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Home Opinion The future of manufacturing
Manufacturing • Economy • Localism

The future of manufacturing

Julie Madigan - 15 May 2014

If economies are to capitalise on the innate innovative potential of their populations then we will need policies to encourage a movement towards boutique local manufacturing

For manufacturing in the 21st Century there are significant changes in both the global economy and the technological landscape that will dramatically shape the near future. A movement towards boutique local manufacturing is already underway, its emergence accelerated by a number of key trends that are now converging.

1.    Patterns of consumption are changing
The global economic trends that are reflected in the ongoing banking crisis, the scale of sovereign debt, an ageing population of baby boomers, the cost of healthcare and the implications of high levels of long term unemployment – especially for the youth in many of the developed nations. These dynamics are creating a set of serious questions on the current models of consumption and employment and this will impact those who manufacture goods and deliver services.

2.    Resource scarcity and concerns around environmental sustainability
Increasing input and landing costs have significant implications for today’s complex, and often lengthy, global supply chains putting pressure on resources. There is also mounting concerns around environmental sustainability. Here, the “Circular Economy” model offers an alternative value proposition by re-aligning today’s business models from current linear economic thinking around mass production, throughput and efficiency, to one where raw material conversion, creative product designs and manufacturing and full lifecycle management are fully optimised.

3.    The “democratisation” of design and manufacture
Open innovation trends fuelled by open source design and software coupled with cost reductions in machinery and the emergence of global networks sharing know-how and innovation capability will lower the barriers to entry to manufacturing. It is this that is being referred to as the next industrial revolution. A new multi-local digital maker culture is the forerunner of this and is already underway.

4.    The digital revolution continues apace
This is reflected in the products and services that continue to appear in our everyday lives.  This digitally enabled environment will continue to progress under the headings of internet based services, smarter, cheaper devices and applications through to the growing impact of AI and robotics. The next phases of growth in the digital arena will have far reaching effects on the white collar, professionally based service industries within the next few decades.

We can also now see the growth of the digital revolution into processes that connect the virtual to the physical world. Typically these have evolved in the last two decades from stand alone developments in computer aided design (“CAD”) to machine controlled code for manufacture - computer aided manufacture (“CAM”). These have been applied to subtractive manufacturing processes through numerically controlled machining and, more recently, additive layer manufacturing. These technologies are now being simplified, with closer integration with resulting lower costs and ease of use.  Machines are now being developed with the capability to manufacture on location through to factories on the desk for the consumer and smaller enterprises. Computer simulation, coupled with 3D technology, is also enabling researchers to bio-mimic material structural applications evolved by nature over billions of years.

5.    With digital fabrication a new branch of industrial design is emerging
By resolving the issue of how complex configurations can be made from simple repeatable structures that can be joined or un-joined innovative structural architectures such as those geodetic structures engineered by Barnes Wallis seventy years ago can be digitally enabled in a more efficient and cost effective manner. And soon, the game changer of digital materials will arrive- materials that can configure themselves into specified 3D shapes in much the same way as a string of amino acids can create a complex and highly specific protein structure in nature.

6. The rise of a new generation of local manufacturers
The changes outlined will result in a new generation of local manufacturers. Many of these will be new entrants to manufacturing.  The vision is one of a highly innovative, dynamic and granular manufacturing economy in addition to the traditional scale manufacturing economy we see today. This model should fit well with the innate cultures and infrastructures of developed economies. These trends raise many challenges for governments however and requires a new agenda:

7. A Government agenda to support boutique manufacturing
Skills: At a UK level, the need for an economy more balanced towards manufactured goods is well documented. A recent UK Government Foresight Report reported a need for a further 800,000 people to enter the manufacturing sector to simply maintain the current contribution of manufacturing to GDP to 2020. The apparent skills shortage and lack of entrants to the manufacturing sector is happening at a time when the sector is due to boom.

Finance.  There is still a risk aversion from investors to manufacturing and hardware companies as  higher levels of capital investment are required together with knowledge of manufacturing  processes to succeed. The ability of existing manufacturers to act quickly is therefore constrained. We need new institutions, vehicles and processes based on a stronger understanding of these technologies and the commercial opportunities they represent.

Capital investment. The gap in technical knowledge and insight combined with the aversion to longer term investment in both new hardware businesses and capital equipment constitutes a threat to the ability to exploit this new arena. It is particularly important that smaller and medium sized manufacturing companies are supported here. Whilst many of these have the agility and critical mass to embrace these new areas as documented by recent research, the ability to invest in technology that is not market-ready but just over the horizon is very limited for many smaller firms. In this fast moving space technology know-how will be at a premium.

Applied research will be and is critical as is access to new machinery in flexible new models, not in traditional institutions.

Agile Government and Adaptable Policy: As this market place develops apace it is characterised already by speed. We have seen millionaires created in less than six months using community digital fabrication laboratories in the UK. The idea, prototype and funds can be achieved quickly. If economies are to capitalise on the innate innovative potential of their populations then local manufacturers need to be created alongside. As this movement is very much multi-local a more grass roots, scientific and experimental approach to intervention and policy development is needed.

Julie Madigan is CEO of the Manufacturing Institute, the UK’s longest established charity focused on the manufacturing sector and its development.

This is a contribution to the “Making Progressive Politics Work” publication ‒ ideas and policy proposals from 40 leading international experts.

This is a contribution to Policy Network's work on Progressive Capitalism.

Tags: Julie Madigan , Opinion , Progressive Governance Conference , Progressive Governance , Growth , Social stability , Living standards , Policy Network , Global Progress , Competitiveness , Growth , Solidarity , Globalisation , Centre-left , Centre-left , Europe , EU , European Union , Eurozone , Southern Europe , Northern Europe , Production , Productivity , Growth , Wages , Investment , Jobs , Globalisation , Equality , Pre-distribution

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