Sink, Save, Stall or Speed: A Tale of Reinvention
Trying to capture the lessons of the past to envision the future is as challenging as it is necessary. Each generation of manufacturers, faced with new challenges, feels its time is unprecedented—and struggles to adapt and shape its futures.
Having started my career at IndustryWeek in time to oversee the publication of its 25th anniversary, in 1995, I’ve witnessed and researched manufacturing’s continual reinvention. During my tenure, the twin forces of globalization and technology drove what’s variously dubbed “creative destruction” or “creative innovation” in manufacturing businesses.
The Japanese bubble economy had burst earlier that decade, ending a two-decade rise that had most believing that the country would overtake U.S. manufacturing leadership. However, Japanese companies, specifically Toyota Motor Corp., had planted the seeds of what became known as the lean revolution. Initially understood as a dramatically different approach to production, lean grew to be a fundamentally new approach to leadership that most manufacturers still fail to understand fully.
At the turn of the century, a new technology problem, Y2K, loomed, threatening to disrupt business systems. Instead, advances in IT and the creation of the internet transformed the economy—and manufacturing’s place in it. As manufacturers raced to make sense of—and capitalize on—the new technologies, a new phase of globalization began.
In 2001, China joined the World Trade Organization, making an immediate impact. With cheap offshore labor and the technology that helped companies “transcend borders,” offshoring became the organizing principle of the day. Public policy leaders once again began to question the importance of manufacturing to a nation’s economy.
It’s crucial to recall that IW’s origin dates to 1882, as Iron Review, which soon became the Iron Trade Review, then Steel in 1940, and, finally, IndustryWeek in 1970, adapting its mission as changes in industry demanded. In a report reflecting on IW’s 35th anniversary, which glanced back at this history, I noted that “the undulating cycle of history turns up perennial problems that each new generation declares will variously sink, save, stall or speed the sector’s growth.” Concerns about the availability and cost of health care, energy and skilled labor; the influence of taxes, regulation, and treaties; and the relative strength of U.S. manufacturing rise and fall with startling consistency through the years.
As these dominant trends advanced, manufacturers, forced to adapt, invented new leadership, operations, workforce and supply chain strategies. Manufacturers embraced the new realities, adapting accordingly to remain competitive.
While this ability to adapt keeps U.S. manufacturing competitive, it has come at a cost. As new countries develop their manufacturing sectors, often using mercantilist strategies that skirt trade rules, their impact chips away at U.S. manufacturing dominance. With new technologies and increased automation, manufacturing’s once-vaunted place in the U.S. economy as the bulwark of middle-class jobs diminishes.
Fast-forward to the just-ended decade, when a myriad of digital technologies came to maturity, heralding a new age of manufacturing, the 4th Industrial Revolution, and when a new nationalistic trade policy aims to turn the tide of ever-increasing globalization. Manufacturing is once again at an inflection point.
Whether public policy leaders will view manufacturing as critical to their nation’s economic future, or as a relic of the past, remains to be seen. However, a glance through history shows that manufacturers throughout the world will embrace the new technologies and adapt to new economic realities, and continue their vital contribution to growing the world economy.
Patricia Panchak joined IndustryWeek in 1995 and served as editor-in-chief from 2000 to mid-2006 and late 2012 to early 2017. She is an independent business journalist, media strategist and public speaker.
