05 January 2013

American Monkeys Should Look to Taller Trees

American monkeys are under stress from other countries’ monkeys in regards to less complex, easier-to-make products. So the U.S. [monkeys] should look to the taller trees. The tallest trees in product space are pharmaceuticals, chemicals, and machinery. It’s very hard to get into those. Very few countries are in that game.

That is why I say the really long-term play is for the U.S. to be the source of the machinery that will power the coming global manufacturing revolution. The U.S. can grow by using capabilities that few others have.

...I think 3-D printing could change the dynamics. I use 3-D printing as shorthand for shorter production runs, more design, and much closer to the market. It’s a paradigmatic shift in what manufacturing is going to look like. _Ricardo Hausman on Future Manufacturing in Technology Review
Hausman is one of several economists who are beginning to look at how a resurgence in manufacturing might boost US and other western economies back into a competitive position -- or at least into a position where they could imagine a longer term, livable future. He mentions 3-D printing, which is likely to develop into many significant niche markets, but how long will it be before molecular nano-manufacturing steps in to take over all of the niches?

The shale gas fracking boom has helped to trigger a US resurgence in manufacturing related to chemicals and other industries that rely on cheap natural gas and cheap electricity. But there are a number of other ways to make new-generation manufacturing more viable for advanced western nations.
The strategy adopted by many multinational conglomerates, whether based in the U.S. or in Europe, was simple: substitute inexpensive labor for capital. Why invest in a machine to assemble iPhones when Chinese companies could throw half a million workers at the problem? The Internet, telephones, and affordable air travel and sea shipping made it easier than ever to coördinate labor from far away.

Partly as a result, the U.S. lost about six million manufacturing jobs—33 percent of the total—between 2000 and 2010, and China has overtaken the U.S. as the world’s largest producer of manufactured goods. But the impact extends beyond macroeconomic statistics.

...Lately, however, economic trends have been turning. Wages in China’s southern cities have been rising fast and may soon reach $6 an hour, about what they are in Mexico. Boston Consulting Group—the same consulting firm that told clients to run, not walk, overseas—now says it’s time to “reassess” China and estimates that for some products, that country’s overall cost advantage could disappear by 2015.

The vanishing comparative advantage of Asian cheap labor isn’t the only reason for companies to question offshore manufacturing. Natural catastrophes can occur anywhere, but the risks of long supply lines became apparent in 2011, when the Japanese earthquake and tsunami interrupted shipments of computer chips and floods in Thailand left disk-drive factories under 10 feet of water. Meanwhile, higher oil prices have quietly raised the cost of shipping goods. And a bonanza of cheap natural gas has made the U.S. a relatively cheap place to manufacture many basic chemicals and is providing industries with an inexpensive source of power.

...The U.S. holds advantages in many advanced technologies, such as simulation and digital design, the use of “big data,” and nanotechnology. All of these can play a valuable role in creating innovative new manufacturing processes (and not just products). Andrew McAfee, a researcher at MIT’s Sloan School of Business, says it’s also hard to ignore coming changes like robots in warehouses, trucks that drive themselves, and additive manufacturing technologies that can create a complex airplane part for the price of a simple one. The greater the capital investment in automation, the less labor costs may matter. _Antonio Regalado in TechnologyReview
Manufacturing that relates to agriculture -- and how to get the most sustainable production out of one's growing area -- is another promising area for US manufacturing. Producing agricultural machines which run on cheap natural gas would be one good idea. Producing robotic agricultural machines which free up farmers from labour limitations is another good idea for manufacturing in the agricultural field. There are many others that could help transform US agriculture into an even mightier economic powerhouse.

Advanced genetic engineering will impact all aspects of our lives, from the food that we eat, to the fuels we put in our fuel tanks, to the biomedical products that will presumably help us to live longer, healthier, more satisfied and productive lives. New machines that facilitate automated research, discovery, design, and production in genetic engineering will help to push that area of industry into the forefront -- for any nation that promotes their development.

US technology has been bogged down on smart phones, pad computers, and other devices primarily devoted to trivial pursuits. There is nothing wrong with that, but those are not the transformative or disruptive technologies we are looking for. Weigh each new technology announcement on the scale of transformativeness or disruptiveness.

The ideal disruptive technologies are the ones which help to liberate families and smaller communities from the tyranny of the mob, the tyranny of government. Think of all the things which government claims to provide to individuals, families, and communities -- and then think of ways to provide those things with advanced, new generation technologies. That is the direction we should be heading.

But we will see some difficult times -- some very irrational times -- between now and then. Hope for the best. But prepare for the worst.

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Blogger Matt M said...

3D printers will raise intellectual property issues to an entirely different level.

Plus, coming soon is the ability to produce military spec weapons with a 3D printer. Instead of finding websites telling how to produce explosives from household cleaners - there will be websites with specs to produce websites. I predict that within 2 years you will be able to download specs for Glock-like weapons - requiring only the purchase of a machined barrel for a working model.

Monday, 07 January, 2013  
Anonymous Anonymous said...

Too bad our government is more likely to emphasize that new fangled contraption the electric car than anything useful

Monday, 07 January, 2013  
Blogger neil craig said...

The tallest tree, literally as well as metaphorically, is space development.

It also has an unuaually high inherent barrier to entry - "once you are in Earth orbit you're half way to anmywhere in the solar system - Heinlein.

It is an indi=ustry the US still has a dominant positionn in but it may well fall to a number of small, innovative equatorial states (Singapore, Dubai) since there is no reason why a nation's orbital footprint need bear any relation to its geographic footprint down here.

Thursday, 10 January, 2013  

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