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Industryweek 13429 Google Car

Apocalypse Soon

June 3, 2015
Cue R.E.M. – "It's the end of the world as we know it."

Let's take a minute to think about the future of manufacturing. For those of you concerned about this industry being dull, I have one request: Fasten your seat belt.

We'll start with Zack Kanter on the Quartz website. In his article, "Autonomous Cars Will Destroy Millions of Jobs and Reshape the US Economy by 2025," well, you get the picture already. Kanter thinks the transition to driverless cars is coming much faster than commonly predicted and that it promises enormous changes for manufacturing. Ride share will become ubiquitous, dramatically lowering the number of cars on the road, Kanter postulates, with the result that "it is unlikely that major automakers like General Motors, Ford and Toyota will survive the leap." Most major automakers, he writes, will be bankrupt by 2030.

In his article, Kanter forecasts the demise of car insurance, automotive finance, parking and automotive aftermarket industries. What he doesn't mention is that if General Motors or Ford goes, so do the thousands of suppliers that feed these companies. I shudder to think what that will do to the "industrial commons" in the United States. Those companies can't all make medical instruments (unless we make it mandatory that Baby Boomers replace every joint in their bodies).

Kanter cites a Morgan Stanley estimate that autonomous cars could contribute $1.3 trillion in annual savings to the U.S. economy and $5.6 trillion globally. Those savings include huge gains in productivity (no sitting in traffic, etc.) and a drastic reduction in gasoline consumed. That may be small comfort to those displaced workers in the automotive supply chain.

Adoption of autonomous vehicles will make it "unlikely that major automakers like General Motors, Ford and Toyota will survive the leap.

— Zack Kanter

We're not done yet. In his new book, Rise of the Robots: Technology and the Threat of a Jobless Future, Martin Ford writes that we've only seen the very tip of job displacement caused by robots.

"It is an era that will be defined by a fundamental shift in the relationship between workers and machines," Ford states. "That shift will ultimately challenge one of our most basic assumptions about technology: that machines are tools that increase the productivity of workers. Instead, machines themselves are turning into workers, and the line between the capability of labor and capital is blurring as never before."

In an interview with National Public Radio, Ford said technological advances in areas such as machine vision and falling prices are moving robots from their traditional niches to a much broader range of jobs. The result will be that "factories are just going to relentlessly approach full automation where there really aren't going to be many people at all."

Okay, so the big auto companies are gone and factories are full of robots. What else? Well, last year in the Harvard Business Review, Ed Bernstein, president of Industrial Research Institute, and Ted Farrington shared one scenario for manufacturing's future prompted by 3-D printing. In this scenario, they wrote, "traditional manufacturing collapses under the strain placed on it by 3-D printing and heightened speed-to-market practices and is largely replaced by local manufacturing networks."

Bernstein explains that much of low-end manufacturing will consist of "beta tests" of goods produced quickly with 3-D printing. If the tests are successful, the products go into larger-scale production.

For higher-end goods, they speculate, products will be judged not only on their cost or effectiveness but also their social value. Small manufacturers will team up with R&D organizations to produce these goods.

"Much of traditional large-scale manufacturing may cease to exist," they write.

The current era reflects a state of "technological revolution," observed Klaus Schwab, executive chairman of the World Economic Forum, in a recent post. Change is extremely fast, interconnected and disruptive.

"We often hear people talk about the concept of 'uberization,' where a new technology completely turns an industry on its head and forces us to rethink the way things have always been done. No industry will remain untouched by these forces," Schwab writes.

Both Kanter and Schwab are optimistic about this technological revolution. The transformation we are undergoing will "create entire new industries that we cannot even imagine," Kanter asserts. I hope it also brings a cure for my head spinning at the thought of this brave new world.

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