Industry shifts back to US, thanks to robots

Washington: Though China and India consider each other to be rival, they may very soon witness an unlikely rival: A recuperating Uncle Sam.  
The new industrial revolution, it appears, has started off in the United States, a country which has been described as a declining power.

“For some time, information technology and social media represented the innovative face and competitive strength of the United States, but that is about to change as innovation is spreading from Silicon Valley to main street. The new frontier of the knowledge economy will be “brainfacturing,” the successor to the old manufacturing that will integrate traditional industrial strengths with the digital world, automation, research-based new materials, and sensors,” explained Foreign Policy magazine.

A decade ago, the magazine said nine out of ten CEOs would have preferred to set up their factories in China about five years ago. But now just two or three would prefer China.

A survey conducted by the Boston Consulting Group in 2012 on major US companies showed that half of the companies with sales over $10 billion were planning to bring back their operations to the United States.

Adjusted for productivity, the American companies, it seems, have realised that the huge differences in labour costs, between the US plants and those in emerging markets, have narrowed, and automation is making its impact felt.

The discovery of shale gas and the resultant cheap energy is giving American manufacturing an unexpected and massive competitive advantage. The cheaper fuel has resulted in more than $90 billion in new investments in manufacturing.