The Next Decade: 4 Critical Forces That is Shaping Every Industry’s Future
As we look ahead to the next 10 years, the U.S. economy stands at the intersection of four powerful forces: demographic shifts, technological advancement, persistent labor shortages, and immigration dynamics. Each of these factors alone would be significant—together, they form a complex and high-stakes challenge for every industry including heat treating. Five years from now, many industries will be challenged to create value and compete because of key elements they didn’t know they didn’t know. Hence, they didn’t make key choices to prepare for the winds of change headed our way.
The Metal Treating Institute is laser focused on these winds of change and working together through the Board of Trustees and Task Force Teams and Committees to create the content, connection, and community you need to weather the storm.
The following are breakdowns of the four key forces every company in the heat treating industry needs to have a grasp of to make the key choices to navigate a path to growth and prosperity.
1. The Aging Workforce and Demographic Headwinds
The U.S. population is aging rapidly due to key influences taking place demographically. With Baby Boomers retiring in record numbers and declining birth rates the last 20 years, the labor pool in every industry has been shrinking with no end in sight. The retirement of 100% of the Baby Boomers will place increasing pressure on healthcare systems, entitlement programs, and younger workers. These demographic shifts will reshape consumer demand, tax bases, and government spending. With societal changes on work and over 68 trillion dollars transferring from Baby Boomers to their kids and grandkids, the labor participation rate is projected to decrease by 2030 leaving less workers to service consumers. This means long lines and wait times for many services and products we use each day, as well as potential inflation. This is where AI comes in to play by driving increased productivity to enhance capacity and productivity without increasing workers.
2. Technology and Automation: Double-Edged Transformation
Technology—particularly artificial intelligence and automation—is evolving faster than ever. Forecasters predict AI will grow 37% a year, compounded annually through 2030. While these tools promise massive gains in productivity, they also threaten to displace millions of mid- and low-skill jobs. Companies that adapt and integrate digital systems will thrive. Those that don't may be left behind. Will AI and automation do away with many routine and manual jobs in every industry? Absolutely. Is there opportunity to upskill or reskill for new opportunities for highly-skilled tech and data roles? Absolutely. Something to keep in mind with regards to the fear of AI displacing jobs: Back in the late 1980s, society had the same fear about the internet on displacement of jobs. Studies showed years later that for every job the internet displaced, it created 10 jobs, as innovation evolved from the internet. The same will hold true with AI and automation. There are many job sets we aren’t even aware of yet that will be created as AI evolves. AI provides the opportunity for heat treating companies to expand capacity and productivity without hiring more labor through upskilling, reskilling, and training their current team members.
3. Labor Shortages: The New Normal
Even as technology reshapes work, many industries—manufacturing, construction, transportation, and healthcare—face critical labor shortages. This gap isn’t temporary. We are just at the beginning. With fewer working-age adults and misaligned skillsets, the labor shortage will constrain growth unless associations and their members responses evolve, starting now. The combination of Baby Boomers retiring earlier than normal, birth rates dropping the last 20 years, and side hustles playing a key role in a person’s work life, all have reduced the amount of people within the normal workforce. With demand for workers outpacing supply, this will most likely drive higher wages in every sector causing wage inflation. This will also result in higher costs on training, and workforce flexibility. Hear me out on this...the companies who embrace AI, automation and robotics, and input efficient processes in their operations, requiring less human labor, will be the organizations who thrive over the next decade.
4. Immigration: A Vital Solution
Immigration has long been a powerful engine for economic growth, innovation, and labor supply in the U.S. In the face of demographic decline and labor shortages, immigration could provide the critical fuel for future growth. However, policy uncertainty and political debate continue to complicate the landscape. What people don’t know is that without immigration, the US population will top out in 2032 and begin a slow decline of negative growth. That is an unfortunate reality. Birthrates in many countries, including the US, have been decreasing since 1970s that is leading to the long term labor shortage we are now facing. It is critical that policy be generated that can open the door for a wide range of immigrants to fill the labor gap that isn’t going away. As the need for jobs grows, the need for workers is even greater.
The Bottom Line: A Fork in the Road
I know many Members who “hope” these challenges will work their way out. These four forces are not a phase…they are very real; meaning “hope” is not a business strategy. While hope keeps organizations looking forward, it can also keep organizations from embracing the choices needed to be made to lead a company into the future.
The next decade won’t just test every companies core foundations. It will test our capacity to adapt, collaborate, and lead through change. The Metal Treating Institute is laser focused on what’s next. It is critical you are having discussions with your management teams no how your company will navigate growth given the impact of these four elements influencing everyone’s ability to operate and thrive.
Keep your team engaged with MTI’s flow of content focused on building plant operations, leadership development, AI, technical training, forecasting, and a connection to the besting information and professionals in the industry.
As was stated in the movie, The Gladiator, “Whatever comes out of these gates, we have a better chance of survival if we work together. We work together, we survive.”
If you would like to schedule a virtual meeting with your team at MTI to learn how your company can better engage MTI’s various resources, email our Director of Member Experience, Kristen Speer, at kristen@heattreat.net.