Manufacturing has seen recent, radical changes to its processes, technologies, markets, workforce and supply and distribution channels.

The key trends driving these changes will inevitably become more influential in the coming decade, and while the sector will continue to generate economic growth and transform lifestyles and living standards, by mid-century the manufacturing footprint will look dramatically different.

Five megatrends will alter the way manufacturers do business and further increase their value to society.

1. The new industrial revolution: This era’s been called the third industrial revolution and for good reason: We live in a time of exponential growth in technology, with manufacturers leading the way.

The Industrial Internet will create smarter factory floors and integrated supply chains that improve productivity. More broadly speaking, the Internet of Everything will connect machines, people, and data across society, leading to such benefits as a self-correcting electrical grid, better traffic flows and reduced household energy consumption. 3D printing will enable smaller firms to mass-produce and customize simultaneously. Nanotechnology is leading to more durable, safer products and is generating medical breakthroughs that were once the domain of sci-fi writers.

But with the rewards of technology come significant risks. Cyber security threats are a top concern for businesses and consumers. Unfortunately, as former CIA Director Michael Hayden has observed, private industry can’t expect the government at this time to come to the rescue. Businesses must take responsibility for the safety and security of their systems and data.

2. Aging workers and automation: Demographics are reshaping global labor markets. Start with the fact that the manufacturing workforce is rapidly aging—overall, about 10,000 baby boomers are retiring each day. This loss of institutional knowledge is exacerbated by millennials’ lack of interest in manufacturing careers (one survey shows only 37 percent of U.S. adults would encourage their children to enter the sector). Yet manufacturers’ needs are changing as well: companies now rely on more automation and require fewer employees, and those they hire come with higher science, technical and math skills.

Fortunately, the millennial generation—almost as large as the baby boomer generation—is more technologically sophisticated. Since women and minorities make up an increasingly large share of the general workforce, manufacturers are working to foster more inclusive environments. They are also collaborating with secondary schools and community and technical colleges to create curricula to equip a new generation of employees with the skills to succeed on the 21st century shop floor.

3. Data and you: The ability to collect and analyze large volumes of data in economic transactions has revolutionized customer care in the retail and finance sectors. In manufacturing, the concept of big data will accelerate the integration of IT, manufacturing, and operational systems on the shop floor, and lead to better forecasting and better understanding of plant performance. Customers are becoming more knowledgeable about the total cost of ownership and firms are responding with new forms of value and a more effective total customer experience. Big data, enabled by open platforms and crowdsourcing that allow a quantity and quality of interaction never before possible, has the potential to radically alter how manufacturers design and distribute their products.

4. Global supply chains and marketplace: With the advent of advanced communications and more efficient transportation, the world has seen supply chains stretch across oceans and continents. While the United States remains the largest market, 95 percent of potential customers live outside our borders; 45 percent of U.S. manufacturing revenue is now generated overseas.

The rapidly growing markets and relatively inexpensive labor in Asia, Latin America and Eastern Europe have encouraged American manufacturers to build plants and expand customer bases abroad. Yet global businesses also find themselves exposed to political instability, volatile energy and commodity prices, supply chain disruptions, and regional economic uncertainty. Currency fluctuations also matter—the average U.S. manufacturer has currency exposure in four global regions or eight countries, and half of U.S. companies will enter two new markets by 2020.

5. Growth of new megacities: The migration of consumers to urban areas has global implications for manufacturers. Urbanization not only creates new opportunities for markets, but also affords a diversity of production-related resources, human and otherwise, whose value is reinforced by the synergies that arise from geographic clusters. At the same time, population concentration gives rise to complex spatial and mobility configurations, creating both increased supply chain efficiencies and logistical difficulties.

The United Nations estimates that the percentage of people living in urban areas will climb from 54 percent today to 66.4 percent by 2050—a migration of 2.4 billion people. Megacities (those with 10+ million inhabitants) will become key centers of economic growth in the coming years; the number of these markets is expected to rise from 29 today to 41 by 2030. While the proportion of megacities in Asia (58 percent) won’t change, the number in Africa is expected to double, from 3 to 6.