3 Macro Trends Driving the Future of Manufacturing

Despite concerns over the potential impact of tariffs, economic activity in the U.S. manufacturing sector continued to expand in September, as the economy grew for the 113th straight month, according to the latest report from the Institute for Supply Management. Demand held strong, and consumption and supplier inputs increased, with 15 of 18 manufacturing industries reporting growth during the month. This trend continues in a year which saw the manufacturing industry add 327,000 jobs through July, the most since 1995, CNBC reports.

Manufacturing is expected to continue growing faster than the rest of the economy over the next few years, with production increasing 2.8 percent this year before slowing to 2.6 percent in 2019 and 2 percent in 2020, the Federal Reserve projects. The recent renegotiation of NAFTA may improve this outlook further by putting increased pressure on Chinese manufacturers and promoting an accord between the U.S. and China in 2019, Citigroup predicts.

While political developments such as this are helping drive the expansion of the manufacturing sector, technological trends are also giving impetus to industry growth. Here’s a look at three major tech trends helping fuel the future growth of manufacturing.

Industry 4.0

The most dominant driver of manufacturing today is the convergence of technology trends that has been dubbed the Fourth Industrial Revolution, or Industry 4.0. Industry 4.0 encompasses a range of technologies that are transforming manufacturing into a hybrid of digital and physical processes. These technologies include the Internet of Things, cloud computing, artificial intelligence and cyber-physical systems that provide digital oversight of physical manufacturing. Together Industry 4.0 technologies will grow to a value of $214 billion by 2023, creating unprecedented opportunities for optimizing production, Reportlinker projects.

At the heart of the Fourth Industrial Revolution are smart factories connected to the Internet of Things, which Capgemini estimates could add as much as $1.5 trillion to the global economy by 2022. Smart factories optimize production processes by using artificial intelligence to analyze data collected from sensors embedded in factories as well as data supplied by the internet. This enables manufacturers to identify which factors are limiting production, optimize those factors for maximum efficiency, and predict and fix maintenance problems before they arise. Manufacturers can even incorporate data from consumers in order to integrate production with marketing. For instance, German chemical giant BASF has developed a smart production system that uses radio-frequency ID tags to automate the process of producing customer soaps and shampoos tailored to customer orders.

3-D Printing

Another important component of the Fourth Industrial Revolution is 3-D printing. Three-dimensional printing replaces traditional subtractive manufacturing molds with an additive process based on a digital design, allowing greater flexibility in shapes and materials while speeding up the production process and cutting costs. Three-dimensional printers can produce materials using virtually any substance for ink, including metal, concrete, electronic circuitry and biomaterials. The convenience, efficiency and savings offered by 3-D printing have made it a disruptive force in the manufacturing industry, with the global market for 3-D printing services projected to grow to $33 billion by 2023, ResearchandMarkets.com estimates.

Aircraft manufacturer Airbus illustrates the benefits of embracing 3-D printing. The company is able to produce aircraft parts at half the cost of traditional manufacturing methods. Rival aircraft manufacturer Boeing saves $3 million per airplane by using 3-D-printed parts. Apple Rubber, which supplies o-rings to clients in the aerospace industry and other industries, is able to offer customized products in over 8,000 sizes made of specialized materials such as heat-resistant Viton thanks to using 3-D printing.


Industrial robots are another vital driver of Industry 4.0. While robots have been used in manufacturing for decades, the latest innovations have exponentially increased their value in the production process. Today’s robots have unprecedented precision, using six-axis articulation, miniaturized gearbox design and laser sensors that make them capable of performing tasks that equal or exceed what the human hand can do. For example, German tool manufacturer Weller makes automated soldering systems that can weld along a seam or even do laser welding.

Industrial robots also incorporate artificial intelligence, which is enabling them to interact with humans in collaborative ways, an application known as “co-bots”. Co-bots are designed to assist humans with repetitive tasks, enabling human workers to focus on areas that require their attention. For instance, co-bots in San Francisco hospitals use co-bots called Tugs that deliver medication and food to patients and pick up laundry and trash. Co-bots will help make industrial robots the largest segment of the Industry 4.0 market, growing to a global value of $81.47 billion by 2022, Markets and Markets projects.


Industry 4.0 smart factories, 3-D printing and robotics are three of the biggest technological drivers of manufacturing growth today. In conjunction with political trends promoting manufacturing, these technologies hold the promise of pushing the industry to historic levels of productivity over the coming decades.