By 2030, the U.S. faces a full-blown manufacturing crisis which means 2.1 million unfilled positions, even as the industrial automation and software market doubles from $150 billion to $300 billion. How can an industry simultaneously grow and face a crippling labor shortage?
Sebastián Trolli, Head of Research for Industrial Automation and Software at Frost & Sullivan, spent over 20 years analyzing this paradox. His research reveals a critical insight: technology investment alone won't solve manufacturing's crisis. The answer lies in bridging the gap between cutting-edge technology and the people who make it work.
In this blog, we’ll break down the core reasons behind the disconnect and outline a practical, people-first framework for manufacturers ready to close the gap.
The Manufacturing Paradox
The numbers tell a startling story. Half of manufacturing workers are over 45, and a quarter are over 55. As this experienced workforce retires, decades of irreplaceable knowledge walks out the door to what experts call "brain drain." Meanwhile, manufacturers struggle to attract digital-native younger generations who see factory work as outdated.
Yet paradoxically, manufacturing has never seen more investment. Venture capital and private equity firms poured over $8 billion into industrial software companies in 2024-2025 alone, a record. And 94% of manufacturers say digital strategy is essential for growth, with 83% planning AI investments by 2026.
The disconnect is clear: companies are investing in technology but losing the people who can actually use it.
Why 2026 Is Manufacturing's Tipping Point
According to Frost & Sullivan's research, 2026 marks the shift from AI experimentation to large-scale deployment. Manufacturing AI spending will hit $17 billion, and 20% of factories with computer vision systems will adopt AI-driven technologies.
This isn't another pilot year, it's the year successful pilots scale or die. The window for transformation is now, and manufacturers face two paths: adapt or fall behind.
Bridging the Gap: A 3-Pillar Framework for Transformation
If manufacturers want to close the gap between advanced technology and the people who run their operations, it’s not enough to digitize the factory. They need to rethink how automation, software, and strategy all work together, with the human workforce at the center.
Here’s the framework we’ve seen work in practice: three tightly connected shifts that enable growth, adaptability, and resilience.
Pillar 1: Rethinking Automation - Human-Centric Approach
Traditional automation aimed to replace workers and cut costs. The new approach uses automation to empower workers, not eliminate them.
What does human-centric automation look like?
Operator-first design: Interfaces and tools should be intuitive, flexible, and built around how people actually work and not how systems were designed decades ago.
Collaborative robots (cobots): Working alongside humans rather than replacing them in isolated cells.
Reconfigurable automation: Systems that can be reconfigured in days, not months, making it easier to adjust to demand or product changes
Augmented work environments: Using AR or VR to train, guide, and support frontline workers in real time.
The goal isn’t to automate around people, it’s to automate with them. When workers see technology as a partner, not a threat, adoption climbs and outcomes improve.
Pillar 2: Rethinking Software - The Digital Force Multiplier
Industrial software should transform frontline workers into "digital super users" who can do more with the tools available to them
Trolli calls this " ‘do more with more’ instead of ‘do more with less’ ".
Key technologies bridging the gap:
Knowledge capture systems: Augmented and connected worker platforms that document expertise before experienced workers retire, creating a digital twin of workforce knowledge.
Real-time analytics: Dashboards that let operators monitor multiple production lines simultaneously, democratizing data access across the organization.
Software-defined factories: Control systems becoming increasingly software-driven, with virtual PLCs replacing hardware controllers.
AI as multiplier: AI-driven vision systems, predictive maintenance, and quality control that augment human decision-making while keeping humans in the loop.
Critical distinction: AI suggests, operators approve. The final decision remains human.
Pillar 3: Rethinking Strategy - Four Strategic Imperatives
Technology alone doesn’t create transformation. The third and often most overlooked pillar is strategy: aligning people, tools, and leadership under a shared vision.
1. Reinvest in People -"People First"
Launch continuous upskilling programs (boot camps, apprenticeships)
Involve workers in technology deployments to create ownership and pride
Revamp recruiting to show digital natives that manufacturing is "cool" and high-tech
Foster top-down digital culture where every role matters, from CEO to frontline
2. Scale Technology Boldly -"Go Big on Automation & Software"
Develop technology roadmaps aligned with business goals
Move from pilots to scale quickly
Integrate AI strategically to augment operator capabilities
Deploy and train simultaneously so workers embrace tools from day one
3. Build Resilience -"Absorb Disruptions"
Implement reshoring and nearshoring strategies (74% of executives already are)
Embrace small batch production enabled by flexible automation
Invest in modular production lines with quick reconfiguration capabilities
Create end-to-end visibility through connected data systems
4. Collaborate Through Ecosystems -"No One Can Do It Alone"
True manufacturing ecosystems require six actors working together: tech providers, manufacturers, investors, educational institutions, industry consortia, and open-source projects. Innovation happens at intersections, and industry-wide transformation requires industry-wide collaboration
What You Can Do: Action Plans by Role
No matter where you sit in the manufacturing ecosystem, closing the technology–people gap is within your control. Here’s how to get started:
If You’re a Manufacturer: Build With Your People, Not Just for Them
Start small, but start now. Don’t wait for a company-wide transformation. Pick one high-friction process and redesign it with operator input.
Bring frontline teams into the rollout. Let workers test, give feedback, and co-create new tools. Involvement builds trust and faster adoption.
Make learning continuous. Formalize upskilling through boot camps, mentorships, and digital training tools that evolve with your systems.
Connect beyond your walls. Partner with educational institutions, join industry working groups, and find tech vendors who want to collaborate and not just sell.
If You’re a Software Vendor: Solve Real Problems, Not Just Build Features
Design for the operator experience. A tool that’s intuitive on the shop floor is more powerful than one that just checks technical boxes.
Go beyond the product. Pair your offering with training, onboarding, and support. Adoption doesn’t end at deployment.
Price for outcomes. Consider success-based models that reflect shared accountability for results.
Invest in user communities. Enable peer-to-peer learning, share implementation playbooks, and make your customers smarter over time.
If You’re an Investor: Back Companies That Build for the Long Term
Fund the enablers. Look for solutions that enhance human capabilities—like no-code tools, AI copilots, or workforce knowledge platforms.
Measure more than margin. Pay attention to how companies support users, document outcomes, and prioritize real manufacturing impact.
Play the long game. Industrial tech doesn’t scale overnight. Be ready to support teams through pilot-to-scale transitions.
Connect your network. Create bridges between your portfolio companies, manufacturers, and talent pools. Ecosystems value compounds over time.
The Two Paths Forward
Path one: Inaction leads to lost competitiveness, accelerating talent drain, and vulnerability to disruption. Companies that wait will watch their technology investments fail, not because the tools were wrong, but because the people were left behind.
Path two: Transformation means aligning technology with people through strategy, training, and a culture of continuous improvement. It’s harder. But it’s the only path that works.
The companies that choose to bridge the gap today won’t just keep up.
They’ll define the future of manufacturing.
What It Looks Like When It All Comes Together with Tulip
This three-pillar approach isn’t just theory, it’s already working in the field.
A global pharmaceutical company used Tulip to digitize a highly manual, complex changeover process. Before, they relied on an 80-page paper SOP, frequent errors, and a 14-day turnaround. There was little visibility into where things broke down, only frustration and delay.
By replacing manual paperwork with interactive digital apps, they cut changeover time by 78%, from 14 days to just 3, and virtually eliminated human error to near-zero. What once depended on memory and muscle memory became a repeatable, data-driven system that empowered the team rather than sidelining them.
That’s the Tulip way: build fast, with your people in the loop, and scale what works.