The American manufacturing ecosystem is experiencing one of the biggest shifts in its history, fueled by technology and a lack of available workers. Over the last few decades, the percentage of U.S. workers employed in manufacturing has plummeted. It has plummeted to less than 8%, a stark decline from almost 25% in 1970. Today, manufacturers are in the midst of a decades-long skilled labor shortage. This is a puzzling conundrum, considering how the labor market is otherwise going quite well – current employment levels are strong.
New data reveals that nearly one out of every five U.S. factories isn’t able to fully use their capacity. They blame the problem largely on a lack of workers who are ready and able. As the manufacturing sector starts to grapple with these pressures, automation has risen to the forefront as the answer. New technologies such as artificial intelligence and robotics have dramatically transformed the industry’s productivity. Today, factory owners are able to make a lot more products with a lot less labor.
Under President Donald Trump, this administration has fought hard to upend global trade in a misguided attempt to restore a bygone era of American manufacturing jobs. As part of this strategy, some of Trump’s tech allies have invested in companies focused on further automating manufacturing processes. Each of these investments are aimed at creating and rolling out robots powered by AI that do their work. They are intended to replace specific jobs and assist in addressing labor shortages.
Elon Musk, CEO of Tesla, is one of Trump’s most important allies. He’s truly, deeply convinced that humanoid robots could be the foundation of a cocktail of connected industries. Musk considers this technology a next big growth driver for his company, widely known for its electric vehicles. At the same time, Jeff Bezos is doing everything he can to accelerate the automation revolution. He was an early investor in Figure, a company developing humanoid robotics for manufacturers and warehouses.
In 2022, Intrinsic, a robotics software company funded by Alphabet, acquired Vicarious. This purchase followed closely after Vicarious had roused a remarkable $250 million in investments from famous supporters that included Bezos, Musk, and Meta CEO Mark Zuckerberg. This surge of capital is a strong signal of increasing demand for automated solutions across the manufacturing sector.
During a recent roundtable, Jensen Huang, CEO of NVIDIA, spoke of AI as a transformative technology for manufacturing. In his first inauguration speech, he said the advent of AI would bring about “different kinds of factories.” In addition to manufacturing jobs, this development will create cumulative jobs in construction, including new trades such as plumbing and electrical work. Huang believes that AI will drive productivity surges for companies that adopt the technology, enabling them to expand their workforce as output and revenue increase.
“New jobs will be created, some jobs will be lost, every job will be changed.” – Jensen Huang
While there is plenty of optimism surrounding automation, the opinions vary sharply between industry experts on what it means for jobs. Yong Suk Lee, an economics and technology professor at the University of Notre Dame, noted that some of Trump’s tech allies and trade advisers hold opposing perspectives on automation’s role in the workforce.
As automation technologies advance, companies like Vicarious are positioning themselves to help manufacturers “reduce both your costs and person-hour needs.” Humanoid robots have the potential to transform all kinds of other industries. Figure is excited to see this novel technology – which we believe has applications that extend well beyond manufacturing – deployed in industry.
According to Tye Brady, chief of robotics development for Amazon, we have to bring technology in. He’s convinced that it can help make today’s workplace infinitely safer and more productive. Making experienced workers feel valued and supported must be the goal—freeing them to pursue skill improvement and creativity by rethinking workplace interactions should be on the agenda.
“Our goal is to ensure these systems improve safety and productivity. Technology should be used to help us retain and grow our talent through skill development and reimagining how we make our workplace better.” – Tye Brady
We believe the implications of these developments go well beyond the creation of new jobs. Advocates of revitalizing American manufacturing believe that President Trump’s initiative is essential for our economic wellbeing. Kush Desai emphasized that “the importance of President Trump’s push to reinvigorate American industry goes beyond creating good-pay jobs for everyday Americans.”
Though automation offers the potential of greater efficiency and productivity, it has the important potential to determine the shape and future of our workforce. As manufacturers rely more on technology to fill the gap of a shrinking workforce, the work may change as well.
