The Technology Genie Won't Go Back in the Bottle - Here's What to Do
In our blog post earlier this month we shared 4 new developments effecting manufacturing but the productivity one really got us thinking so in this post we're expanding on that topic based on a new Harvard Business School report on US competitiveness that focuses on solutions to make the US more competitive. The report explains that the manifestation of competitiveness is productivity. "A nation can only compete successfully and pay rising wages through high value of output per worker and per dollar of capital invested. If businesses are going to compete in domestic and international markets while improving wages and living standards of the average citizen they need to be more productive". Unfortunately, Harvard Professor Michael Porter writes, “There is almost a complete disconnect between the national discourse and the reality of what is causing our problems and what to do about them. This misunderstanding of facts and reality is dangerous, and the resulting divisions make an already challenging agenda for America even more daunting.”
The report explains that the 2009 'Great Recession' isn't the cause of our slow recovery despite many pundits and politicians diagnosing that. “The ‘recovery’ remains slow and uneven, largely because America’s competitiveness problems took root long before the downturn.” Misguided diagnosis, along with political paralysis in Washington, has meant that we have made no meaningful progress on any of the critical policy measures needed to address the nation’s underlying competitive weaknesses. Porter says the key issue for America today is a lack of “shared prosperity",” as working and middle-class citizens are struggling. “The lack of shared prosperity has rightly been a central issue in the 2016 campaign, but the diagnoses and proposed solutions are way off the mark.”
Please read the report for yourself, it has many recommendations for fixing the problems. For example, "tax reform is the single area with the greatest potential for immediate impact on the economy and is long overdue given changes in the global economy. Corporate tax policy has become a key obstacle to U.S. competitiveness and economic growth, and reforming both corporate and personal taxation is essential to achieving a sustainable federal budget."
Here's our take with respect to the industrial segment of the US manufacturing market:
- Many of our politicians have diagnosed the wrong explanation/s (e.g. free trade) for why many Americans are anxious and angry today. Just as the Industrial Revolution stoked anxiety and anger 250 years ago as people feared machines would replace jobs. So, the continuing Digital Revolution of today, is automating many job with robots (that already operate many assembly lines) and Artificial Intelligence (AI) - McKinsey estimates that 45% of all activities people perform in the workplace can already be done by software or machines! These technologies will gradually spread across the world affecting all countries - so blocking free trade won't solve it.
- We need to accept that robots and AI won't replace all jobs but will affect many. We need to adapt and keep increasing productivity by using these new technologies. Just as Online Sales and Marketing has dramatically changed those roles for industrial suppliers so companies like CDS are helping suppliers adapt and increase their sales and marketing productivity.
- Manufacturing, like other key segments of the US economy is in the midst of a digital transformation. Most businesses will be disrupted but we can't put the technology genie back in the bottle! We must find ways to drive our productivity up using the benefits of technology while mitigating the disadvantages, for example, by training new skills into the current and future workforce.
We are taking our advice by keeping up with technology and applying it to increase the productivity of industrial sales and marketing. As always, please let us know what you think by commenting below, calling or using the buttons below.