As the manufacturing sector remains under unusual scrutiny entering 2024, asset-intensive industries will likely slow their roll-out of new technologies, according to a forecast from consulting firm Forrester Research Inc.
Major manufacturing regions such as China, Europe, India, the U.S., and others are paying more attention to where and how things get made than they have for decades, Forrester says in a report released today, “Predictions 2024: Smart Manufacturing.”
As part of that increased scrutiny, subsidies and political clout are being lavishly spread in a race to attract and retain strategic manufacturing capacity, the report said. However, dramatic headlines about AI’s transformational power, the imminent automation of every job, or the wholesale shift of factories from one side of the planet to the other rarely stand up to scrutiny in the manufacturing sector. That’s because sunk investment in industrial equipment with lifespans typically measured in decades prevents the rapid pivots sometimes seen in less asset-intensive businesses, Forrester said.
Against that backdrop, manufacturing companies in 2024 will probably recalibrate some of the most breathless promises of cutting-edge technologies. “Digital innovation is alive and well in the manufacturing sector, but it has to be measured and thoughtful. Innovations must deliver value in the harshest conditions, and they must work for — and be accepted by — an ageing and over-stretched workforce that will be skeptical of the latest unreliable gadget parachuted in from some remote innovation lab,” Forrester researchers said.
Accordingly, Forrester is forecasting a slowdown in the deployment of four specific technologies in the manufacturing sector.
First, over 75% of industrial metaverse projects will rebrand to survive “the metaverse winter.” The mere phrase “industrial metaverse” was an opportunistic rebranding of a group of existing technologies that looks increasingly unwise: Close association with the metaverse risks becoming the kiss of death to otherwise exemplary industrial projects. To keep existing budgets or attract new investment in 2024, technology leaders in manufacturing will stop talking about the industrial metaverse and return to emphasizing its building blocks, such as: augmented reality, the internet of things, and digital twins.
Second, generative AI will not transform the business of manufacturing in 2024. Manufacturing leaders are intrigued by generative AI (genAI), but they’re moving more cautiously than their peers in other industries. That’s because workflows require complex interactions between a set of ecosystem partners and a range of expensive machines. And the impact of mistakes, or genAI’s so-called “hallucinations,” on physical work is prohibitively high with lost productivity, damaged machines, or even injury.
Third, among Fortune 500 manufacturers, 30% will dilute plans to bring manufacturing home, also known as re-shoring. Government subsidies, political pressure, and painful lessons learned during recent supply chain disruptions encouraged many western manufacturers to make bold announcements about bringing jobs back from the offshore locations to which they were sent decades ago. But early movers have found it harder than expected because: 1) complex processes weren’t sufficiently well understood to automate smoothly; 2) individual software and hardware solutions didn’t scale as expected; 3) achieving interoperability between solutions from different vendors was rarely straightforward; and 4) finding and training locals to operate these tools was difficult.
Fourth, autonomous vehicle investors seek quicker returns in controlled environments. Elon Musk promised self-driving cars “within three years” in 2013, and we’re still waiting. Hurdles like real technical challenges, regulatory caution, legislative territoriality, and consumer diffidence mean that self-driving vehicles on every public road are still some way off. But automated vehicles have been transforming more controlled environments in warehouses, factories, and ports for years.