By Marius Croucamp
Solidarity Deputy General Secretary
What if the existing manufacturing and large technological innovation came together to create the next big manufacturing revolution? This is the fourth manufacturing revolution. And it’s happening right now. New technologies are entering the manufacturing space that will boost productivity.
There are implications for all of us when manufacturing finds its way back into the limelight. Our factories will be relocated to our home markets. A giant scale won’t matter anymore. Flexibility does ensure we’re operating on a multi-product basis. The change will be drastic as globalisation enters a new era.
Advanced manufacturing robots are the size of humans and if we collaborate with them, they can be programmed to perform complex non-repetitive tasks. Today, in our factories, only 8% of the tasks are automated. They are the less complex, more repetitive ones. This number will rise to 25% by 2025. Advanced robots will complement workers, which means that together, there will be 20% more production output to achieve additional growth.
This isn’t some fancy futuristic idea. These robots are working for us right now. In the US, they helped Amazon prepare and ship all the products required for Cyber Monday, the annual peak of online retail. Last year in the US, it was the biggest online shopping day of the year in history. Consumers spent billions of dollars on electronics that day – that’s real economic growth.
Then, there is additive manufacturing and 3D printing. 3D printing has already improved plastic manufacturing and is now making its way through the metal. Plastic and metals represent 25% of global manufacturing production. In the aerospace industry, injector nozzles are some of the most complex parts of manufacturing. For one reason, they are made up of 20 different parts that are separately produced and then painstakingly assembled. Aerospace companies are now using 3D printing, which allows them to turn those 20 different parts into just one. The results are 40% more productivity, 40% more output, and 40% more growth for this specific industry.
But the most exciting part of this new manufacturing revolution goes way beyond productivity. It’s about producing better and smarter products. It’s about scale customising the product that will be mass produced. This includes your car, your clothes or your cellphone. The new manufacturing revolution makes this all possible. Advanced robots can be programmed to perform any product configuration without a loss of time as 3D printers instantly produce the customised design. That is the ability to produce a batch of one product – your product – at the same time as a batch of many. Not only will manufacturing become more productive, but it will also become more flexible.
There are implications for all of us when manufacturing finds its way back into the limelight. It will create a huge macroeconomic shift. First, our factories will be relocated to our home markets. In the world of scale customisation, consumer proximity is the new norm when our factories will be smaller. A giant scale won’t matter anymore. Flexibility does ensure we’re operating on a multi-product basis. The change will be drastic as globalisation enters a new era.
The east to west trade flows will be replaced by regional trade flows. The old model of trading is stockpiling stocks that need to travel the whole world before they reach their end consumers. The new model just next to the consumer market will be much cleaner and benefit our environment. In mature economies, manufacturing will be back home, creating more employment, more productivity, and more growth.
Growth does not come automatically. You will have to seize it and will have to massively retrain the workforce. Jobs will be lost, and new jobs will be created that require new skills. We have told our children that manufacturing had no future. That it was something that happened far away. We need to reverse this idea and teach manufacturing again. Only the countries that will totally transform will be able to see this growth, which is also a chance for developing economies.
China and other emerging economies won’t be the factory of the world anymore. It is not a sustainable model in the long term as those countries are becoming richer. It is already as expensive to produce in Brazil to produce in France. Manufacturing costs in China will be on par with the US. The new manufacturing revolution will accelerate the transition of those emerging economies to a model driven by domestic consumption. This is where growth should be created. In the next few years, the next billion consumers in China will inject more growth in our economies than the top five European markets together. The fourth manufacturing revolution is a chance for all of us if we play it right.