Embracing the future: Four industrial trends for 2024

Set against a backdrop of economic downturns, labor shortages, and supply chain disruptions to name a few, business leaders stand at a crossroads. It is evident that those who strategically invest in their workforce and cutting-edge technologies will not only weather the storms of today, but will emerge as thriving trailblazers in the years to come.

In this transformative landscape, where innovation intersects with necessity, here are a few trends for this year that I think will redefine the way businesses work globally:

1)   Labor shortages will continue to be a pain point for business leaders

Businesses in the industrial world have been facing serious labor shortages, and this challenge is likely to persist in 2024. While the latest Job Openings and Labor Turnover Survey points to the labor market generally cooling in the US, news on the manufacturing sector remains downbeat. In fact, over 70% of US manufacturers listed attracting and retaining a quality workforce as a primary struggle.

Labor shortages are not only confined to the US. Across the pond Europe is also suffering, with figures suggesting it is only set to get worse by 2030 as Europe is expected to lose 13.5 million workers. Similarly, China’s Ministry of Education forecasts a shortage of nearly 30 million manufacturing workers by 2025, larger than Australia’s entire population. Alongside this, the number of people aged 65 years or older worldwide is projected to more than double, rising to 1.6 billion in 2050.

While larger companies typically have more capacity to withstand change, they are not immune to the impact of worker shortages or an aging workforce – it will affect businesses of all sizes, so companies need to work harder this year to attract and retain workers.

As businesses grapple with these challenges, a rewiring of the global supply chain is emerging as a critical consideration. We’re increasingly seeing global industrial players actively seeking to diversify their manufacturing footprint beyond China, as we saw with Apple shifting the production of its iPhone to India.

This strategic shift is driving reshoring and nearshoring initiatives in North America, with Mexico emerging as the primary beneficiary. Simultaneously, investments are pouring into alternate Asian manufacturing hubs, with India and Vietnam emerging as key targets.

2.)   Global financial challenges will continue

In the cash-strapped environment of 2023, business leaders had a lot less free cash compared to previous years – this was primarily driven by high interest rates. On top of this, many businesses were stuck with a large inventory which was created in the middle of the Covid-19 pandemic.

While these challenges are unavoidable, there are things that remain under the control of business leaders – one of the most important of which is supporting the workforce. Here I see automation as the answer. Our own analysis suggests that there are over 20 million jobs worldwide with automatable tasks. This does not mean automation will take away jobs. Instead, it will offer the opportunity to retain and upskill existing employees by creating more fulfilling jobs, reducing the so called dull, dirty and dangerous tasks like drilling holes or handling hazardous waste. As a new publication by Universal Robots shows, in the current environment, automation is just one of several tools manufacturers will need to use to retain their precious workforce in the coming year.

This strategic reallocation of human resources that is made possible by automation will contribute significantly to increased productivity and efficiency, as skilled workers can now channel their efforts into tasks that demand creativity, critical thinking, and problem-solving. This will undoubtedly convert to economic gains for businesses as well as the creation of new job roles.

Automation solutions also provide manufacturers with a quick return on investment (ROI) solution in the midst of a cash and labor constrained environment. The new generation of collaborative robots (cobots) and Autonomous Mobile Robots (AMRs), which demonstrate a rapid ROI, could be an attractive solution to drive growth.

3.)    The era of sustainable business operations

Among our customers, what we’re seeing is that they want to grow but in a lower carbon footprint way. For decades, the standard business practice has been to manufacture goods in less-developed countries due to the low cost. This offshoring of production has helped make goods more affordable and accessible, but it also carries a far greater environmental impact due to higher-carbon intensity factory processes and long-distance transport.

Now, we’re increasingly seeing governments implement laws and regulations, such as the Inflation Reduction Act (IRA) in the US, to provide incentives to businesses for reducing carbon emissions. For example, the IRA offers hundreds of billions for clean energy and decarbonization measures through grants, loans, tax credits, and other incentives.

Sustainability is becoming more than just a moral obligation and compliance issue. Businesses are beginning to think about the financial gains that could be made by lowering the carbon footprint of their operations. AI, with its capacity for data-driven insights and predictive analytics, becomes a linchpin in navigating the complexities of sustainable transformation.

4.)    Business leaders will need to attract the new generation of digital natives

This year, demographic shifts will see younger workers dominate the workforce. For the first time, the number of Gen Zs working full-time will likely overtake the number of baby boomers holding full-time positions this year.

What’s concerning is that research shows Gen Zs and Millennials often hold misconceptions which put them off manufacturing as a career. Business will need to adapt and scale up operations to align with the expectations of this more digitally native workforce by transforming manufacturing jobs into technology jobs.

After all, Advanced Manufacturing is a STEM based role so businesses need to position it this way for the next generation of workers.

The road forward

As we look ahead to 2024, business leaders find themselves at a critical juncture, facing economic downturns, labor shortages, and supply chain disruptions. The path forward demands strategic foresight, resilience, and a commitment to embracing transformative trends that redefine the global industrial landscape.

What are your predictions for 2024?