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A New Industrial Revolution

May 21, 2012


In the introductory article of a special report on marketing and innovation published in The Economist, the magazine asserts that “digitisation of manufacturing will transform the way goods are made.” [“The third industrial revolution,” 21 April 2012] The article notes that “the first industrial revolution began in Britain in the late 18th century, with the mechanisation of the textile industry. … The second industrial revolution came in the early 20th century, when Henry Ford mastered the moving assembly line and ushered in the age of mass production.” The result of these two revolutions, the article claims, was people became richer and more urban. The so-called third industrial revolution it asserts will be the result of “manufacturing … going digital.” It will be a revolution because it “could change not just business, but much else besides.” The article continues:

“A number of remarkable technologies are converging: clever software, novel materials, more dexterous robots, new processes (notably three-dimensional printing) and a whole range of web-based services. The factory of the past was based on cranking out zillions of identical products: Ford famously said that car-buyers could have any colour they liked, as long as it was black. But the cost of producing much smaller batches of a wider variety, with each product tailored precisely to each customer’s whims, is falling. The factory of the future will focus on mass customisation — and may look more like those weavers’ cottages than Ford’s assembly line.”

The special report touches on a number of subjects that I’ve written on in the past; but, it weaves them together into a compelling story about the future of manufacturing. The focus of the report, however, is on 3D printing and how it could change the world. The article continues:

“The old way of making things involved taking lots of parts and screwing or welding them together. Now a product can be designed on a computer and ‘printed’ on a 3D printer, which creates a solid object by building up successive layers of material. The digital design can be tweaked with a few mouseclicks. The 3D printer can run unattended, and can make many things which are too complex for a traditional factory to handle. In time, these amazing machines may be able to make almost anything, anywhere—from your garage to an African village. The applications of 3D printing are especially mind-boggling. Already, hearing aids and high-tech parts of military jets are being printed in customised shapes. The geography of supply chains will change. An engineer working in the middle of a desert who finds he lacks a certain tool no longer has to have it delivered from the nearest city. He can simply download the design and print it. The days when projects ground to a halt for want of a piece of kit, or when customers complained that they could no longer find spare parts for things they had bought, will one day seem quaint.”

The accompanying article on 3D printing calls it “additive manufacturing” since the process produces products by layering material based on software-driven patterns. [“Layer by layer“] The article explains the many different ways these layers can be formed and different materials that are being used to create finished products:

“The layers can come together in a variety of ways. Some 3D printers use an inkjet process. Objet, an Israeli 3D-printer company, uses the inkjet head to spray an ultra-thin layer of liquid plastic onto a build tray. The layer is cured by exposure to ultraviolet light. The build tray is then lowered fractionally and the next layer added. Another way is fused deposition modelling, a system used by Stratasys, a company based in Minneapolis. This involves melting plastic in an extrusion head to deposit a thin filament of material to build the layers. Other systems use powders as the print medium. The powder can be spread as a thin layer onto the build tray and solidified with a squirt of liquid binder. It can also be melted into the required pattern with a laser in a process called laser sintering, a technology which EOS, a German firm, uses in its additive-manufacturing machines. Arcam, a Swedish company, fuses the powder in its printers with an electron beam operating in a vacuum. And these are only some of the variations. For complicated structures that contain voids and overhangs, gels and other materials are added to provide support, or the space can be left filled with powder that has not been fused. This support material can be washed out or blown away later. The materials that can be printed now range from numerous plastics to metals, ceramics and rubber-like substances. Some machines can combine materials, making an object rigid at one end and soft at the other.”

You have to admit that the variety of processes and materials is impressive. The article concludes by noting, “Food can be printed too. Researchers at Cornell University have already succeeded in printing cupcakes. The ‘killer app’ with food, almost everyone agrees, will be printing chocolate.”


One of the reasons that additive manufacturing is highlighted as the poster child for the Third Industrial Revolution is that it clearly involves much fewer workers on the factory floor than during the past two revolutions. Another article in the special report [“Back to making stuff“] notes, “The ‘Hammering Man’ catches a nostalgia for the kind of manufacturing employment which in the developed world barely exists any more.” Does that mean that “jobs free” or “jobs lite” manufacturing no longer matters to a country? The simple answer is, “No, it matters a lot.” The article explains:

“Factory floors today often seem deserted, whereas the office blocks nearby are full of designers, IT specialists, accountants, logistics experts, marketing staff, customer-relations managers, cooks and cleaners, all of whom in various ways contribute to the factory. And outside the gates many more people are involved in different occupations that help to supply it. The definition of a manufacturing job is becoming increasingly blurred.”

As I’ve noted in other posts, some analysts believe that for every manufacturing job that is created approximately eight additional support jobs (mostly in the supply chain) are also created. That’s what will make this revolution look so different and less industrial. The article continues:

“A lot of the jobs that remain on the factory floor will require a high level of skill. [Yet …] many countries have cut down on training in the economic downturn. To get the people it wants, Rolls-Royce has opened a new Apprentice Academy to double the number of people it can train each year, to 400. In America firms have cut back on training so savagely that ‘apprenticeships may well be dead,’ reckons Suzanne Berger, one of the leaders of a new MIT research project, Production in the Innovation Economy, which is looking at how companies compete. Many firms feel that it is not worth training people if they are likely to leave to work for someone else. Ms Berger and her colleagues think one promising alternative to apprenticeships is a collaboration between community colleges and local firms to develop training programmes. Sometimes the firms donate manufacturing equipment to the colleges.”

In past posts, I’ve stated that public/private partnerships are going to be required because public spending is on the verge of bankruptcy. Fortunately, the article notes that the same digitization that is revolutionizing manufacturing is also making training easier. It explains:

“Companies cannot justify halting production equipment which may be running 24 hours a day so that trainees can play around with it. But computers can simulate production systems in a virtual environment, and products too. At Warwick University in Britain, a room with giant high-resolution screens is used as a virtual-reality chamber to simulate products under development, such as cars, in three dimensions.”

The article goes on to explain how manufacturing is also changing the pharmaceutical sector. If workers can be trained with the right skills, domestic manufacturing in most countries will likely increase. The fact that risks to extended supply chains are increasing makes it both practical and prudent to manufacture products closer to those who will consume them. This new revolution will make that easier to do. That is why another article in the special report notes that “some production is moving back to the rich world.” [“The boomerang effect“] The article reports that “for some manufacturers low wage costs are becoming less important because labor represents only a small part of the overall cost of making and selling their products.” Other manufacturers discovered knock-offs of their products appearing around the globe after they started manufacturing overseas. In other words, a lot of factors must be considered when manufacturing decisions are being made. Low cost labor is no longer the most important consideration.


The next article in the report [“Forging ahead“] discusses one of the truly revolutionary characteristics of the next wave of manufacturing — materials. It reports, “Manufacturers are increasingly working with new, game-changing ingredients.” The article explains, “American and European firms have sought salvation in high-end manufacturing from the onslaught of low-cost producers. That increasingly involves becoming more inventive with materials.” The article goes on to describe a number of the materials (many of them use nanotechnology) that are garnering attention. The final two articles in the report discuss collaborative manufacturing [“All together now“] and automation [“Making the future“].


No single factor discussed in the special report could, by itself, create an industrial revolution. Together, however, in combination with new IT technologies, I would have to agree that the future of manufacturing is likely to look a lot different than it does today. For countries that have lost manufacturing plants to lower-cost countries, this should come as good news. The Third Industrial Revolution gives developed countries a chance to recapture manufacturing (even if it is “jobs lite”). One caveat: recaptured manufacturing will more likely produce products for domestic consumption than for export. If it makes sense to move manufacturing plants closer to consumers in rich countries, it also makes sense to keep manufacturing plants close to consumers in emerging markets.

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