Restructuring manufacturing

Date posted: November 22, 2012

Although manufacturing in the United States and in North Carolina has shrunk from what it once was, it still accounts for almost 25 percent of total economic output in our state. But there is a great deal of worry about the future of manufacturing and whether any will remain domestically. N.C. State University’s Mike Walden explains the trends that economists see.

“Well … there have been two big changes in manufacturing in the last 40 years. One has been the replacement of people working in factories with machines and technology. And this has really happened all over the world, not just domestically.

“And secondly has been the movement of some of our companies — manufacturing companies — here in the U.S. to foreign countries in order to access cheaper labor.

“Now when economists look into the future we actually see trend number one continuing. We see manufacturing moving more to a situation where it’s machines and technology that (are) really producing the products rather than people. And so in some sense we think that’s going to trump the attraction of manufacturing companies to areas with cheaper labor.

“And so what we’re looking at, for example, is the increased use in robots in manufacturing and new manufacturing processes that I don’t fully understand, but they’re called adaptive manufacturing and 3D manufacturing. We think these technologies, if you will, will be the new look of a factory in the future, which means that low-cost labor is not going to be as compelling of a reason to bring a manufacturing company to a particular area or location, which again means … this may actually help the U.S. regain some of the manufacturing that is lost in the past.

“If a lot of the losses that we have suffered in manufacturing companies moving offshore has been they’re going to where labor is cheaper and labor is no longer going to be as important as it was in the past, then many economists are thinking manufacturing’s going to come back to the U.S. because, quite frankly, this is where still the biggest market is. So we may be in store for a big change in manufacturing that will actually benefit the U.S. in terms of upgrading manufacturing in our country.”

 

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