Innovation and Technology

It’s time to think way outside the proverbial box, according to the Manufacturing Leadership Council, the NAM’s digital transformation arm. In fact, as we get closer to 2030, manufacturers are creating entirely new boxes—including new digital business models, products and services, revenue streams, ways to serve customers and opportunities to increase competitiveness.

Collaborative innovation: By 2030, metaverse technologies will provide rich virtual environments for the collaborative development of new ideas. These shared virtual spaces will enable contributors from multiple remote locations to collaborate in real time.

• These collaborations may include manufacturers, partners, academic institutions and research institutes.
• New concepts can be tested in a virtual world before moving to physical prototyping or production.

Outcome-based products and services: As digital platforms mature and products become increasingly smart and connected, the decade ahead may see a boom in more outcome-based services. This is where the customer doesn’t buy a physical product, but instead signs up to pay for the guaranteed outcomes that product or system delivers.

• This shift will require manufacturers to establish new infrastructure rich in predictive analytics, remote communications and consumption monitoring.
• It also requires a mindset change for traditional manufacturing, from a focus on units and costs to product lifecycles, performance levels and usage.

Blockchain networks: By 2030, blockchain could be leveraged for most world trade, helping to provide the secure traceability and provenance needed to prevent physical product counterfeiting, grey markets in medicines and even the adulteration of the global food supply chain.

• A blockchain is an electronically distributed ledger accessible to multiple users. Blockchains record, process and verify every transaction, making them safe, trusted, permanent and transparent.

• Blockchain technologies promise to be a viable solution to manufacturers’ need to automate, secure and accelerate the processing of key transactions across industrial ecosystems.

E-manufacturing marketplaces: Digitally empowered production-line adaptability, such as the kind that emerged during the pandemic, will provide a foundation for companies to offer spare production capacity to other companies in different sectors.

• This maximizes the return on a company’s production-line investments and can generate new revenue streams for the future.
• Combined with e-commerce, e-manufacturing will enable designers, engineers and/or smaller companies to more easily connect with a large pool of qualified producers to deliver and scale a final product.

Manufacturing in 2030 Project: New Boxes is just one of the industry trends and themes identified by the Manufacturing in 2030 Project, a future-focused initiative of the MLC. For more details on megatrends, industry trends and key themes for Manufacturing in 2030, download the MLC’s new white paper “The Next Phase of Digital Evolution.”

Now that 2023 is here, we’re looking back on 2022’s top tech trends in manufacturing. The NAM’s digital transformation arm, the Manufacturing Leadership Council, and its innovation management division, the Innovation Research Interchange, gave us an overview.

AI everywhere: From automatically responding to shifts in production demand to anticipating breakdowns in the supply chain, artificial intelligence showed up more than ever before throughout manufacturing operations.

• More than two-thirds of manufacturers are either using AI now or will be doing so within two years, according to MLC research.
• Current use cases include predicting needed maintenance for equipment, forecasting product demand and monitoring performance metrics such as productivity and efficiency. Future use cases could include fully autonomous factories that run continuously with minimal human intervention.

Training on demand: Training for technicians and frontline operators used to mean time in a classroom with a live instructor. In 2022, more manufacturers turned to virtual, on-demand learning tools that allowed workers the freedom to learn at their own pace.

• This ran the gamut from video content libraries to immersive augmented reality/virtual reality experiences that guide and correct trainees.
• In 2023 and beyond, this type of learning experience will be essential to attracting and retaining younger workers who are familiar with digital learning and want the latitude to gain new skills on their own schedules.

Digital twins: Manufacturers used digital twins—virtual models designed to reflect a physical object, system or process accurately—to create design prototypes and test their performance.

• Digital twins will continue to allow for new levels of design optimization, improved product development and performance and significant waste reduction for manufacturers.

Robotic collaboration: Once confined to steel cages and bolted to floors, industrial robots took center stage in 2022.

• No longer limited to repetitive tasks and kept far from human workers, new-generation robots are safe enough to work alongside employees, can be moved quickly around shop floors and are programmed easily to do multiple tasks.
• Since they’ve also become more affordable, they’re an economically feasible investment for companies of all sizes.

Cybersecurity as safety: A rise in connected factories also meant a rise in cyberattacks on manufacturers. In an industrial setting, a cyberattack can be very dangerous, as it can cause equipment to malfunction.

• Last year, more companies began addressing the threat with cyber drills, tabletop exercises for simulated attacks and other training exercises designed to keep businesses—and workers—safe and secure.

Low-code/no-code development platforms: In 2022, more manufacturers embraced the use of mobile and web apps to build applications quickly. Using these platforms, enterprise and citizen developers can drag and drop application components and connect them to create apps—without line-by-line code writing.

• Business teams with no software development experience built and tested applications without any knowledge of programming languages, machine code or the development work behind a platform’s configurable components. We can expect to see more of it this year.

Smart glasses move beyond the pandemic: Many manufacturers kept up their pandemic-era use of smart glasses, which they had used to troubleshoot issues on the ground when travel was restricted and engineers and technicians couldn’t reach sites.

• They also expanded smart glasses’ use to include scanning sensor data so users can see visual data “mapped” onto equipment to better identify issues and fixes.

Interested in learning more? Check out the MLC and IRI for more insights into manufacturing’s exciting, high-tech future.

Manufacturers are pursuing sustainability like never before.

That’s according to recent polling conducted by the Manufacturing Leadership Council, the NAM’s digital transformation division. The annual Sustainability and the Circular Economy research survey seeks to determine the progress made in sustainable manufacturing.

Competitiveness: There has been a surge in the number of manufacturing executives who view sustainability as critical to the future of their businesses.

• 58% of respondents in 2022 believe sustainability is essential to future competitiveness compared to 38% in 2021.
• 68% of executives say they are implementing extensive, corporate-wide sustainability strategies. That’s up from just 39% in 2019.

What’s driving change: The motivations go beyond regulatory compliance and cost savings.

• 78% say sustainability is about better alignment with corporate values.
• 68% believe in creating a cleaner, healthier environment.
• 66% seek to improve company reputation with customers and investors.

Top corporate goals: More than half of survey respondents reported having specific sustainability goals and metrics across almost all key functions in the company.

• Goals were most apparent in manufacturing and production (79%), supply chain (69%) and product design and development (67%).
• Additional goals were cited in transportation and logistics (56%) and partner compliance (51%).

Energy efficiency is No. 1: The primary sustainability focus of manufacturers, according to survey results, is energy efficiency and reduction, combined with the transition to renewable energy sources. These efforts are linked intrinsically to meeting net-zero emissions goals.

• 45% of respondents report having announced formal net-zero goals.
• 30% aim to hit net zero by 2030.

Digital tech, employee training play a role: Also on the rise is the number of companies that recognize the importance of digital solutions in their sustainability efforts.

• These tools are being used to manage and monitor materials and energy consumption, optimize operations to improve efficiency and report sustainability progress.
• Respondents also say meeting sustainability targets must include engaging employees through education and training, as well as greening their supply chain.

The last word: An overwhelming 90% of all respondents agree that manufacturing has a special responsibility to society to become more sustainable and accelerate the transition to a future circular industrial economy.

Interested in putting some renewable energy solutions into action, including solar power, battery storage and LED lighting? Programs from utility companies and other entities enable efficiency upgrades with little or no upfront capital. Connect with NAM Energy to explore your options!

Washington, D.C. – Following today’s announcement by the World Trade Organization’s General Council that member states have agreed to delay a final decision on an expanded intellectual property waiver for COVID-19 products, National Association of Manufacturers President and CEO Jay Timmons released the following statement:

“The WTO’s decision to delay the expanded intellectual property waiver is a welcome step toward protecting American innovation and technology leadership. This is vital not only for future pandemic responses, but also for the sector’s ability to produce new and advanced treatments or fund critical research and development.

“Manufacturers in the U.S. are leading our post-pandemic recovery and investing heavily in the development of cures and therapeutics. An expanded WTO waiver would force manufacturers in America to give away rights unfairly to international competitors and economic rivals like China, disincentivize companies from continuing the cutting-edge research underway, put jobs at risk and harm the sector’s global competitiveness.

“Manufacturers will continue to work with partners around the world to tackle current and emerging health challenges, while protecting the IP rights of those many companies which have been so essential to an effective pandemic response.”

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 12.9 million men and women, contributes $2.77 trillion to the U.S. economy annually and accounts for 55% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org

Creators are always wanted in manufacturing, and those who bring new perspectives due to their neurological differences can be some of the most valuable.

That was one key takeaway from the Diversity + Inclusion Summit held this month by the Manufacturing Institute (the NAM’s workforce development and education partner). Dr. Keivan Stassun, director of the Frist Center for Autism and Innovation at Vanderbilt University, discussed the benefits of hiring neurodiverse workers, sharing tips on optimizing the hiring process for these workers as well as setting them up for success. Here’s some of his advice.

Why it matters: As manufacturers look for more workers to fill their hundreds of thousands of open positions, they are considering people of many different backgrounds and talents.

• Neurodiverse workers, who may include those with autism, Down syndrome, ADHD or other neurological conditions, have a wide range of abilities and perspectives and can enrich manufacturers’ operations.
• Stassun spoke from personal experience: at the Frist Center research lab, autistic individuals working with the proper support created a data visualization software that has been licensed by NASA, and also patented a technology for mining asteroids.

The benefits: “There are two broad categories of strengths that neurodiverse talent brings to the table—visual cognitive abilities and process/efficiency improvement,” said Stassun.

• Visual cognitive abilities can include skills such as pattern recognition and outlier detection, which can be useful in quality assurance tasks as varied as inspecting batteries coming off an assembly line, surveilling financial records for fraudulent or improper activity or stocking crash carts in emergency rooms.
• Process/efficiency improvement abilities emerge from neurodiverse workers’ atypical or novel perspectives, which help them identify out-of-the-box solutions. As Stassun explained, “Neurodiverse individuals can look at a process and abstract it into a flow chart to find ways to increase efficiencies that no one else would have even thought of.”

How to get started: Stassun recommends that companies try a small pilot program before rolling out a company-wide hiring initiative. He had a few key tips for the recruitment process:

• During the job interview stage, recruiters should be aware of ways in which neurodiversity can differ from neurotypical behavior. For example, interviewees may make minimal eye contact and use extremely direct verbal communication.
• To set neurodiverse workers up for success, companies should examine the sensory environment of their workplaces. Though workers’ needs will vary, they may be sensitive to light, temperature or noise and need certain accommodations, which should be arranged from the outset of employment.

Resources: Stassun offered two resources that will help companies find and retain neurodiverse talent:

• Mentra, a neurodiversity employment network that recruiters can search, and which allows neurodiverse individuals to share their backgrounds and strengths with employers.
• The Autism @ Work Playbook, which details how to create a supportive work environment for autistic individuals.

In addition, the MI provided other useful information in its recent D&I Roundtable on recruiting and retaining employees with neuro differences, which you can view here.

The last word: As Stassun noted, “Innovation often comes from the edges. From a human capital perspective, it’s a really exciting opportunity.”

What does the U.S. military do when an expensive asset like a plane or a weapons system begins to break down?

Often, it turns to companies like Parts Life, Inc.—an innovative manufacturer that can reverse-engineer obsolete parts and help find solutions for hard-to-replicate products. But after a tax law change went into effect in 2022, the New Jersey–based manufacturer is facing increased costs for research and development, creating a barrier to the kind of innovation that is the focus of its business.

The change: Until the beginning of 2022, businesses could deduct 100% of their R&D expenses in the same year they incurred the expenses. Starting this year, however, a tax law change requires businesses to spread their deductions out over a period of five years, making it more expensive to invest in growth and innovation.

A focus on innovation: For Parts Life, coming up with new ideas is an essential, daily activity.

• “Parts Life is built around being a solutions provider,” said Parts Life President and CEO Sam Thevanayagam. “We are providing solutions for very expensive and mission-critical assets that are extremely strategic for the defense of the nation, but are also older—so their parts are not necessarily being supported.”
• “That’s where we come in to do reverse engineering. So, we’re looking at an old problem, but using innovation to solve it going forward.”

A benefit for savings: By helping the military extend the life of its assets, Parts Life also helps taxpayers.

• “We’re taking care of the warfighter and the taxpayer,” as Thevanayagam puts it.

A look ahead: As global conflicts shift, the U.S. military needs suppliers like Parts Life to help it develop solutions for future challenges, too.

• “Right now, our military is coming out of conflicts in Afghanistan and Iraq, but future conflicts may involve different terrain with different problem sets,” said Thevanayagam.
• “The work that we are doing today is helping them figure out how to approach those challenges. We’re having them tell us where they need to be, and then we’re helping them with the innovation they need to be successful.”

A tough choice: With the change in tax law, companies like Parts Life will be forced to make difficult decisions about how to spend scarcer resources, harming their ability to do critical, forward-looking work.

• “Currently, we’re leaning forward in resources and talent to lead the future,” said Thevanayagam. “If the government is going to pull the rug out from under us, we’re not going to be able to be aggressive. We’ll have to focus on maintaining our business rather than investing in new innovation.”

Our take: The NAM has pushed forcefully for the tax change to be reversed—and in October, told policymakers that the R&D amortization provision poses a “serious threat to our national security,” in part because of its impact on manufacturers like Parts Life that supply and support the U.S. military.

The bottom line: “The only way for us to continue to be relevant is to make sure that we’re investing in innovation and seeing what we can do to be a part of designing the future,” said Thevanayagam.

Visit the NAM’s R&D Action Center for critical R&D policy updates, industry stories and an opportunity to engage directly with your members of Congress. 

When asked why she chose to “give away” a quarter of her precision-machining company to employees, Acutec Precision Aerospace President and CEO Elisabeth Smith has a simple, commonsense answer: “Having an appetite for growth is a lot easier if you’re the beneficiary of it.”

Skin in the game: In August, Acutec, the largest industrial employer in its northwestern Pennsylvania county, went from privately held to worker-owned through an employee stock ownership plan. The shares, which have a value of $5.5 million, will be given out to current and future employees over the next decade—at no cost to them.

• Said the 40-year-old Smith: “I have a long career ahead of me, but I want the employees to be on that journey with me. … Why not give a stake to the person who’s working their butt off?”

Bringing in applicants: The woman-owned business, founded in 1988 by Smith’s father, Rob Smith, has always had an “empowered, participatory” workforce, but in recent years, it struggled with attracting and retaining the right people, Smith said. Since the ESOP, that’s turned around.

• “It’s made a difference in attracting talent,” she said.
• With more than 400 employees spread across its three Pennsylvania facilities and one South Carolina operation, Acutec is in growth mode and still looking to fill open positions.

The retirement incentive: The firm’s new ownership structure will help provide for employees in their golden years.

• Under the ESOP, when an employee leaves or retires, the company buys them out, and they can place that money into a retirement account.
• “There have been other ESOPs in the community, and some people have seen employees [of other companies] retire with quite a lot of money, so they have an idea of what it looks like,” Smith said.

The productivity effect: Now that employees are part owners of Acutec, Smith sees more interest in cost-consciousness and ROI.

• “We’re hearing things like, ‘Can we save on tooling?’” Smith said. “There are some costs the employees control themselves. The idea now is that they are custodians in charge of some of those profit drivers. They want to look at return on investment.”

The last word: Perhaps the best development to come from the restructuring is the change in team morale.

• “Before, people were kind of burned out, coming out of the pandemic,” Smith said. “How do you inspire people to do more? This is how.”

With a skills gap and misperceptions about modern manufacturing threatening to leave millions of manufacturing jobs unfilled by 2030, Creators Wanted, a campaign by the NAM and the Manufacturing Institute, stepped in. Now, it is seeing eye-popping results as it works to inspire 600,000 new manufacturers by 2025.

Connecting with communities: From July through November of this year, Creators Wanted continued to take its tour to communities across the country, offering potential manufacturers, career influencers and community leaders an exciting opportunity to learn about modern industry. Stops included Midland, Michigan; Nashville/White House, Tennessee; West Columbia, South Carolina; Decatur, Illinois; and Chicago, Illinois.

Promoting knowledge: These latest stops have bolstered the tour’s overall reach. As of this month, the tour has brought 7,900 students through its immersive experience and motivated 840,000 students and potential career mentors—including parents and educators—to sign up online to learn more about manufacturing careers.

• “Our propriety algorithm for directing our campaign’s content to potential future manufacturers continues to get even more effective as we engage more people,” said NAM Managing Vice President of Brand Strategy Chrys Kefalas.
• “We’ve added more than 500,000 people to our email network since only September, giving the industry a powerful tool to reengage important audiences in building the future workforce.”

Changing minds: Creators Wanted is focused on exposing students, parents and teachers to the reality of modern manufacturing to challenge outdated notions and encourage young people to see manufacturing as a potential career.

• Approximately 75%of people who have participated in the tour reported that they left the experience with a significantly improved view of modern manufacturing careers.

Getting the word out: In addition, Creators Wanted has generated approximately $5 million in positive earned media about the campaign and modern manufacturing careers—ensuring that people across the country gained greater awareness of the campaign’s resources and significant need for talent in manufacturing.

Building on progress: These results build on the sustained workforce solutions of the MI, the workforce development and education partner of the NAM, which runs programs geared toward women, veterans and underrepresented communities.

• The MI and Deloitte report that positive perception of manufacturing careers among parents has soared from 27% when the tour started to 40% today—closing in on the goal of 50% by 2025.

The road ahead: The campaign will soon deploy additional resources for job seekers and students at CreatorsWanted.org, in partnership with FactoryFix, the official recruiting partner of the campaign. Find out more about the Creators Wanted campaign here.

The manufacturing leaders who met in Washington, D.C., this month agreed wholeheartedly: D&I is integral to building and retaining the workforce of tomorrow.

At the third-annual Diversity+Inclusion Summit convened by the Manufacturing Institute, leaders gathered to share data, insights and lessons gleaned from their own D&I efforts. Hailing from many different industry sectors and companies of all sizes, the panelists and attendees laid out concrete actions that can transform companies’ D&I objectives.

Why it matters: With 2.1 million jobs expected to go unfilled in the industry by 2030, manufacturers need to find new populations of potential employees. Recruiting more women, racial and ethnic minorities and neurodiverse workers can expand companies’ talent pools and strengthen their workforces.

• In fact, increasing the current female workforce from 29% to 35% would fill the industry’s 746,000 open jobs all on its own, according to a recent study by the MI and Colonial Life.
• That’s why the MI is working to meet this target through its 35 x 30 Campaign—i.e., increasing the percentage of women in manufacturing to 35% by 2030.

How to do it: The summit offered important tips to help companies boost their D&I efforts, including:

• Get buy-in from company leaders: Research shows that D&I efforts lead to greater productivity, increased innovation and higher revenue—not to mention the recruitment and retention benefits. Once companies set D&I goals, leaders should incorporate D&I objectives into their annual goals to create opportunities for accountability.

• Use employee resource groups in a structured way: Companies should set up organizational structures for their ERGs that will ensure longevity and encourage fresh thinking, as well as align with companies’ overall D&I goals. These groups should have their own budgets and rotating leadership positions. When possible, the contributions of ERG leaders should be included in their incentive programs or annual goals.

• Educate your first-line supervisors about D&I: By training first-line supervisors on the latest in D&I and company-specific objectives, companies can help them both support their teams better and collect feedback to inform the overall effort.

• Offer child care and flexibility: In the post-pandemic environment, companies are still exploring what works best for them, but one thing is clear: to recruit and retain talent in a tight labor market, companies need to provide employees with options. (Check out our recent webinar on the same subject.)

Learn more: Interested in joining the conversation? Check out the MI’s D&I tools and resources, and register for upcoming events, including our upcoming Virtual Diversity+Inclusion Summit on Dec. 16, here. The virtual summit will include some recorded sessions from this event as well.

This story can also be found within the NAM’s R&D action center.

Corning Incorporated has been turning out innovations for well over a century and a half—since 1851, to be exact. But a recent change in tax policy that makes R&D more expensive could have a significant impact on the company’s ability to build on its impressive history.

• “We have a wonderful track record for innovation,” said Tymon Daniels, vice president of tax at Corning, a material sciences manufacturing company with a focus on glass.
• “In 1897, when Thomas Edison was working on electric lights, he came to us to make the glass bulbs. 110 years later, when Steve Jobs was working on the iPhone, he came to us to make the glass used for the screen. More recently, we figured out a way to make special glass vials that sped up production of the COVID vaccine. … We’ve been able to do this because of R&D.”

The issue: Until the beginning of 2022, businesses could deduct 100% of their R&D expenses in the same year they incurred the expenses. Starting this year, however, a tax law change requires businesses to amortize or spread their R&D expenses out over a period of five years, making it more expensive to invest in growth and innovation.

The impact: According to Daniels, the abrupt change in a policy that has existed for decades poses a serious challenge for the company. 

• “The R&D deduction has been in existence for over 70 years—a very good tax policy. Requiring the amortization of R&D expenses is a dramatic shift to a very bad tax policy,” said Daniels. “It causes a significant spike in cash taxes.”

The trade-offs: At a time when company leaders are trying to make decisions about how to invest finite resources, a significant increase in the tax burden can hinder future growth plans, Daniels emphasized.

• “Our C-suite is trying to make decisions about big issues like capital expenditures and jobs,” said Daniels. “This makes those decisions harder and comes at a time when the economic outlook is highly uncertain.”

The action: Corning is asking Congress to find a solution, and quickly.

• “We need lawmakers to extend the full deductibility of R&D expenses,” said Daniels. “If Congress can’t make a permanent fix, then at least making full deductibility retroactive to 2022 and extending it through 2025 would still be good. Otherwise, the impact to Corning may be extra cash taxes of roughly $150 million in 2022 alone.”

The last word: “Requiring the amortization of R&D is all I’m thinking about right now,” said Daniels.