In what would probably be remembered as one of
the greatest forecasting mistakes of the 21st century, Robert J Gordon affirmed
that the innovation indebted to the Information Technologies (IT) revolution
had withered away without any significant real life application in any close
future (Gordon 2012). However, far from a deceased phenomenon, IT is feeding a
new manufacturing revolution that may actually reinvent the economy and change
the notion of competition, supply chain management and markets.
The new boom in manufacturing that allows
entrepreneurs to compete with global firms, is fueled by three different types
of technology, all with a common origin in the IT revolution. The first one is
new production technologies such as 3-D printing that make it possible for
individuals to manufacture their products or their prototypes at a fraction of
the cost of the traditional manufacturing process (Economist 2012). The second
is the availability of cloud SCM systems that make managing a global supply
chain similarly cheaper (Dredge 2011). Finally, the explosion of crowdsourcing
and social manufacturing are redefining the concept of R&D expenditure and
design, with customers taking, literally, control of the products they consume
(Anderson 2010).
These newly empowered entrepreneurs run their
small manufacturing firms in a way that barely resembles the traditional notion
of an industrial firm. Their headquarters are not in industrial parks full of
heavy machinery but in fancy Manhattan apartments full of computers and other
hi tech hardware (Anderson 2010). The new industrial world is a mixture of
generic manufacturing facilities in countries like China and technology startup
offices of Silicon Valley.
But not only daring and innovative entrepreneurs
have taken advantage of this new mode of production. The Pentagon is devoting a
large sum of resources to crowdsourcing manufacture (Lohr 2012), while Asus and
Intel are also part of this new tendency (Guardian 2008). In a
hyper-competitive world, where traditional factories are no longer required and
complex and rigid organizational structures may actually hamper innovation,
large companies will need to embrace this new reality to at least a minimum
extent (Singleton 2012).
The benefits of the new technological revolution
are not only limited to empowering entrepreneurs, providing more
customer-controlled consumption and increasing competition and innovation. The
revolution may actually create the wealth and growth of productivity so fancied
by economists like Robert J Gordon. According to a rough estimate, this type of
technology and business model could generate a $130 billion dollar growth for
the economy in the next decade (Castro, Atkinson & Ezell 2010).
For many young professionals who have seen their
professional aspirations distorted by the current configuration of the economy,
this change may provide alternatives for their creativity. For other companies
who react pretty bad to change, it could mean the beginning of the end. Never
before have salvation and damnation looked so similar for the manufacturing
industry.
References
Anderson, Chris (2010), “In the Next Industrial Revolution, Atoms are
the New Bits” Wired Magazine, January
25.
Castro, Daniel; Atkinson, Robert; Ezell, Stepehen (2010), Embracing
the Self-Service Economy, The Information
Technology & Innovation Foundation, April 2010.
Dredge, Matt (2011), “Is
the cloud the answer to supply chain woes?”, Business Computer World, September 2, available at: http://www.businesscomputingworld.co.uk/is-the-cloud-the-answer-to-supply-chain-woes/
Gordon, Robert J. (2012),
“Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six
Headwinds”, Working Paper 18,315, National
Bureau of Economic Research.
Lohr, Steve (2012),
“Pentagon Pushes Crowdsourced Manufacturing”, The New York Times, April 5,
available at: http://bits.blogs.nytimes.com/2012/04/05/pentagon-pushes-crowdsourced-manufacturing/
The Guardian (2008), “Intel
and Asus try crowdsourcing PCs”, October 30th, available at: http://www.guardian.co.uk/technology/blog/2008/oct/30/wepc-intel-asus
The Economist (2012), “Back
to Making Stuff”, Special Report:
Manufacturing and Innovation, April 21.
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