Traditional factories and manufacturing industry may have mostly moved offshore, but as E&T suggests, there are still opportunities for the renewal of the manufacturing sector in post-industrial nations.
Recent decades have seen the emergence in much of the developed world of so-called post-industrial nations. These are nations that are making the transition from having manufacturing-based economies to having service-based economies, and this transition has brought some big economic and social problems. Economic problems include a big balance of payments deficit, and a major social problem is that, while a few people in a service-based economy can get very rich, many more people become poorer.
One possible solution is a renewal of manufacturing in post-industrial nations. However, renewal cannot be achieved by trying to bring back on-shore the industrial manufacturing that has been off-shored. This is because the necessary industrial manufacturing expertise no longer exists back on-shore. Moreover, industrial manufacturing involves centralised production and long-distance transportation, both of which have high environmental costs that are now being regulated against.
Accordingly, post-industrial nations need to innovate in their renewal of manufacturing. This can be achieved by combining manufacturing and services in new ways. One way is to establish design and production services that enable ordinary people to create their own goods. Another way is the production of goods that have micro-electronic functionalities that enable ordinary people to create their own services.
New companies such as Local-Motors and Physical Design Company have shown how the 'Factory 2.0' paradigm can make it possible for ordinary people to create even large goods, such as buildings and cars, for themselves. The Factory 2.0 paradigm is the E F conception, development and production of physical goods - irrespective of location - using emerging Web 2.0 capabilities plus digital tools for design and production. Within Factory 2.0, some complicated mechanical components such as car engines may continue to be manufactured off-shore, but much more manufacture and assembly can be carried out on-shore, close to the point-of-demand.
As more and more countries in the developing world present an online force, Factory 2.0 can enable manufacturing companies to offer design and production services in many emerging markets. For example, one of the world leaders in Web-based applications and in manufacturing-based business, South Korea, is already working in Africa to establish comprehensive mobile broadband Internet connectivity.
In addition, rural innovation initiatives such as SRISTI, and low-cost mobile manufacturing facilities such as FabLab, show that ordinary people in the developing world have more than enough inventiveness and enthusiasm to create a wide variety of new goods. What they are lacking is more and better Web-enabled tools. To enable maximum take-up around the world, these Web-enabled tools need to be as intuitively understandable as possible. This can be achieved by making minimum use of natural language, and maximum use of pictures, symbols, and so on.
Moreover, users should have the opportunity to contribute ongoing development of tools. Apple's developer kits show how a company can profit hugely by enabling users to improve its offerings, while innovative mobile phone use across Africa shows how the ingenuity of people with very few resources can lead to important new applications for technologies that are already established in the developed world. New uses of the mobile phone from Africa include money transfers by people without bank accounts. This means developing countries do not have to develop the resource-intensive branch banking infrastructure used in industrialised countries.
Similarly, Factory 2.0 can enable countries in the developing world to avoid having to invest in the resource-intensive manufacturing infrastructure used in industrial countries, such as physical factory buildings. Rather, much production can be done by bringing one or two manufacturing machines to point-of-demand for the period of time needed. Where there is inadequate power supply, generators and fuel can also be brought to point-of-demand.
It is possible to reduce the needed manufacturing plant to just one or two machines because Factory 2.0 services are specific to particular product types - for example, Local-Motors specialises in specific types of cars. Overall, bringing the ingenuity of more people from the developing world into communities for the development of open source manufacturing equipment, such as RepRap, can only help to drive down their cost and drive up their performance.
Opening up the design and production of goods to ordinary people is a reversal of industrial paradigms such as make-to-stock (MTS) and assemble-to-order (ATO). Within those paradigms, there are high professional and financial barriers against participation. Typically, brand holders have allowed individual customers only to choose from ranges of pre-designed ranges of products (for example, MTS vacuum cleaners) and/or assemblies (say, ATO cars). In other words, individual customers get choice but they do not get authority.
Even with user-centred innovation in MTS and ATO, where individuals can offer ideas for products and/or designs, authority over design and production remains with design and production experts who are employed by brand holders. Individual customers do have more authority within the industrial paradigm of engineer-to-order (ETO), but they have to wait much longer and pay much more for the goods that they want. Thus, there is a fundamental trade-off within industrial manufacturing: authority versus economy.
Within Factory 2.0, by contrast, Web-enabled tools can enable individual customers to have both authority and economy throughout the design and production of goods. Moreover, they can have input into the development of the tools that they use for design and production. Hence, post-industrial manufacturing offers global potential for the wider democratisation, as well as the wider distribution, of goods.
A second opportunity to consider for the renewal of manufacturing is the production of goods that enable people to create services for themselves. An early example of this is Germany's Connected Living Association. Its goal is to integrate individual goods from different manufacturers into solutions which can interact with the user. For example, a digital energy assistant that manages the environmental impact of several appliances at the same time; and a digital kitchen assistant that supports the preparation of healthy, balanced meals.
Unlike Germany, many post-industrial nations no longer have the breadth of manufacturing companies that is needed to develop such combinations of goods and services. Even so, it is possible for companies from several different countries and sectors to form the necessary collaborations via international forums such as the newly formed European Concept group of companies. And within Factory 2.0, some of the manufacturing can be done by ordinary people who collaborate with each other and manufacturers via the Web; forming communities as and when it is beneficial to do so.
Whether the different companies and people involved are from one country or several countries, the principal innovation is a shift from individual manufacturers developing isolated goods and services which meet generic user needs, to manufacturers and ordinary people developing interconnected goods and services that enhance individual users' own particular lifestyles. Importantly, the scope of interconnectivity does not have to be predetermined at the outset. Rather, flexible interconnection of goods and services can be enabled by the so-called 'Internet of things'. That is, networks of goods that are interconnected through Web services and, for example, smart phones.
In order for the Internet of things to function, devices such as radio frequency identification (RFID) tags, sensors and actuators can be combined with goods. Fortunately, direct-write (DW) manufacturing technologies now provide manufacturers with opportunities for offering innovative goods that already include such functionality. DW can deposit functional materials through, for example, inkjets, precisely as defined by digital computer-aided design data. This means that it is no longer necessary to separately manufacture micro-electronic devices, such as sensors and actuators. As a result, materials consumption, transportation, and assembly operations can all be reduced.
As well as increasing the efficiency of producing goods with micro-electronic functionality, DW introduces new opportunities for offering goods which have forms that are unique to individual customers' own particular aesthetic ideas. This is because DW can deposit materials in a wide variety of colours, and in almost any pattern, onto surfaces that are flat, curvilinear, round, flexible, or irregular. As a result, individual customers have the option of clearly visible and aesthetically-pleasing decorations, motifs, logos and signatures included on their goods. This is a new alternative to having micro-electronic devices that are hidden or utilitarian and standardised.
Whether the deposited materials are visible or hidden, the principal innovation compared to traditional industrial practices is that service can now be enabled by the internal functionality of goods, rather than by external human actions. Together with the interconnection of goods from different manufacturers, this opens up opportunities for new types of value-adding services that enhance individual users' own particular lifestyles. At the same time, it reduces the dependency of services on local human resources which may be in short supply.
Consider, for example, GE's QuietCare system, which seeks to transform care of the elderly through the use of advanced motion sensor technology. The system provides care staff with information that helps them to identify potential problems before they become emergencies. However, there is no need for reliance on expensive motion sensor technology. Instead, groups of manufacturers that make goods with integral micro-electronic functionality can offer cheaper and more flexible systems within the Internet of things.
So, for example, doors of goods such as washing machines and fridge-freezers can have integral micro-electronic functionality that sends a signal to a monitoring system when they are motionless for an unusual length of time. Through the application of domain-specific modelling, customers or users could set up their own systems that enhance their own individual lifestyles. In particular, domain-specific modelling can enable everyday words and associated symbols to be used, instead of expert programming languages.
Web 2.0, the second generation of the World Wide Web, enabled the movement away from static Web pages to dynamic, shareable content and social networking. New companies such as Local-Motors and the Physical Design Co. are examples of the similar Factory 2.0 paradigm, which combines Web 2.0 with digital tools for the design and production of physical goods.
Now, the Web is moving towards a third generation that involves more extensive interconnection of data put onto it by separate people. Similarly, Factory 2.0 can move towards the interconnection of goods designed and produced by separate companies and/or people. This can be achieved by extending services to the design and production of goods that have integral micro-electronic functionality; and providing Web-enabled tools for domain-specific modelling. Such services could introduce Factory 3.0, in which diverse manufacturing companies and/or ordinary people can create both goods and services.
It is only through such a fully open approach as Factory 3.0 that post-industrial nations can harness the potential of all their citizens and companies in the development of globally-competitive manufactured goods and value-adding services. Indeed, it is the only way to save post-industrial economies from being overwhelmed by other nations that have ever increasing industrial resources. For example, China - which already has a variety of rapid manufacturing technology companies such as Beijing Longyuan and Wuhan Binhu - and India will continue to move up the industrial value chain into developing and manufacturing shorter series and more specialised products using advanced technologies.
Overall, there needs to be a recognition that the post-industrial factory is not a physical building with a fixed location that is a cleaner, quieter, and more automated version of the industrial factory. Rather, the post-industrial factory is an ever expanding web of ordinary people and providers of digital tools, materials and machines, which together make up an infinite number of latent networks. These latent networks become actual networks through the creation and interconnection of goods that enable better services.
Although some goods and services will continue to be provided by conventional companies using traditional practices, it is likely that these will be either low-value or high-value. At the low-value end are, for example, make-to-stock production of fast moving consumer goods, and repairs to old consumer goods under guarantee. At the high-value end are, for example, engineer-to-order production of cruise liners, and the periodic refurbishment of cruise liners. By contrast, post-industrial manufacturing innovations, such as Factory 3.0, can offer many new opportunities for on-shore creation of the middle-value goods and services which are essential to the prosperity of nations.
Dr Stephen Fox is a senior research scientist at VTT, the Technical Research Centre of Finland