What Does the Future of Manufacturing Hold?
10. September 2014
Dividing the manufacturing industry by region and sector, an ambitious study attempts to ferret out its future through 2050, with some interesting results. Valentijn de Leeuwm, VP ARC Advisory Group, shared the findings in a webinar entitled: The Future of Manufacturing: Scenarios for Investment in Manufacturing through 2050.
Some key takeaways:
Sustainability: Industry will undergo major restructuring and modernization due to the pressure for sustainability, which will be less and less ideological and more driven by necessity and scarcity.
Reshoring: Technology-enabled re-shoring of small-scale production (mass customization) will require traditional automation to instrument, automate, and connect new categories of devices to enable the industrial Internet of Things (IoT).
Connectivity: Data from a single or multiple plants must often be aggregated, integrated with supply chain and business data, analyzed, and exploited to enable what ARC refers to as “information-driven manufacturing.”
de Leeuwm placed “rubber and plastics” in the global innovation for local markets group, along with automotive, electrical/electronic, and chemicals. On a regional basis, Africa and “Emerging Asia” were classified as “factor-driven” economies, with Latin America and the Middle East labeled as “efficiency-driven” and Europe, North America and Developed Asia as “innovation-driven.”
In terms of investment growth, the study sees the highest rates in Africa (7%), followed by Latin America (6%), with Emerging Asia and the Middle East both at 5%. Europe is forecast to see 4% growth, while North America and Developed Asia come in at 3%.
The study forecasts that the global innovation for local markets industry group, which includes plastics, will grow steadily but slowly and then be overtaken in investment by the technology innovators industry group (machinery, semiconductors, pharmaceuticals), after 2025.
In its “most likely scenario”, the study forecasts that industrial production will grow worldwide until at least 2050.
Efficiency-driven economies will experience the highest growth, and innovation-driven economies will also continue to grow and remain important areas for investment, largely because manufacturing has become a high priority as a source of social and economic development. In factor-driven economies, industrial production will slowly grow and accelerate after 2030, but remain small at world scale.
de Leeuwm believes local sourcing will be a big driver of manufacturing in the future, regardless of the region. “We will probably produce more locally,” de Leeuwm said. “We foresee large plants making commodities at a very large scale, then shipping materials, with things made locally.”
He was most interested in the potential impact a more connected manufacturing industry could have on efficiency. “We believe optimization will become more and more large scale,” de Leeuwm said. “Today we optimize a plant or line, in the future we will do several plants together, real time.”