Automation, AI and Reshoring: Inflation and Interests Rates Won’t Stop Growth

Association for Advancing Automation CEO Jeff Burnstein on the future of American manufacturing.

With a chronic industrial labor shortage in America, combined with climbing interest rates and high inflation, the challenges for American manufacturing are increasing. Geopolitical conflict with Russia, strained relations with China and the emergence of artificial intelligence are adding even more uncertainty. For the automation sector however, these challenges present a golden opportunity for a major revamp of the how, why and where of American manufacturing. Association for Advancing Automation CEO Jeff Burnstein makes the case for a bright future, in conversation with Jim Anderton at Automate 2023 in Detroit.  

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Episode Transcript:

Jim Anderton 

Welcome to a special This Week in Engineering from Automate 2023 in Detroit, Michigan. I’m with Jeff Bernstein. He’s president of the Association for Advancing Automation. 

And Jeff, there’s a real vibe on the show floor behind us. It’s been a busy, busy show. A lot of interesting technologies on display out here. A lot of excited people. I’m hearing a lot about A.I.. It’s the heights on everyone’s lips these days at this point. We’re seeing it in action on the show so far here. What’s your feeling? Do you think it’s going to be a real factor in automation this year? 

Jeff Burnstein
I do think it’s going to be a real factor. It’s increasing in its ability. I mean, we’ve been hearing about A.I. for the whole four decades. I’ve been involved in robotics and automation starting to, you know, really become a an exciting technology with a lot of applications. Fact One of the featured theater presentations is a panel of A.I. experts talking about chat and the impact it will have on industrial automation. 

Jim Anderton
Now it’s coming out of COVID. Of course, a lot of talk about reshoring and near shoring. The labor equation is still the problem down here. The obvious solution would seem to be to automate you automate your way out of these problems down here. But historically it’s been hard for small to medium midsize companies to break in. It’s been complex and expensive. 

I’m seeing some lower cost, easier to use solutions now, too. Is this is this industry going to reach down into the future? Mom and pop job shop operations? 

Jeff Burnstein
Well, we certainly hope so. We’ve made a lot of progress in those areas, like you said, in terms of ease of use and lower costs. And, you know, companies don’t have the skilled labor pool that would have been necessary to do more complex robots. But maybe now with these advances in no code and low code that we’re going to be able to see smaller companies starting to automate at a greater scale. 

Jim Anderton
Now we see it in the alternate energy space, things like electric vehicle battery companies. The Biden administration’s been throwing around a lot of money, a lot of cash to be had for certain sectors at this point. Is the regulatory, the tax environment, is it conducive right now for for the automation industry or to switch to advanced automation? 

Jeff Burnstein
Well, there was a tax incentive that expired recently that was helpful where companies could expense the full amount in the year that they purchased the equipment. We’re trying to get that restored and hopefully that’ll happen. But overall, I think that the real issue is right now inflation is kind of high. The cost of borrowing money is high. So that may be holding back our ability to see greater investments. 

So we’re already seeing it this year. Our first quarter numbers came out and they weren’t as strong as last year. So we may see lower numbers this year. 

Jim Anderton
And I remember feeling about the combination of inflation and interest rates. Is their do they believe that we’re going to see higher rates, steady rates, rates dropping? 

Jeff Burnstein
You know, that I don’t know. I think we’re going to see the rates up there for a while. And a lot of people are talking about a recession next year. And but other people think that the automation industry will suffer less than others from that situation because of labor shortage issues and the need to transition to electric vehicles. 

So, I mean, there’s all sorts of reasons why automating is a good choice. 

Jim Anderton
Advanced automation is the right technology for right now, says Jeff Bernstein of the Association for Advancing Automation.

Written by

James Anderton

Jim Anderton is the Director of Content for Mr. Anderton was formerly editor of Canadian Metalworking Magazine and has contributed to a wide range of print and on-line publications, including Design Engineering, Canadian Plastics, Service Station and Garage Management, Autovision, and the National Post. He also brings prior industry experience in quality and part design for a Tier One automotive supplier.