages for those who embrace it. The question is, how will manufacturers respond?
Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?
