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Netteligent
steve.freestone
I think you hit the nail on the head.
Made in America, by robots
Dylan McGrath
8/20/2012 9:21 PM EDT
There was a sliver of good news last week for Americans concerned about the flight of electronics manufacturing to Asia. IPC, a trade group that represents printed circuit board manufacturers and other electronics firms, reported that electronics manufacturing operations with a total value of at least $2.5 billion are expected to be "on-shored" (brought back to North America) in the next three years.
The IPC study put some numbers around what anecdotal evidence has been suggesting for years—the companies that are bringing manufacturing back to the U.S. cited quality control as the primary reason.
As far as creating jobs in the U.S. and our North American neighbors are concerned, the return of $2.5 billion in electronics manufacturing that had been shifted overseas beats a sharp stick in the eye. But it's not possible to know how many other electronics manufacturing operations will be offshored over the same three years. Net-net, more manufacturing (and jobs) may end up leaving the U.S. than coming back in.
Another trend in the spotlight last week might also bode well for U.S. manufacturing and job creation (though it might not seem like it). A New York Times piece published Saturday detailed how the rise of factory automation throughout the world is changing manufacturing.
It may seem counterintuitive to suggest that the use of robots to replace factory workers could actually have an upside for U.S. workers. But the principle reason that so much manufacturing has fled the U.S. and other western nations for China and other emerging economies is that the people there were willing and able to do the work for less money than workers in the U.S. and Europe. As more human labor is taken out of the equation, offshoring becomes less and less attractive, especially in light of concerns about quality control.
A factory where most of the work is done by robots won't create near as many jobs as one where the work is done by people. But a robot-filled factory in the U.S. will create more American jobs than an automated or un-automated factory in China.
As George Leopold pointed out (link here), there are also indirect links between technology innovation and job creation. Even if robots are doing the heavy lifting, the infrastructure and supply needs of a thriving factory translate into jobs.
It's natural for those of us who work for living to snarl at the idea of machines replacing people on the factory floor. But if the factory floor jobs in question are not going to be in the U.S., anyway, this trend could actually be good for the U.S. economy and U.S. workers. Tech workers may certainly need to acquire new skills, but more products built in the U.S. more efficiently will spur funding for innovation and other products, ultimately creating more work and improving U.S. competitiveness.
Related stories:
The IPC study put some numbers around what anecdotal evidence has been suggesting for years—the companies that are bringing manufacturing back to the U.S. cited quality control as the primary reason.
As far as creating jobs in the U.S. and our North American neighbors are concerned, the return of $2.5 billion in electronics manufacturing that had been shifted overseas beats a sharp stick in the eye. But it's not possible to know how many other electronics manufacturing operations will be offshored over the same three years. Net-net, more manufacturing (and jobs) may end up leaving the U.S. than coming back in.
Another trend in the spotlight last week might also bode well for U.S. manufacturing and job creation (though it might not seem like it). A New York Times piece published Saturday detailed how the rise of factory automation throughout the world is changing manufacturing.
It may seem counterintuitive to suggest that the use of robots to replace factory workers could actually have an upside for U.S. workers. But the principle reason that so much manufacturing has fled the U.S. and other western nations for China and other emerging economies is that the people there were willing and able to do the work for less money than workers in the U.S. and Europe. As more human labor is taken out of the equation, offshoring becomes less and less attractive, especially in light of concerns about quality control.
A factory where most of the work is done by robots won't create near as many jobs as one where the work is done by people. But a robot-filled factory in the U.S. will create more American jobs than an automated or un-automated factory in China.
As George Leopold pointed out (link here), there are also indirect links between technology innovation and job creation. Even if robots are doing the heavy lifting, the infrastructure and supply needs of a thriving factory translate into jobs.
It's natural for those of us who work for living to snarl at the idea of machines replacing people on the factory floor. But if the factory floor jobs in question are not going to be in the U.S., anyway, this trend could actually be good for the U.S. economy and U.S. workers. Tech workers may certainly need to acquire new skills, but more products built in the U.S. more efficiently will spur funding for innovation and other products, ultimately creating more work and improving U.S. competitiveness.
Related stories:
- Does manufacturing create jobs, spur innovation, or both?
- Yoshida in China: Workers can't afford products they make
- Panel defines strategy for U.S. advanced manufacturing
- Rebuilding America: U.S. plans manufacturing webcast
- U.S. manufacturing effort targets regional clusters
- Needed: A U.S. manufacturing renaissance
- U.S., European manufacturers join forces to compete with China
- Time to play hard ball on tech manufacturing
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prabhakar_deosthali
8/21/2012 5:29 AM EDT
The missions like the "Curiosity" , where complex and perfect engineering is a must, show that US is much ahead of the rest of the world technologically. If this strong technological base is used to have state of art mass manufacturing industry for consumer electronics then the American businessmen won't to have to look offshore for saving a few dollars.
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ManmohanManu
8/21/2012 12:26 PM EDT
Informative article. I work for McGladrey and there's a annual report on the State of Manufacturing on the website " http://bit.ly/IzVhuU ", with related information you may find useful.
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hm
8/21/2012 7:37 PM EDT
This is good news. Along with manufacturing, much of design work will soon return to US. It is not only labour cost justification, but overall inclination of top management to bring back the work to US.
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dylan.mcgrath
8/21/2012 7:45 PM EDT
@hm-I think it's potentially good news from the perspective of U.S. tech workers. But while I think we'd like to think that its the overall inclination of top management to bring work back to the U.S., I'm not sure we've seen evidence of that.
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TFCSD
8/22/2012 1:49 AM EDT
I was a steelworker in the 1990's and maintained the instrumentation, electronics, and electrical at the mills. One day I was talking to an operator in the air-conditioned control room and he made the comment that no one in the mill was a real "steelworker" as in the past because all they did was sit around and watch the machines work on the nearly 3000 degree steel. All the remaining humans in the mill were there to setup, operate, service, or repair the manufacturing systems (management was an overhead cost burden). As automation becomes too fast for people to interact due to increased production demands, workers will become nothing but machine "managers" who make sure the machines are performing correctly. Since future automated production gains will depend less on manual labor, labor will not be the major deciding factor to where factories are setup. Since labor skills will likely be “equal” in most major places, it also will be less of a factor. What will be the deciding factor will be the cost of transportation. Thus moving factories closer to where it is consumed (i.e. USA) will be the deciding factor and by default the US will benefit. This is ending up being closer to 3D printing being the ultimate solution (no labor, no storage, no delay, and close to consumer).
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CooperMW
8/22/2012 7:54 AM EDT
Great point.
Yes, it's not the wage, not the skill set, it's the local market.
with rising Asian economies, I don't see why manufacturing shifts back to US
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nicolas.mokhoff
8/22/2012 10:33 AM EDT
Poor quality was given as one of the reasons for the latest in-shore statisitcs of some electronics companies. 'Curiosity' does prove the U.S. has a technological edge. But how does that reliability and by extension quality control translate to everyday electronics, whether in industrial or consumer applications? The other question is, can consumer companies compete if their products are made to better qualiy and last longer; it goes against the grain of their business model. It's somehow dreamy to think principles of automation can be applied for comtitive advantage in all segments of the electronics industry. For the IPC and its members we now know in-sourcing is becoming a trend. Not sure that trend can be extrapolated across the board to all electronics or hi-tech.
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chipmonk
8/22/2012 12:27 PM EDT
Essentially, by getting in the bed with China the US capitalist and political system has overplayed their hand and created their own Frankenstein's MONSTER that is slowly but surely siphoning vitality from America.
Nearly 20 yeara ago we had created worlds first fully robotic line for assembling flip chip CPUs and Gallium Arsenide PAs to organic substrates. Later we created robotic lines to manufacture even those multi layer organic substrates ( since labor cost and yield were issues ). But robotic manufacturing in the US came to a halt as the two major semiconductor Corps that I had done this work for discovered a source of really low cost robots of the carbon-based variety - in SE Asia and China.
Now I hear that even FoxConn ( real name: Hong Hai , Apple's Taiwan based assembly provider that has huge factories in China ) is using Robots in their Chinese factories.
The cat is out of the bag and just Robotics would no longer guarantee competitiveness to US mfr.s who want to "on - shore" as a last stand.
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steve.freestone
8/30/2012 2:17 PM EDT
I think you hit the nail on the head.
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wilber_xbox
8/22/2012 1:56 PM EDT
if Quality control is indeed the main factor for in-shore jobs then what kind of jobs are we talking about? i guess most of the jobs will be blue collar. Also, as rightly pointed out in article, if most of such jobs are automated then i do not feel much to cheer about.
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chipmonk
8/22/2012 4:59 PM EDT
The main job growth by switching to Robots would NOT be in their operation but in mfr.ing and programming the Robots themselves. So long as that is done in the US and not outsourced again new skilled jobs will be created for machine vision & sensor experts, mech. & electrical engrs, machinists, PCB mfrs. and assemblers, programmers, process & tooling experts, maintenance techs. etc. etc. If ea. 4 or 5 outsourced production worker ( @ $ 15 k a year ) is replaced by a $ 250 k robot, that would create at least $200k worth business for Robot Mfr. and @ 2 robots per Tech about $ 40 k worth of jobs for operating / programming / maint tech on an ongoing basis. Thus the $ 2 billion a year worth of "on - shore" prod. mentioned in the article could mean as many as 20 k new skilled jobs here with all the usual benefits to the local economy and tax base.
Sounds like a good deal for all except for the handful who have been making billions by outsourcing US manufcaturing and technology to China.
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Andrew at Adept
8/23/2012 3:06 PM EDT
If we are on-shoring using robots, shouldn't we be using US made robots too?
The largest robot makers are European or Japanese, and soon to be Chinese.
Adept Technology (as the New York Times article and videos point out) is the leading US robot manufacturer and should be included in any discussions about re-shoring using robotics.
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dylan.mcgrath
8/24/2012 12:04 PM EDT
Good point. Although, like anything else, there are many factors that go into the decision on equipment.
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RWatkins
8/25/2012 9:44 PM EDT
A small observation: The Screaming Circuits type companies who make prototype quantities are already building with robots. Try finding humans who can accurately and repeatably place 1200 parts on a single circuit board ranging from 0201 chips to 0.5mm pitch 300-ball BGAs, with a few 2x2mm QFN/DFN chips thrown in for good measure! The real jobs at such companies are actually setup, configuration, maintenance, management, customer service, etc. No more little old ladies with paint brushes painting radium onto the dials of instruments!
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cdhmanning
8/26/2012 7:35 PM EDT
To suggest that Curiosity could not be built elsewhere is just sheer arrogance. That arrogance must be overcome to be able to understand, and then fix, the real problems.
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Moonshine
8/29/2012 4:53 PM EDT
The Japanese use some of the "freed up" labor from automation to improve quality including training the remaining workers and the robotics tech types.
We tend to squeeze every cent of profit out for wages or shareholders. Penny wise and pound foolish?
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GPBobby
8/30/2012 2:39 AM EDT
I have long wondered about the supposed labor cost advantage of manufacturing overseas if the biggest percentage of the assembly is robotic anyway. Even if, the standard of living in China, India and other not-so-third world countries has risen, partly eliminating any labor cost advantage. If we were talking shirts here, economics would send the factories to fourth-world places and the cycle would repeat.
But there is a big difference between a shirt and a smart phone. Quality is an issue. Unlike '70s cars,
built with just enough quality to get through the warranty, today's miniaturized precision electronics require high quality control to even work coming off the line. A pent up supply of jobless workers ready to be retrained, governments ready to give large tax breaks for factories, and possibly a whiff of some tax law changes upcoming to remove penalties of repatriating offshore cash are some of the reasons we can look forward to at least a trickle of electronics manufacturing jobs returning. No, there won't be as many due to robotics, but today we we'll take all we can get. And I doubt transportation costs will be significant. A single 40 ft sea container can hold a lot of iPhones.
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Netteligent
9/22/2012 11:23 PM EDT
I have listened to many sides and respectfully disagreed with you.
Made in America is a myth and general manufacturing will not come back to America for many reasons.
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