The Implications of Accelerating Automation on Site Selection and Economic Development

Oct 8, 2020

The Implications of Accelerating Automation on Site Selection and Economic Development

 

In recessions prior to 2001, manufacturing jobs generally increased to near pre-recession levels during recoveries (see figure below). Due to increasing automation, in the late 1990s the number of manufacturing jobs began to decline while industrial production continued to increase. Then, unlike job recoveries after previous recessions, following the 2001 and 2008 recessions,  jobs were significantly and permanently reduced post-recession.

Source: BLS Board of Governors

Like the last two recessions, the current recession and COVID-19 experience will permanently reduce the manufacturing workforce.  Other related implications for economic development and site selection include:

  • Communities without broadband internet, skilled workforces and competitive education systems will be left further behind and will lose ground faster than ever.
  • Manufacturing productivity will continue to rise, and investments will be increasingly capital intensive.
  • Location incentives encouraging creation of jobs will matter less and those benefitting capital investment will matter more.
  • Site searches will place greater importance on the ability to locate facilities in regions with skilled workers able to operate increasingly complex systems and equipment.
  • Education will become more urgent. Site searches will increasingly evaluate the long-term viability and success of school systems.

For even more insights on corporate site selection and trends in economic development, please check out our INSIGHTS and NEWS pages.

 

[Strategic Development Group, Inc. (SDG) is a professional site location firm that provides solutions to its corporate clients related to their site selection decisions. Leveraging a professional team with decades of experience across the US in locating domestic and foreign projects resulting in billions of dollars in capital investment, SDG is nationally recognized for innovation, competency, integrity and results.]

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