13.06.2024
Turning challenges into opportunities as falling birthrates reshape manufacturing
Falling birthrates are becoming a significant concern for many countries around the world. Nations such as Japan, South Korea, Italy, Greece, and Spain are already experiencing the effects of this demographic shift. In South Korea alone it was recently reported that over 150 elementary schools had no 1st graders enrol in March with a record-low number of new students expected for the upcoming school year. With this trend set to continue the implications for the manufacturing sector are profound. Whilst this is not an immediate problem, as the workforce shrinks, the manufacturing industry must adapt to maintain productivity and economic growth. Here we explore the consequences of declining birthrates on manufacturing, potential solutions, and the role of technology in shaping the future.
Understanding the Demographic Shift
Falling birthrates are resulting in an ageing population and a far smaller number of young people entering the workforce. According to the United Nations, many developed countries are seeing birthrates well below the recognised replacement level of 2.1 children per woman. This emerging demographic trend leads to a smaller working-age population, which severely impacts industries that rely on a steady supply of labour but particularly manufacturing.
Several factors are contributing to this decline in birthrates, including the global cost of living crisis and changing attitudes towards having children. In countries like South Korea, the expense of raising children is prohibitively high, leading many couples to forgo having larger families or any children at all. This trend is compounded by economic uncertainty, high housing costs, and the increasing financial burden of education and childcare.
In the UK, the birthrate has also been declining steadily over the past few decades. According to the Office for National Statistics (ONS), the total fertility rate fell to 1.58 children per woman in 2021, well below the replacement level. The UK is experiencing similar challenges, with high living costs, particularly housing, and changing societal attitudes contributing to fewer births. This trend poses significant implications for the UK’s manufacturing sector, which must find ways to adapt to a shrinking and ageing workforce while maintaining competitiveness and growth.
Exploring the Opportunities
Despite the challenges presented by a declining workforce, there are numerous opportunities for innovation and transformation within the manufacturing sector. Embracing these opportunities can help mitigate the negative impacts and create a more resilient and adaptable future.
Revitalising Rural Areas
The demographic shift provides an opportunity to revitalise rural areas through remote work and decentralised manufacturing:
Remote Work Technologies: Advances in remote work technologies enable manufacturing support roles, such as design and logistics, to be performed from anywhere, potentially revitalising rural areas that have been depopulated.
Localised Production: Decentralised, localised production units can be established in rural areas, reducing the dependency on large urban centres and distributing economic activity more evenly.
Fostering Inclusive Innovation
A declining workforce pushes industries to be more inclusive and innovative in their approach to talent acquisition and retention:
Diverse Workforce: Companies might focus more on attracting a diverse workforce, including underrepresented groups such as women, older workers, and people with disabilities. Embracing diversity not only helps fill labour gaps but also brings a variety of perspectives and skills to the workplace, fostering innovation and creativity.
Technology to Support Diversity: Technologies like Mitsubishi Electric’s PokeYoke guided picking solution can play a significant role in supporting a diverse workforce. PokeYoke, which means “mistake-proofing” in Japanese, is a system designed to help workers perform tasks in a measured and guided way with simple instructions and visual cues. This technology can be particularly beneficial in creating an inclusive environment by:
Reducing Errors: The system guides workers through processes step-by-step, reducing the likelihood of errors. This makes it easier for new or less experienced workers, including those from diverse backgrounds, to integrate into the workforce.
Enhancing Training: This guided picking solution can be used as a training tool, helping new employees learn processes quickly and effectively. This is especially useful for industries that require precision and consistency.
Supporting Workers with Disabilities: By providing clear, visual instructions and feedback, making it easier for individuals with cognitive or learning disabilities to perform complex tasks accurately.
Creating a Safer Workplace: Guided operator solutions can help prevent accidents and injuries by ensuring that tasks are performed correctly and safely, making the workplace more inclusive and accessible to older workers and those with physical limitations.
Human-Robot Collaboration
Rather than completely replacing human workers, the future could lie in enhancing human capabilities through collaboration with robots and AI:
Augmented Workforce: Collaborative robots (cobots) can work alongside human workers, taking on repetitive or physically demanding tasks and allowing humans to focus on more complex, creative, and supervisory roles.
Enhanced Decision-Making: AI can assist human workers in faster, more accurate decision-making processes, providing data-driven insights and improving overall efficiency and productivity in manufacturing.
AI can assist workers in faster, more accurate decision-making processes, providing data-driven insights and improving overall efficiency and accuracy in manufacturing. Rather than replacing human decision-makers, AI will complement their abilities by offering valuable information and predictions based on large datasets, enabling more informed and timely decisions.
Knowledge Preservation through Technology
The challenge of losing experienced workers and the resulting loss of expertise within the business can be transformed into an opportunity to innovate through knowledge preservation and learning transfer:
Digital Twins: Creating digital twins of experienced workers’ tasks enables the preservation and replication of their skill sets and knowledge, providing a valuable training tool for new employees. This approach not only ensures continuity but also reduces performance and productivity drops when staff change roles or leave the business. By capturing and simulating expert processes, digital twins help new hires quickly reach high performance levels.
AI Mentors: Development of AI systems that act as mentors or guides for less experienced workers, offering real-time advice and feedback based on decades of accumulated knowledge. Soft-touch monitoring via AI mentors can also improve product quality by ensuring that best practices are consistently followed.
Reimagining Education and Training
The need for a highly skilled workforce in the face of a declining population can also drive innovation in education and training systems:
Lifelong Learning: Emphasis on lifelong learning and continuous education ensures workers can adapt to new technologies and changing job requirements throughout their careers. This not only increases employee engagement but also boosts staff retention rates, as workers feel valued and see clear opportunities for personal and professional growth within the company.
Vocational Training: Enhanced vocational training programs that are closely aligned with industry needs, providing workers with practical skills that are immediately applicable in the workplace. This eases the recruitment process by enabling positions to be filled more quickly with higher quality candidates, ensuring that the workforce remains competent and efficient.
Expanding Remote Working Technologies: The Role of Augmented Reality
One particularly exciting opportunity lies in the expansion of remote working technologies, specifically through the use of Augmented Reality (AR). AR can significantly enhance the capabilities of remote work in the manufacturing sector:
Remote Assistance and Training: AR can enable experienced technicians and engineers to provide real-time, remote assistance to on-site workers. For example, using AR glasses, a remote expert can see what the on-site worker sees, overlay digital information, and guide them through complex tasks. This technology is already being utilised by companies like Porsche, which uses AR to train mechanics by combining instructions and diagnostic information directly onto physical components.
Virtual Collaboration: AR can facilitate virtual collaboration between geographically dispersed teams. Engineers and designers can work together on virtual prototypes, making real-time adjustments and improvements, as if they were in the same room. This can accelerate the design and development process, reduce travel costs, and increase innovation. Companies like BMW and Airbus are already leveraging AR for virtual collaboration, enhancing productivity and creativity across their global teams.
Maintenance and Repair: AR can be used for remote maintenance and repair operations. Technicians can access detailed, step-by-step AR guides for equipment maintenance, ensuring accuracy and efficiency. This reduces the need for specialised technicians to be physically present at every site, allowing them to manage multiple locations much more effectively.
Knowledge Transfer: As experienced workers retire, AR can help capture and transfer their knowledge to the next generation. As with AI mentors, AR can record and document expert processes and techniques, creating a valuable training resource for new employees. Companies including Siemens have explored using AR for this purpose, ensuring that critical skills and knowledge are retained within the business.
Turning Challenges into Opportunities
While the declining workforce presents undeniable challenges, it also opens the door to numerous opportunities for innovation and transformation. By embracing sustainable practices, revitalising rural areas, fostering inclusivity, enhancing human-robot collaboration, preserving knowledge through technology, and reimagining education, industries can not only mitigate the impacts of a shrinking workforce but also create a more resilient and adaptable future. This perspective shifts the narrative from one of scarcity and decline to one of potential and growth, highlighting how adversity could in fact drive positive change and innovation.
Is your manufacturing business facing the challenges of a declining workforce and rapidly evolving technologies? At Oyster, we understand the unique pressures of the manufacturing industry. Our expertise in innovative design solutions and strategic marketing can help you not only adapt but thrive. Let us help you effectively market your business and leverage cutting-edge technologies to secure a resilient and prosperous future. Contact us today to learn how we can transform your challenges into opportunities for growth and success.
