MT Magazine November/December 2024

FEATURE STORY

THE INDUSTRY OUTLOOK ISSUE

14

demographic change—corresponding to an increasing ratio of older to middle-aged workers—is associated with greater adoption of robots and other automation technologies across countries.”

A Solid Solution An important solution to the problem, and one that is certainly able to shoulder a great deal of the burden of finding, training, and keeping good employees, is becoming clearer: Automation. Automation enables companies to focus on their good people, allowing them to perform jobs that may be more engaging to them, offloading some of the more repetitive tasks to a robot. Engaged employees stick around. Those who are just punching the clock are simply doing just that. A Generational Shift Here’s a rather frightening fact: According to the U.S. Census Bureau, by 2030, every member of the baby-boom generation – which accounts for about a fifth of the overall population – will be 65 or order. Which could have a big impact on your staffing situation in the not-too-distant future. But between an aging workforce and automation lies the opportunity to grow the use of robots. When it comes to robot density – the number of robots per 10,000 employees – the United States has a long way to go compared to other countries, suggests Ian Stringer, vice president of data strategy at AMT – The Association For Manufacturing Technology. In South Korea, there are 1,012 robots per 10,000 employees, the highest density in the world. The United States is 10th, with 285 robots per 10,000 employees – just edging out Slovenia, which has 284. Stringer cites research conducted by MIT and the National Bureau of Economic Research that shows a correlation between an aging population and the deployment of robots, which could be good news for the United States on a national scale. In other words, South Korea, Germany, Japan, and other countries may have more robots per 10,000 employees, but that’s because their population is aging. However, as Daron Acemoglu and Pascual Restrepo, authors of “Demographics and Automation,” write: “We argue theoretically and document empirically that aging leads to greater (industrial) automation, and in particular, to more intensive use and development of robots. Using US data, we document that

Not Getting Any Younger According to 2023 numbers from the U.S. Bureau of Labor Statistics (BLS), in durable goods manufacturing, which has 10,065,000 total employees, most employees are 35 years old or older:

• 35-44: 2,155,000 • 45-54: 2,278,000 • 55-64: 2,057,000 • 65 and up: 566,000

That’s 7,056,000 employees in durable goods manufacturing who are in the middle-aged and above cohort – roughly 70% of the entire sector – which shows that there are evidently greater opportunities for more automation deployments. So, at the level of an individual company, if there is a significant number of middle-aged workers, then there is a trend toward using more automation. Which means that if a company with that demographic cohort chooses not to use automation, it is likely to fall behind competitors that do. And if we go back to the the relative disinterest of Gen Z and many millennials in working from, well, work, then there is another way to look at the BLS numbers of people in manufacturing, which also makes automation make sense: While that is the number of people presently employed – a total of 5,165,000 – (1) there is apparently some increased degree of disinterest, particularly post-COVID, in staying at a job and (2) a growing demand for employees. Which goes to the point of keeping the solid employees you have on staff and increasing automation – because the number of people getting older isn’t declining. Take It From the Top What’s more, Stringer points out that there are advantages to operations using automation, and he references the Modern Machine Shop Top Shops survey conducted by Gardner Business Media (GBM). Top Shops is an annual benchmarking survey, explains Dave Necessary, executive vice president, development, GBM. The current study is the 13th. Some 3,500 shops have participated. What Top Shops does is calculate the highest performers compared with other operations. The results are startling. For example, while top shops average 80% capacity utilization, other shops average just 67%. Top shops achieve a 15% profit margin. Other shops? Five percent. • 16-19: 133,000 • 20-24: 722,000 • 25-34: 2,155,000 • 35-44: 2,155,000

robots substitute for middle-aged workers (those between the ages of 36 and 55). We then show that