In response to the COVID-19 pandemic, geopolitical disputes, raw materials shortages and trade issues that have rocked global economies and supply chains, a majority of U.S.-based companies are planning to relocate production closer to home, according to the results of a recent survey from ABB.
Surveying 1,610 executives in the U.S. and Europe, ABB found that 70% of U.S. businesses are planning changes in their operations, with 37% planning to bring production back home, and 33% looking to nearshore and shift their operations to a closer location.
“Business leaders are responding to unprecedented supply chain disruptions by putting into place measures to make operations more resilient and adaptable,” said Sami Atiya president of ABB’s Robotics & Discrete Automation Business, at SelectUSA. “While investment in automation plays a key role in flexibility in operations, equally important is investment in education, vocational training and apprenticeship programs needed to create safer, higher-paying jobs for American workers.”
Atiya said the increasing need for flexibility and resilience in production is driving the interest in reshoring/nearshoring and, as a result, the demand for more automation. He underscored the role of robotics in facilitating reshoring or nearshoring efforts, addressing supply chain concerns and maintaining global competitiveness for U.S. businesses.
Once confined to the automotive industry, automation and robotics have expanded across multiple industries and sectors across the U.S., including logistics, food and beverage, retail, and healthcare. American companies are increasingly turning to automation and robotics driven by the need for greater flexibility in operations, widespread labor shortages and an aging workforce.
According to the International Federation of Robotics, the increase in robot density per 10,000 workers in North America, jumped 28% in Q1 2022 compared to first quarter of 2021, the highest rate of growth since records have been kept. While in one sector alone, the American Welding Society says the U.S. will face a shortage of 400,00 welders by 2024.
ABB’s study also found that American companies are relying more on automation to solve their supply chain woes. In the survey, 43% of businesses indicated that they are expanding robotics and automation to address supply chain concerns and customer demands, with 73% of U.S.-based businesses noting that robotics and automation will play a significant role in addressing supply chain issues.
Although there is a greater demand for robotics in the U.S., ABB’s survey found that the rate of investment in automation remains higher in Europe, with 74% of European businesses indicating they will invest in robotics and automation in the next three years, compared to 62% in the U.S.
The role of automation and robotics in reshoring or nearshoring operations in the U.S. also depends on bridging the skills gap in robotics education and better educating and upskilling workers.
“Robotics and automation are job creators, requiring new ways of working with new skillsets,” Atiya said. “We are working with the U.S. government to share ABB’s experience in the U.S. and other countries where we operate on how we can accelerate robotics and automation education, vocational training, and apprenticeship programs needed to create safer, and higher-paying jobs for American workers.”
