COVID and Advanced Manufacturing

Numerous industries have been negatively impacted by the pandemic with many scrambling to adapt and a select few able to respond swiftly. Shortages of personal protective equipment (PPE) have exposed the core weaknesses behind U.S. overreliance on global supply chains for critical medical products, raising concerns about resiliency in American advanced manufacturing. Prior to the COVID crisis, U.S. manufacturers struggled with global cost-competitiveness, however, innovation in the industry and new pressure on reshoring presents new opportunities for the industry and its workforce in a post COVID economy. 

While sourcing PPE was a major cause for concern in the early stages of the pandemic, this disruption was also emblematic of supply chain inefficiencies in other critical industries such as pharmaceuticals, medical devices, semiconductors, automotive, aerospace, textiles and chemicals, communications, and IT hardware manufacturing. For the Life Sciences sector in particular, in-house manufacturing will become central to withstanding external shocks. As businesses adjust to new outlooks, manufacturing supply chains overall will also likely need to be more digital. Industry 4.0 technologies, which include connectivity, advanced analytics, automation, and advanced-manufacturing technologies, are expected to take on a critical role in the road to supply chain recovery. In restoring operations, entities that have established digital and virtual strategies are faring better than their disconnected counterparts. While these industries continue to garner traction and investments, economic developers should think about leveraging  regional talent generators and workforce development providers in the areas of advanced manufacturing. As labor demand in the advanced manufacturing sector shifts from low-skill, low-cost labor to mid- to high-skill engineering and technical capabilities, a talented workforce, especially with regard to digital fluency, will be instrumental in preparing to meet increasing demand in these sectors. 

In addition to a focus on workforce, economic development experts suggest that localizing critical industries and their component supply chains could help alleviate the instability uncovered by the pandemic and create added economic growth opportunities. Though reshoring policies are largely dependent on national policy, economic developers at the local level can take advantage of Opportunity Zones to leverage larger, capital-intensive manufacturing projects. Puerto Rico is a leading example of pharmaceutical companies choosing an American alternative over Asian manufacturers.  Overall, strategic thinking around diversified production, improved supply chain collaboration, increased automation, and technologies that enable remote work provide opportunities abound in spite of challenges.