Most analyses equate manufacturing with job growth and outsourcing with job loss. A recent
analysis by McKinsey & Co., however, finds that only 20 percent of the manufacturing jobs lost in the United States since 2000 can be tied to outsourcing. The rest, the consultant says, are due to productivity gains:
We find that manufacturing job losses in advanced economies have been concentrated in labor-intensive and highly tradable industries such as apparel and electronics assembly. However, overall in the United States, trade and outsourcing explain only about 20 percent of the 5.8 million manufacturing jobs lost during the 2000-10 period; more than two-thirds of job losses can be attributed to continued productivity growth, which has been outpacing growth for the past decade.
Even nations with a strong export balance have shed jobs, the report says. Both Germany and South Korea saw manufacturing employment decline during the study period. Productivity will continue to rise and overall employment in developed economies will remain under pressure if current trends persist. Manufacturing employment in advanced economies could fall from 45 million jobs today to less than 40 million by 2030, McKinsey says.
McKinsey also notes a developing scarcity of talent in the manufacturing sector. There's a gap in the technical talent needed to run manufacturing tools and systems, the report says, and the use of greater intelligence in product design and manufacturing to boost resource efficiency and track activity in supply chains.
An executive summary and the full report can be downloaded here.