Manufacturing & Supply Chain

Warnings for Irish manufacturers amid the AI boom

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Warnings for Irish manufacturers amid the AI boom

Warnings for Irish manufacturers amid the AI boom
February 09
11:11 2024
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By John Whelan

Artificial Intelligence, or AI, has been all over the news recently, but not for all the right reasons. Generative AI systems like ChatGPT and Google’s Bard, captivated the world by rapidly spewing out new poems, songs and computer-authored books and are expected to have a sweeping impact on life and work. But, beyond the media hype, AI technology could bring about a fundamental change in how Ireland’s manufacturers operate.

Manufacturers are facing dramatic challenges, driven by changing consumer demands, the rapid pace of advances in technologies of which AI is an important part and accelerating global competition.

Barry Kennedy, the chief executive of the Irish Manufacturing Research, or IMR, organisation, says that by 2030 the manufacturing landscape will look significantly different, and will be virtually unrecognisable from 15 years ago.

Mr Kennedy worries that Ireland remains vulnerable to changing investment trends in manufacturing, which in turn has potentially significant implications on Ireland’s future prosperity.

In particular, he is concerned that manufacturing in Ireland is not keeping pace with the rapid increase in advanced automation, robotics and the AI digital transformation.

All these technologies are sucking up investment internationally.

According to the The World Robotics Report 2023, robotic investment in Europe is led by Germany. Britain comes in at only one-tenth of the German investment levels, and Ireland is considerably below the UK level.

The IMR believes the importance of advanced automation and robotics lies in its wide-ranging impact on Ireland’s capacity to maintain and expand competitive manufacturing.

There are many thousands of jobs at stake, with a widening gap between the robotics haves-and-have-nots, according to the IMR.

Medium and large manufacturers who have invested in new AI-driven robotics are reaping the results.

Manufacturers struggling

Meanwhile, smaller manufacturers are struggling, despite the generous grants available from the Government agency, Enterprise Ireland.

These concerns are amplified by a recent report from the Central Statistics Office on productivity. Labour productivity measures the amount of output per hour worked, and the fall in the third quarter last year indicates the economy became less efficient.

It is also important to remember that overall productivity is not only dependent on labour. Capital, such as machinery and equipment, particularly robots, is another key element.

There are implications for the Irish industry. The Future of Jobs Report 2023 indicated that by 2027, a significant share of work tasks will be automated.

At the World Economic Forum in Davos, the impact of AI and robotics on industry and workers in factories and offices was a recurring topic: A survey of chief executives in more than 100 countries by PwC found that some chiefs think they’ll have to lay off staff because of the rise of generative AI.

However, the survey stressed that business leaders believe that AI will help automate mundane work tasks, or make it easier for people to do advanced manufacturing jobs.

There is no doubt that AI and robotics will revolutionise manufacturing, enhancing job satisfaction while at the same time increasing productivity.

However, it is a rapidly evolving environment. Manufacturers can’t afford to fall asleep at the wheel and outdated learning programmes may exacerbate any skills mismatch.

Countries are implementing smart-manufacturing strategies and making investments to ensure that their manufacturing enterprises, large and small, are well-positioned.

If Ireland wishes to remain a leading smart manufacturing economy, policymakers must implement more robust, proactive, and coordinated public policies that support Ireland’s manufacturers.

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