Even though the US economy is the largest in the world by nominal GDP, it was a crisis in the manufacturing sector that prompted the US Government to act to save the industrial sector over the last decade. Here, Mark Howard, United States country manager at EU Automation, investigates how the US has turned it around.
On the face of it, the US manufacturing sector accounts for 11.6% of GDP, employs over 12m people and makes up two-thirds of all exports. Look below the surface, however, and the economy hasn’t always been as healthy. From about 1980 to 1985, and then again from 2001 to 2009, the US experienced a greater decline in manufacturing jobs even than that experienced during the Great Depression.
According to the Information Technology & Innovation Foundation in the US, it is estimated that between a third of all manufacturing jobs were lost between 2001-2009.
The manufacturing crisis has been attributed to a variety of causes, from an annual trade deficit, a reliance on outsourcing and the growth of domestic industries such as finance, construction, real estate, and services. However, probably the biggest reason for many is China’s meteoric rise following its entry into the World Trade Organisation (WTO) in 2001, which MIT economists have directly attributed to the loss of 560,000 American jobs.
Having stemmed the loss of manufacturing jobs, the US has more recently engaged in a program to better position the industry to face the challenge of advanced manufacturing in the 21st Century.
On January 15, 2014, the then-president Obama gave a speech at North Carolina State University, where he set out his vision of a new phase of manufacturing innovation. In it, he talked about Manufacturing USA, the brand name for a policy initiative called the National Network for Manufacturing Innovation (NNMI).
The NNMI is a network of 14 research institutes designed to foster the improved design, development, and commercialization of innovative new manufacturing technologies. The institutes are located in regions around the US making the best use of the local skills and resources available and concentrating research in a specific area.
The institutes range in specialisms, covering areas including additive manufacturing, robotics, design engineering, smart manufacturing, lightweight and advanced materials and composites, power electronics, photonics, flexible electronics, cell regeneration, clean energy, and biopharmaceuticals.
The Manufacturing USA program is administered by the interagency Advanced Manufacturing National Program Office (AMNPO), which works in partnership with the Department of Defense, the Department of Energy, NASA, the National Science Foundation and the Departments of Education, Agriculture, Health and Human Services (HHS) and Labor.
Some of the institutions have a greater focus on digital technologies than the others. For example, the Advanced Robotics Manufacturing (ARM) Institute was established to, “develop, demonstrate and accelerate the early adoption of novel robotic solutions.” Its four overarching goals are focused on empowering American workers to compete with low-wage workers abroad; helping the creation of new jobs to secure US national prosperity.
Another, the DMDII, is the hub for digital manufacturing and design innovation. In a promotional video outlining the institution’s work, Caralynn Nowinski Collens, managing director of the DMDII says, "We're the place where companies of all sizes meet up with innovators to plot the future of manufacturing. This is where you take things like data and artificial intelligence and the Internet of Things and piece it all together to figure out how we can advance an entire industry."
To achieve this, the institution has four ‘technology thrust areas’. The first is called Design, Product Development, and Systems Engineering; the second is called the Future Factory; the third looks at creating agile, resilient supply chains; and all of this is underpinned by a focus on cybersecurity in manufacturing.
The program is making quick progress. An independent assessment of Manufacturing USA by professional services firm Deloitte found that the first eight institutes, established between 2012 and 2016 have, “reached a critical mass of valuable connections among participating companies, universities, and other entities.”
The network now has 830 industry members, two-thirds (548) of which are manufacturing firms, including 361 small businesses. The network has delivered or is working on delivering, around 200 major applied research projects, which have reached out to 28,000 people including students from twelfth grade to university, as well as manufacturing employees and veterans.
Despite the successes, the U.S. still has challenges ahead in the journey to digitalization and initiatives such as Manufacturing USA are going a long way towards solving these. But, considering the success of the last decade, what could be in store for the next?