Chinese robotics and the return of American manufacturing.

Posted on October 10, 2020 by Esoteric Staffing

Slogans of the preceding three Industrial Revolutions: Made in the United Kingdom. Made in the USA. Made in China. Slogan of the Fourth Industrial revolution: Made by Robots!

"Bring American Companies Home Act" was sponsored by Congressman, Mark Green in 2020. "Bring Jobs Home Act" was proposed by Congressman John Walsh in 2014. Green and Walsh are not the only people wistful for the return of manufacturing jobs to America. If you've listened to the news during the last decade, you've surely heard about the loss of American jobs to low-cost countries around the world, with China attracting the most attention. Will those jobs ever come back to America?

Manufacturing jobs are disappearing in China.

Manufacturing jobs are ceasing to exist. China is installing robotics systems at a pace that far outstrips the rest of the world. China already accounts for a fifth of the world's industrial robots, with every third new one being installed there. Meaning "jobs" that moved to China are ceasing to exist as jobs that could move back. In the best case, if the manufacturing process moves back to America, it will surely be automated to remain competitive.

Robots are cheaper than human workers. Especially Chinese robots.

Robots are becoming cheaper than many human workers, in part because of the falling costs of machines. The average unit price per robot has dropped 11% between 2011 and 2016, according to Oxford Economics. The same robots decreasing in price are increasing in capability. Robotic systems and equipment Made in China are coming on the market strongly, driving down prices even more. There are dozens of Chinese robotics suppliers that have entered the European and American markets over the last few years. These are Chinese companies that were formed 5-10 years ago and have already scaled to a size and capability as many established American and European robotics suppliers.

America wants manufacturing jobs. America’s workers do not.

Baby Boomers make up 27% of the American manufacturing workforce. Manufacturers are seeing 10,000 Baby Boomers retire each day. Unfortunately for manufacturers, millennials and Gen Xers are not interested in filling the jobs that are available. As a result, experts expect an enormous skills gap between 2018 and 2028. It’s estimated that 2.4 million positions will go unfilled or will be filled by robotics.

America needs manufacturing and automation. Not jobs.

Rather than being wistful for the return of jobs that no longer exist, America needs to lead innovation and capability for advanced robotics. We need automation to manufacture competitively and at scale; across the entire supply chain. Reshoring to America will be successful when the entire supply chain is producing quality goods at a globally competitive cost structure. The current benchmark of competitive cost structure is China. Their cost advantage is becoming less dependent on low-cost labor and increasing dependent on automation.

The country that leads the robotics revolution will lead the Fourth Industrial Revolution. America needs to invest in robotics. The jobs will follow.