Like all business leaders, Charles Bouri has learned valuable lessons from the collapse of the manufacturing industry in the United States and other developed nations. Unlike other observers, however, Charles isn’t ready to hold manufacturing’s funeral just yet. Here are three reasons Charles Bouri doesn’t think that the manufacturing sector is dead:
1. People still need stuff – With the demise of so many blue collar jobs, and a dip in consumption following the worldwide recession, it’s easy to imagine that manufacturing will never snap back. But the reality is that people still need stuff—and lots of it—no matter what the economy is doing. Even when consumerism is at an all-time low, people still need cars, electronics, household goods, building materials, and dozens of other basics that are produced in factories around the world. Technology experts may be excited about an increasingly digital economy, but it all still requires physical parts to run. There is no end of manufacturing in sight.
2. Demand is increasing in the developing world – We tend to think of the developing world as the place stuff comes from, not the place stuff goes to. But that’s an increasingly false dichotomy. Standards of living continue to rise in nations like China, India, Indonesia and other developing nations, and nations across Africa and Asia are growing upper and middle classes. This means that these nations are increasingly becoming consumer-driven in their own right, and that over the long run of the next three decades demand for manufactured goods could actually go up. Additionally, as costs rise in these countries, it will be less advantageous to take blue collar jobs overseas and we may see a resurgence at home.
3. The need for specialized manufacturing is up – Not all types of manufacturing have been impacted equally. Fabrication, tech assembly, and other specialized niches continue to require a creative mindset, good engineering, and high standards, and companies that can check those boxes will only see their client base grow.
Of course, there is no doubt that the economy has shifted and that, at least in developed nations, assembly and manufacturing jobs are at an all-time low while more companies either focus on the creative economy or rely on cheaper labor elsewhere. But it’s important to put this change in perspective and realize that our basic need to have things put together properly, at large scale, has not changed—and that means there is still business opportunity.