Use the positive effects of automation to plan ahead
Positive economic health of manufacturing because of automation, advice about the need to plan ahead, and expansion plans for an automation trade association and standards group were among views shared at the A3 Business Forum in January. The Association for Advancing Automation (A3) annual meeting covered topics related to its constituent organizations, the Robotic Industries Association (RIA), Motion Control and Motor Association (MCMA), and AIA (Advancing Vision and Imaging).
Manufacturers plan ahead
Automation is the hero of the U.S. manufacturing growth story because advancing technology creates jobs and opportunities as it displaces some people and creates better jobs with higher pay. Automation helps manufacturing employment, (highest in 11 years), aids exports, and adds productivity, according to Dr. Alan Beaulieu, president, ITR Economics, who gave a global 2019 economic outlook and forecast.
Because of carefully tuned algorithms, ITR claims 94.5 to 99.7% accuracy for eight key economic indicators.
Looking at the rate of change for a 12-month average growth rate is particularly useful for organizations. Beaulieu, author of books including “Prosperity in the Age of Decline” and “Make Your Move,” is chief economist for several trade associations and industry speaker, with twin brother Brian, at various events.
He said 2018 growth of 3.9%, while revised upward, is not sustainable because of the large size of the U.S. economy, and recessionary pressure will likely come in the second half of 2019 in some markets.
Economic growth will resume from 2020 to 2022. “What do you need to do to get ready for that?” he asked, or “Competitors will outdo you.”
Preparing for economic downturns
However, continued U.S. deficit spending, inflation, healthcare costs, demographics, and mounting interest payments will lead to an economic depression (with a D) around 2030. Without reductions in U.S. government spending and surplus paydowns of the massive debt by 2020, the 2030 depression is unavoidable, Beaulieu explained, with no way to “spend out of it” as the ability to borrow more ends.
ITR Economics advocates a pro-business approach and offers recommendations to businesses. Options include gaining awareness and foresight within your markets, borrow during prosperity, and pay down debt in time to get the resources, tools, and talent to prosper during pending downturns. Winners during recessions and depressions have saved cash to buy assets at fire-sale prices and emerge on the other side with many times the wealth. Complete any acquisitions by 2025 or face ridiculously high interest rates. If you’re selling, plan to sell your business by 2026 to ensure that any multi-year earn out clauses do not extend into the depression.
2019 automation market, workforce training
Alex Shikany, vice president of AIA, part of A3, said optimism continues to be very high in the machine vision, motion control, robotics manufacturing industries. Many indicators suggest solid growth, but he noted a softening in the market, slower growth, in the last three months. Among the largest concerns for manufacturers, Shikany said, are attracting and retaining a quality workforce, price increases in raw materials, trade uncertainties, and rising health care and insurance costs.
Shikany, citing various sources, said 2.4 million jobs will be unfilled because of the skills gap by 2028, and, as a result, $454 billion in economic output is at risk of being lost. While automation may eliminate as many as 75 million jobs globally, 133 million new jobs will be created by automation, according to the World Economic Forum, Future of Jobs Survey, 2018. Shikany suggested workforce training will become more important as a result and humans and machines will work more closely.
A3 association growth
A3 announcements from president Jeff Burnstein included a plan to increase A3 branding beyond the roles of three constituent associations (AIA, RIA, MCMA) and encouragement for attending the Automate show April 8-11.
Think again about economic cycles and how your business is planning ahead by investing in automation technologies, workforce, and other areas as needed to accelerate through economic downturns.
Mark T. Hoske is content manager, Control Engineering, CFE Media, firstname.lastname@example.org. A3 is a CFE Media content partner.
A3 can provide more information at www.a3automate.org/one-a3.