US Lags as China Automates Its Way to Top

China is establishing a substantial lead in modern manufacturing through widespread adoption of automation, robotics, and artificial intelligence. Unlike the United States, which largely views AI as a research endeavor, China treats it as integral factory work, embedding it in processes like machine guidance and real-time problem detection. This has resulted in numerous 'smart factories' across China, with over half of new industrial robots globally installed there in 2024.

This strategic focus on factory modernization, driven by government initiatives at all levels, allows Chinese plants to achieve higher productivity per worker compared to their U.S. counterparts. While some American companies are experimenting with AI, they face significant barriers, including data integration issues, the high cost of AI projects, and a shortage of skilled workers. U.S. policy often targets trade flows rather than factory performance, potentially hindering efforts to adopt necessary modernizing equipment.

Other advanced economies like Germany, Japan, and South Korea are also implementing similar strategies to enhance manufacturing competitiveness. The article suggests that the U.S. should shift its focus from invention to deployment, investing in workforce training, modernizing equipment, and supporting digital infrastructure for manufacturers of all sizes to close the productivity gap.