Given the global reach of manufacturing and the intensifying policy focus that the factory sector has enjoyed in recent years, it is critical for the public, manufacturing executives and governments to gain perspective on what some are dubbing a “new industrial revolution.”

Globalization challenges goods producers along many dimensions. Large low-cost labor pools in the developing world have created increasing pressure to accelerate labor productivity gains in advanced nations. A global market and the evolution of truly worldwide supply chains require successful manufacturing companies to be nimble and quick. Efficiency, time-to-market, inventory planning and quality are all pressured more than ever.

As if this were not enough, manufacturers are also confronting growing constraints on labor supply and human capital. Retirement waves; a shortage of critical science, engineering and math skills; and a sense that workforce entrants are biased against manufacturing careers add to the challenge of producing in often unforgiving markets—and at a difficult time for the world economy.

The response to such a challenge is innovation, which drives change.

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