Adapting to Demographic Shifts in Manufacturing with Technology and Knowledge Transfer

This research highlight discusses the need for strategic workforce planning in the Industrial & Manufacturing sector, addressing workforce shortages, knowledge transfer, and the importance of collaboration with educational and technology partners.

Market Overview  

The aging workforce in the Industrial & Manufacturing (I&M) sector is driving the need for more strategic workforce planning. With a significant number of experienced workers approaching retirement, organizations face a critical shortage of skilled labor. This situation is prompting manufacturers to turn to software-defined automation and digital transformation to mitigate the loss of expertise. As a result, the demand for robots is surging as companies look to fill the gaps left by retiring workers.

The International Federation of Robotics (IFR) highlights that South Korea, for example, now has more than one robot per every 10 employees (1,102 robots per 10,000 employees). As the demand for automation grows, ABI Research forecasts that the installed base of commercial and industrial robots will reach 16.3 million by 2030, with mobile robots overtaking industrial robots in use by 2025. These robots are poised to play a major role in alleviating the pressure from labor shortages and increasing productivity within manufacturing.

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“The fragmented hardware and software environment can result in tribal knowledge as small numbers of operators and technicians have the expertise related to a supplier’s offering, which leaves the facility when they retire or for another position.” – Michael Larner, Distinguished Analyst at ABI Research

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Table 1: Total Commercial and Industrial Robot Installed Base by Type

World Markets: 2022 to 2030

(Source: ABI Research (MD-CIROBO-109))

Type	Installed Base	2022	2023	2024	2025	2026	2027	2028	2029	2030	CAGR 22-30
Industrial Robots	(000s)	2,771	2,864	2,977	3,110	3,263	3,437	3,637	3,864	4,127	4.5%
Collaborative Robots	(000s)	99	125	161	208	272	360	479	649	887	27.6%
Mobile Robots	(000s)	1,139	1,572	2,172	2,961	3,955	5,161	6,583	8,261	10,222	27.6%
Humanoid Robots	(000s)	0	0	0	1	6	25	65	153	319	143.5%
Exoskeletons	(000s)	97	134	171	223	295	388	506	655	820	26.7%
Total	(000s)	4,106	4,695	5,481	6,502	7,790	9,372	11,270	13,581	16,375	16.6%

Addressing Workforce Shortages with Technology Integration

With the rapid departure of baby boomers and a shortage of younger replacements, manufacturing firms face a significant workforce gap. To fill this void, many manufacturers are increasingly investing in automation and digital tools to boost productivity and ease the transition. The adoption of technologies like robotics, Artificial Intelligence (AI), and digital twins is helping reduce reliance on manual labor, while optimizing efficiency.

However, technology should not be seen as a replacement for employees; instead, it should enhance their working experiences. By leveraging automation, manufacturers can focus on innovation, while providing workers with more meaningful and skill-building opportunities. There are still many people-focused areas of improvement that will be vital to manufacturers mitigating the impact of an aging workforce.

Preparing for Retirements with Knowledge Transfer and Mentorship

As older workers retire, capturing their knowledge becomes essential. Tribal knowledge—unwritten expertise passed down through years of hands-on experience—can be critical to operations, but often fades with retirement. Therefore, manufacturers must prioritize structured knowledge transfer. Mentorship programs should not only pass on traditional skills, but also help newer employees adapt to emerging technologies.

New tech-savvy hires can also share the latest tech insights with more experienced workers, fostering a collaborative learning environment. This two-way exchange of information can ensure smoother transitions, while enhancing team capabilities, making the most of each individual’s contributions.

Developing the Workforce of Tomorrow Through Collaboration

The future of I&M industries will depend heavily on collaboration between manufacturers, education providers, and technology vendors. By creating partnerships, manufacturers can influence the development of curriculums that better align with real-world industry needs. It’s essential to make manufacturing an attractive career choice for the next generation, emphasizing the exciting challenges and problem-solving opportunities it offers.

Companies like Siemens and Autodesk are already taking steps to integrate their technology into educational programs, equipping students with the skills needed to thrive in modern manufacturing environments. This proactive approach will ensure the workforce is better prepared for the demands of the industry.

Key Companies

• ABB Ltd
• Aspen Technology, Inc.
• Beckhoff
• Cognex Corp
• Crosser
• Dassault Systèmes
• Emerson
• Google
• Honeywell
• Instrumental
• Keyence
• Litmus
• Machine Metrics
• Microsoft Corporation
• PTC
• Schneider Electric
• Seeq Corporation
• Siemens
• Sight Machine
• ThingWorx
• Universal Robots

Conclusion

To remain competitive and adapt to shifting demographic trends, manufacturing firms must embrace a comprehensive approach to workforce planning that combines the development of human capital with cutting-edge technology. By integrating digital tools, fostering knowledge exchange, and working closely with educational institutions, manufacturers can build a resilient and capable workforce. Those who effectively recruit, retain, and upskill their talent will be well-positioned to thrive in an evolving marketplace.

To learn more about how workforce planning and digital transformation intersect, download the full ABI Research report: Handling the Baby Boomer Exodus in Manufacturing.