"Detroit, we have a problem. The rampant growth the global economy has been experiencing is fading away,” warned Alastair Orchard, vice president, Digital Enterprise, Siemens. “The global economy is growing at the same rate it was in the Dark Ages, the 1300s. For the first time in centuries, we have to tell our children they may not have a better life than their parents.” Orchard was one of several presenters who spoke at the Manufacturing in America Summit, sponsored by Siemens and Electro-Matic, which more than 2,000 people attended at General Motors’ Renaissance Center in Detroit.
Historically, growth has always been driven by revolutions in manufacturing. First it was by steam. Second was by electricity, and the third industrial revolution was by automated mass production. “Each represented a huge leap forward,” said Orchard. “If you want to grow, you have to produce more. We’ve sent manufacturing off-shore, chasing low-cost labor from country to country. Low-cost labor eventually becomes high-cost labor.” Orchard explained how industry has focused on relocating manufacturing facilities to emerging countries with lower costs of living. Over time, wages rise in those countries, and corporations have to move operations again to find lower-cost labor.
The digital enterprise is about proximity to consumers, no longer off-shoring or building mega factories, said Orchard.
“We’ve been producing things the same way for 50 years, so now we’ve turned to the tech sector,” said Orchard. “We’ve failed to increase productivity because we haven’t reinvented manufacturing. Now, the same Moore’s Law that’s put a computer in your child’s Xbox has changed manufacturing. The cost of key technologies has been dropping. Speed has improved, cost has dropped, and production has increased.” Continue reading article