Book tour in China

I visited China for eight days for an invited book tour.  The book, titled Fabricated:  the new world of 3D printing, was translated into Chinese a few months ago.  Our publisher hadn’t told us any more than that, so when my co-author, Hod Lipson, and I got off the plane in Bejing’s airport after a tedious 13-hour flight from Detroit, we were surprised to be met with two bouquets of flowers and warm greetings by several staff members from CITIC Press, the Chinese publisher of our book.  CITIC Press staff escorted us to an airport bookstore where the book was featured in a window display.  We were delighted to learn that the Chinese translation of Fabricated has been one of the top-selling business and economics books for several weeks in China. 

chinese-version

CITIC Press staff were young — most of them appeared under 30 — and their enthusiasm was contagious.  They seated us in the back of the bookstore in two, side-by-side throne like wooden chairs and we signed several copies of the book for them and took photos.  One of my co-author’s former graduate students, Shuguang Li, (now a postdoc at one of China’s top technical universities — Northwestern Polytechnical University) was kind enough to guide us around throughout our visit, translating and patiently answering our endless questions about Chinese culture, the state of affairs around 3D printing and the economy.

An industrial planet

Since this was my first visit to China, I found myself struggling to find words to describe my awe.  China resists simple description.  Nor is there a whole lot to say about China that hasn’t already been said.

Books, movies and graduate dissertations describe the ancient scholarly and artistic traditions of Chinese culture, rural village life, and the country’s dark decades of Communism.  Economists have detailed the Chinese government’s determination to rapidly modernize China in the 1970s by creating a series of ambitious five-year plans.  China’s exquisite cuisine, rich with regional variations, has been interpreted and re-interpreted by thousands of cookbooks and restaurants.

My first impression of Beijing was that I had wandered onto the set of one of those stiff 1970’s science fiction movies.  If there were a storyline, it would be that I fell out of a spaceship during a routine commuter flight and landed on an unfamiliar industrial planet.  On the drive from the airport to the hotel, cars suddenly loomed out of greyish-green fog and miles of tall, identical apartment buildings dotted the highway.  Construction cranes bent their necks while crews of hard-hatted workers built yet more towering buildings.  Neon signs covered the sides of buildings.

The summer night air in Beijing has an oily sheen.  The night air hung low and moist, clinging to the city’s network of six-lane highways, shrouding densely populated miles of massive apartment buildings, shopping malls and hotels.  Beijing was as humid and hot as Southern Georgia during a mid-summer heat wave.  In the daytime, summer heat baked the sweltering air into a grey-yellow haze.

logistics-firmBeijing’s heavy smog is made up of a blend of factory emissions from nearby industrial regions where many factories are located, heating coal, and heavy trucks that deliver goods at night.  Private vehicles and taxis are another source of air pollution.  I was told that about one in six Beijing residents now own a car and the city’s slow-moving waves of idling cars stuck traffic jams add to the smog problem.

Near what could be called downtown Beijing (though the city is so large and sprawling that like L.A., there is no “there there”), our guide pointed out IBM’s China Regional Sales Office, an office building whose top stories curved and curled skywards behind IBM’s distinctive blue logo.  From the cab window, the 2008 Olympic Stadium, called “The Nest” by locals floated above a shroud of smog.  On the streets, people swarmed everywhere.  Mobs of pedestrians ran hastily to cross the street.  Speeding buses narrowly missed scooters and bicycles, some with mothers pedaling small children and grocery bags.

My hotel room was a temple of home technology.  Back lit wall panels had buttons to control the lights and to open and close the curtains.  These buttons operated using a complicated series of toggling that I was never able to figure out.  The result was that at night, when trying to turn on the bathroom light, the rococo overhead chandelier would come on, flooding the room with blinding light.  One or two nights I gave up and slept in a humid heat box since each time I turned on the air conditioning, the curtains would open.

Shopping

In Chinese cities, shopping is a national passion.  Malls the size of an entire city block teemed with shoppers and shelves of mass-produced merchandise disappeared into shopping carts.  In stores and on people’s bodies, familiar brands appeared everywhere.  Clothing, luggage, cars and consumer electronics boasted the same brand names that we’re familiar with in the west — Adidas, Samsonite, Apple.  It makes sense since after all, since nearly every product we buy was mass-produced in China.

shopping-mallI prowled around an appliance outlet store and was surprised to learn that commonly used home appliances such as washers and vacuum cleaners cost about the same amount as they do in the U.S.  Some unfamiliar brands sat on the shelves of China’s ever-present store shelves.  Even products with unfamiliar brand names, however, looked strikingly similar to their name-branded Western counterparts.  Men’s sports shirts proudly bore brand names like “Notting Hill” and “Romano.”  Women’s handbags were stamped with faux-designer names like “Christian Deno” and “La Chaelle.”  In tourist markets, gorgeous counterfeit wallets and handbags looked identical to the real thing and cost less than 10% of a real Hermes or Gucci.

Conference on 3D Printing

3D printing is a hot topic in China.  The buzzword on everyone’s lips all week was “new industrial revolution.”  During the book tour, my co-author and I were invited to speak at one of China’s first 3D printing conferences, Forum on Additive Manufacturing in Beijing.

The conference hall was a majestic old convention center reminiscent of Soviet municipal buildings of the same era.  Russian-style painting decorated the ceilings and rows of palatial pillars were wrapped in shiny gold cloth.  Outside, a circular fountain sprayed cooling droplets of water to ease the scorching heat that hovered over the central concrete plaza.

The 3D Printing Forum was sponsored by four of China’s ministries and organized by the China Center for Information Industry Development (CCID) and the Chinese Mechanical Engineering Society (CMES).  Forum speakers included professors from Chinese universities conducting leading research on 3D printing and Scott Crump, inventor of one of the most widely used 3D printing technologies — FDM — and the CEO of Stratasys.  We heard presentations from the executives from several Chinese companies.  After lunch, four Ministers spoke about the challenges that belie the Chinese economy.

Speakers at the conference did not sugarcoat China’s economic challenges.  Chinese officials and experts openly and clearly described the challenges of a rapidly advancing modern economy that are nibbling away at China’s ability to offer cheap production:  salaries are rising, carbon taxes are costly and citizens are increasingly worried about industrial pollution.  The cost of making things in China is rising, which is a good thing in the sense that standards of living have skyrocketed in the past few decades.

However, a powerful and successful modern economy also has its downsides.  In a sense, China is a victim of its own success.  Food and consumer products cost more each year due to a long supply chain made up of increasingly well-paid workers.  This wasn’t mentioned in the conference, but housing prices in the larger Chinese cities are higher per square meter of space than in New York or San Francisco.

metal-printedWhat many people in the West don’t realize, I think, is that China is home to a huge population of people who embrace innovative technology and are eager to find new, economically productive ways to apply it.  All week several journalists and students peppered us with creative and thought provoking questions.  One of my favorites:  “if someday we have the ability to 3D print an exact copy of a  living human being, will the brain and personality of that new 3D printed person be identical to the brain of the original person?”

On the academic front, university researchers are moving forward rapidly in 3D printing metal for the aeronautics industry.  For example, in the picture to the right is a ten-foot long titanium 3D printed airplane part created by Professor Huang Weidong at Northwestern Polytechnical University (NPU).  To print such a large part, Huang and his team also designed a 20-foot tall 3D printer.

China is an energetic economy in transition facing some of the same challenges that have already left their imprint on the U.S. manufacturing sector.  In China, the manufacturing sector accounts for about a third of the country’s GDP (half of the U.S.).  In the coming years, like the U.S., factory automation will eventually displace millions of low-skilled factory workers.  Again similar to the U.S., the future of China’s economy lies in creating new and innovative new business models and inventing breakthrough technologies that will provide decent jobs.

Preaching the gospel of Entrepreneurship

Entrepreneurship is the new economic gospel, offering its disciples the promise of redemption in the form of freedom from the dull, plodding and ultimately meaningless work that characterizes an old-fashioned “9 to 5.”  Don’t get me wrong.  Few would disagree with the notion that a life spent as a wage slave to a dead-end job in a large corporation is a wasted life, or at least, a slow, painful endurance contest to retirement.  I, myself, loathe the cynical “bare minimum” attitude of employees and executives who populate bureaucracies, both from the perspective of a customer and as a former employee.

So what’s the problem with celebrating entrepreneurship?  People who cling to a vision and end up running a profitable and successful business are awesome.  Like watching elite athletes compete, when I meet successful entrepreneurs who have spun straw into gold, I feel humble and honest appreciation of the hard work, focus and self-sacrifice that went into making the impossible look effortless.  Earning money by selling a solution to a customer problem with honest hard work and ingenuity is the foundation of a satisfying and well-lived life.

Here’s the problem with entrepreneurship as the new economic gospel:  it’s a risky path to economic redemption, one that most of its disciples will fail to complete.  We celebrate the notion of entrepreneurship without acknowledging that successful entrepreneurs are as gifted, lucky and rare as winning Olympic athletes.  The gospel of entrepreneurship sells the dream that all of us are capable of carving out our own prosperous path as long as we’re tenacious enough.  The gospel of entrepreneurship, when swallowed whole, would have you believe that we’re entering a brave new post Fortune 500 era, that economic salvation is available to those who embrace entrepreneurship.

By uncritically embracing entrepreneurship as the foundation for our future economy, we are preaching and believing a fairy tale.  A growing number of Americans are living below the poverty line ($30,000 a year for a family of four).  Roughly half of Americans have nothing.  Literally.  Their debts exceed their assets.

As I attend conferences, workshops and events about entrepreneurship, despite my appreciation for people who succeed in building a new business, I find myself wrestling with an uncomfortable thought:  what if the gospel of entrepreneurship is merely a cloak to hide the painful, deeply disturbing fact that secure, good old-fashioned 9 to 5 jobs — drudgery as they may be — are rapidly become a thing of the past?

I once had a boss who taught me that if there’s a significant problem in your organization, never gloss it over when communicating with upper management.  Otherwise it’s like smoothing wallpaper over a gaping hole in the wall:  the same problem is going to continue to dog you later on or perhaps get even worse.  My former boss’s wise advice was that you should tell your management about the gaping hole, square on, and then explain how your team is going to exceed its goals anyway.  The new gospel of entrepreneurship is not real economic strategy for the majority of the population.  Blind worship of entrepreneurship is rhetorical wallpaper that covers an ugly, gaping hole in our economy that’s going to impact all of us eventually, whether we acknowledge it or not.

Uncritical celebration of the economic gospel of entrepreneurship wallpapers over the fact that a significant number of people would not be able to support themselves and their family by launching their own ventures, even if they wanted to adopt the hard-driving, mono-focused so-called “entrepreneurial lifestyle.”  Despite the lucky and gifted few people who will create wonderful lives and fortunes for themselves, their families and communities, a large chunk of the population would be better economically served with a steady, boring decently paid day job, complete with long term security, a pension plan and no work on nights and weekends.  In fact, my hunch is that many hard-working people would actually prefer such a straightforward 9 to 5 gig with a regular paycheck.

In a brilliant article in the Entrepreneurship Review, C.Z. Nnaemeka writes of the way that the gospel of entrepreneurship has failed the “unexotic underclass.”  The unexotic underclass fly under the radar of most aid programs and most certainly aren’t part of our nation’s passionate embrace of entrepreneurship as a new cultural identity.  Who makes up this unexotic underclass?  Millions and millions of people.

According to Nnaemeka, the unexotic underclass is made up of “single mothers, 80% of whom, according to the US Census,  are poor or hovering on the nasty edges of working poverty.”  Two, combat veterans who upon returning from the frontlines, “have to wait roughly 270 days (up to 600 in New York and California) to receive the help — medical, moral, financial – which they urgently need.”  The unexotic underclass includes the “huddles of Whites – poor, rural working class – living in the American South, in the Midwest, in Appalachia.”     The list goes on.  A growing number of people over 50 are falling below the poverty line.  Ex-convicts locked up for petty drug crimes are rendered untouchable, hence unemployable, by their felon status.

Selling economic redemption through the gospel of entrepreneurship ignores the needs and circumstances of the majority of people not fortunate to survive the risks of starting a new business.  Think about what it takes to become a successful entrepreneur.  This is not to say it’s impossible.  However, how many people who struggle day-to-day in the unexotic underclass could survive the following?

  • Delayed profitability.  The lag in time to profitability means living off savings or a spouse’s income.  For people who are single mothers or the primary breadwinner, don’t have affluent and generous parents, or can’t borrow sums from family and friends, working more than full-time for a few years without a steady salary is not an option.
  • High risk and uncertain future.  Most small businesses fail within the first years.  That’s fine if you’re young, single and affluent.  The gospel of entrepreneurship presents tenacity as a defining personality characteristic of successful entrepreneurs.  However, bulldog tenacity doesn’t pay the rent, nor food and medical bills.
  • Many years of long workweeks, nights, holidays and weekends.   In particular, women in the unexotic underclass take care of children and their elders.   How about people who have health problems that have already rendered them unemployable?  And heck, I’ll just say it.  What about the people who would simply prefer to contain their job inside of a fair 40 hour work week and don’t want to make their business their life?
  • Technical and communication skills.  To build a business that reaps the economic benefits of new technologies, first you have to become an expert user of these new technologies.  A new report from the U.S. Department of Education found that in 2011, nearly one in five public schools were high-poverty, a whopping 60 percent increase since 2000. (A school is designated as high-poverty when 75 percent or more of students qualify for free or subsidized lunch).  If kids aren’t getting fed at home, it’s likely they’re probably not learning how to build a web site or write code or crisp and compelling prose.

The fact that a self-starting individual can create income with minimal upfront investment is a laudable byproduct of our new economy.  In fact, it’s a beautiful thing that it has become possible for an individual entrepreneur to launch a small business from nearly nothing.  Bloated gatekeeping corporations of yore are collapsing under their own rotting weight, felled by gifted and energetic entrepreneurs embracing low-cost tools of communication and production.  Long live self-publishing, ecommerce, cheap laptops and the meritocracy of the ultimate blank page:  a web site.

New technologies have leveled the playing field, breaking the nasty centralized grip of mass production, mass media and centralized banking.  Sites like Kickstarter, the success of microloans and a growing online marketplace for custom goods and services have allowed once-marginalized people to soar, both financially and creatively.  In addition, many successful entrepreneurs generously donate money and time to make the world a better place.  A growing social entrepreneurship movement aims to blend humanitarian goals with a business or service that generates an income stream.

Despite these bright spots, the hard truth, however, is that by ignoring the plight of half of our nation’s population, the gospel of entrepreneurship wallpapers over a gaping and ugly hole in the wall.  While at least in theory, anyone with an internet connection and a laptop has the tools they need to run their own media corporation, the reality is that only a gifted few will likely be able to make a stable income from that.  By embracing the gospel and becoming a nation of self-made entrepreneurs, we will not solve the Problem of the 99%:  the alarming fact that in the U.S., the once-financially secure are becoming poor, and the already-vulnerable poor are becoming alarmingly poor.

Let’s celebrate entrepreneurship and the remarkable world champions of business, some who have transcended adverse beginnings and have successfully pulled themselves up by their own bootstraps.   But swallowing whole the gospel of entrepreneurship as a panacea for the rapid erosion of decently paid stable jobs and social programs for the poor is mere wallpaper, not a real solution.  Selling entrepreneurship as the panacea for a shrinking middle class and growing underclass of “will never haves” is unrealistic at best and irresponsible at worst.

Industrial revolution? Maybe

I spoke at the Oak Ridge National Labs about 3D printing and industrial revolution.  Here’s what I said.

The first industrial revolution took root about 200 years ago in England. Steam powered machines were used to pump water out of underground coal mines, dramatically increasing coal mining productivity.  Cheap and abundant coal then made it profitable to run large machines in textile factories.  After a few decades, the manufacture of textiles shifted from cottage industry into factories owned by corporations.

Depending on who you ask, the second industrial revolution was either the wide scale implementation of mass production based on the assembly line in the early 20th century, most notably by the Ford company.   Or, the second industrial revolution was the convergence and rapid improvement of computing and communications technologies beginning in the 1950s that’s still going strong today.

Many people believe that we’re in the early days of a third industrial revolution, one triggered by low-cost design and manufacturing tools and a growing Maker movement.  Here’s how the theory goes.   In the next industrial revolution, manufacturing will come full circle, evolving away from centralized, factory-dominated mass production back to a new era of digital cottage industries.

Some people believe that this looming third industrial revolution will democratize the production and distribution of physical goods.  Manufacturing hubs of small businesses will supply larger companies with inventory which will be stored in digital form as a design file.  3D printed parts and products will be produced just-in-time, locally, shortening global supply chains.  Low-cost customization will spark a newly revitalized economy and the creation of new jobs.

Maybe.  But would such a new manufacturing paradigm really constitute a full-blown industrial revolution?  Part of the challenge in answering this question lies in the use of the phrase “industrial revolution.”

How is the phrase “industrial revolution” defined?  The phrase is defined by the Business Dictionary as “An era of unprecedented technological and economic development that began during 1830s in UK and spread in varying degrees to the rest of Europe, US, and Japan. It replaced the animal and human power by mechanical power and transformed agriculture based economies to manufacturing based ones.”  The Cambridge Business English Dictionary takes a broader view and defines an industrial revolution as “any period of time during which there is a lot of growth in industry or in a particular industry.”

An industrial revolution is a transition, a cultural and economic sea change that’s triggered by a convergence of new technology, social forces, and available natural resources.  Which forces trigger an industrial revolution also depend on who you ask – innovative technologies, social factors, natural resources or a blend of all three.  During the 18th and 19th centuries, some contributing factors were the development of the steam engine, rapid population growth, cheap steel, abundant coal and hydropower.  If you imagine the development of 3D printing technologies in the context of either of these two definitions, then it would seem that reports of a third industrial revolution may be greatly exaggerated.

Maybe we’re not at the brink of a third industrial revolution.  But we are at the brink of a technological leap forward.  This may sound like splitting hairs, but the phrase “industrial revolution” is actually not that useful in a practical context.  In fact, many scholars believe that the phrase is simply a shortcut, a misleading buzz word that oversimplifies the complicated feedback loops that take place when new technologies come together and very gradually accelerate social and economic change.

Here’s the environment in which 3D printing technologies are gaining traction.  These converging forces – a blend of technology and economic factors — are creating a cascade of downstream innovation that’s accelerating in speed.

These converging forces are creating a cascade of downstream innovation that’s accelerating in speed.

  • Massive increases in low-cost computing power
  • Rapidly improving, low-cost design software
  • Hardware components shrinking in size, growing in power and dropping in cost
  • Key additive manufacturing patents are finally expiring
  • High speed internet is everywhere and used for everything
  • Companies are hungry to compress their product design life cycles as they compete in fast-paced global markets
  • Designers are creating increasingly complex products  they demand that they iterate faster, in the privacy of their own design studios (no leaked blueprints)

In this environment of converging forces, 3D printing technologies are feeding a technological leap forward that in turn, feeds and is being fed by a number of converging forces.  The stage has been set for decades.  Significant, noticeable change will take yet decades more.  You could call this convergence of forces an industrial revolution.  Or, not.   For now, I’ll use the phrase “technological leap forward.”

3D printing will bring about significant change in the way we design and produce physical objects.   Here’s why.

Technological leaps forward happen when a significant cost factor drops to nearly zero.  In the first industrial revolution, the cost of power per watt dropped significantly when steam engines replaced horses and water wheels.  More recently, the cost of calculations per second has dropped significantly as computer components have become smaller, faster and cheaper to produce.  There are many more examples of a cost factor dropping significantly, triggering a cascade of downstream innovation and new business models.

3D printing drops several cost factors to nearly zero.   In the book Fabricated, when we interviewed people and thought about 3D printing, we kept coming across some recurring themes, ways in which 3D printing disrupted traditional paradigms of mass manufacturing.   We distilled these recurring core ideas into ten principles of 3D printing.

Each principle describes what makes 3D printing technology unique.  Each principle also demonstrates the removal of a significant cost element that’s associated with traditional mass manufacturing.  Some of these principles hold true today; others will need more time to really develop.

Principle one:  Manufacturing complex shapes costs as much as manufacturing a simple shape.   In traditional manufacturing, the more complicated an object’s shape, the more it costs to make

Principle two:  Variety is free. A single 3D printer can make many shapes. Like a human artisan, a 3D printer can fabricate a different shape each time. In contrast, traditional manufacturing machines are much less versatile and can only make things in a limited spectrum of shapes.

Principle three:  No assembly required. 3D printing can form objects that contain already interlocked parts. The more parts a product contains, the longer it takes to assemble and the more expensive it becomes to make.

Principle four:   Zero lead time. A 3D printer can print on demand, when an object is needed. The capacity for on-the-spot manufacturing reduces the need for companies to stockpile physical inventory. New types of business services become possible as 3D printers enable a business to make specialty–or custom–objects on demand in response to customer orders. .

Principle five:   Unlimited design space. Traditional manufacturing technologies and human artisans can make only a finite repertoire of shapes. A 3D printer removes these barriers and can fabricate shapes that until now have been possible only in nature, opening up vast new design spaces.

Principle six:  Zero skill manufacturing. Traditional manufacturing machines still demand that a skilled expert to adjust and calibrate them. A 3D printer gets most of its guidance from a design file. Unskilled manufacturing opens up new business models and could offer new modes of production for people in remote environments or extreme circumstances.

Principle seven:  Compact, portable manufacturing. Per volume of production space, a 3D printer has more manufacturing capacity than a traditional manufacturing machine. For example, an injection molding machine can only make objects significantly smaller than itself. In contrast, a 3D printer can fabricate objects as large or larger than itself.

Principle eight:  Less waste by-product. 3D printing in metal creates less waste by-product than the traditional grinding or molding techniques used in mass manufacturing.  Machining metal is highly wasteful as an estimated 90 percent of the original metal gets ground off and ends up on the factory floor.

Principle nine:  Infinite shades of materials. Combining different raw materials into a single product is difficult using today’s manufacturing machines. As multi-material 3D printing develops, we will gain the capacity to blend and mix different raw materials. New previously inaccessible blends of raw material offer us a much larger, mostly unexplored palette of materials that have novel properties or useful types of behaviors.

Principle ten:   Precise physical replication. A digital music file can be endlessly copied with no loss of audio quality. In the future, 3D printing will extend this digital precision and repeatability to the world of physical objects.

Today, we’re in the dawn of 3D printing technology.  The development and improvement of  3D printing and related technologies will continue to accelerate.  As significant manufacturing costs are reduced to nearly zero, in the coming years,  we may witness a third industrial revolution.

Innovative technology, jobs and the razor’s edge

According to the Wall Street Journal, the unemployment rate in the U.S. is nearly 8%.  For people under age 25 unemployment is 16%.  In Greece, the employment rate is 26%, double for young adults at 58%;  Spain and Italy have similar unemployment challenges.

What is making jobs in economically developed nations disappear?  Could it be the effect of offshored manufacturing?  Frugal consumer behavior that’s shrinking company bottom lines, hence triggering layoffs?  Or…  the unintended side effects of advanced technology?

The answer is all three.  But let’s look at the unintended side effects of advanced technology.

Technology is a double-edged sword.  One the one hand, technologies that are more efficient than humans improve the quality of human life.  On the other hand, these same technologies destroy jobs.  New technologies improve food production and health care, liberate creative people from the shackles of the middle man,  and increase social mobility.  Yet, as technological advancement accelerates, software programs, machines and robots are becoming better employees than we humans.

We walk a razor’s edge.

Technological innovation is frequently offered as a panacea for what’s wrong with our faltering economy.  It’s a pretty widely accepted notion, at least in mainstream circles in the western world, that technological innovation increases economic growth, which in turn introduces high paying jobs, new industries, and new efficiencies that in turn, begat new industries and high paying jobs.  Here’s a typical belief expressed in a white paper on patent reform written by the U.S. Department of Commerce.  Note the Department’s unblinking certainty, that technological innovation is the pulse of a healthy economy.

“All major strands of economic thought now recognize that technological change is the primary driver of growth.   In fact, modern economic theory holds that without technological innovation, accumulation of wealth could not be sustained and per capita growth would trend to zero.”[1]

When new technologies replace human workers, economists call the demise of industries and resulting job-loss “creative destruction,” a term that hints at an underlying belief, that in the long term, innovative technology has a regenerative effect.  Economists point out that although Expedia, the internet and airline databases made travel agents obsolete, these new technologies kicked off a cycle of creative destruction.  In exchange for the short-term loss of some jobs, these technologies created an entirely new type of tourism industry and made travel cheaper and more convenient.

Like a slow-moving traditional travel agency that processes paper airline tickets, the theory of creative destruction holds that when a business fails, it fails because it’s inefficient.  Or, in other words, a technologically behind company can’t compete with more efficient companies that have embraced technologically, hence have become more efficient.  The theory of creative destruction holds that prosperity arises from the ashes:  a failed business’s customers will migrate to a more technologically fit company.  The failed business’s former employees will eventually find their feet at a more technologically adept company.

In the book “The Lights in the Tunnel:  Automation, Accelerating Technology and the economy of the future,” author Martin Ford points out how entrenched mainstream economic thought is in the notion of Creative Destruction.  Ford writes,

“the idea that technology will ever truly replace a large fraction of the human workforce and lead to permanent, structural unemployment is, for the majority of economists, almost unthinkable. For mainstream economists, at least in the long run, technological advancement always leads to more prosperity and more jobs. This is seen almost as an economic law. Anyone who challenges this “law of economics” is called a “neo-Luddite.” This is not a compliment.”[2]

What if mainstream economics are wrong and there’s no such thing as Creative Destruction?  What if there’s just a bit of Creative and then mostly…  Destruction?

One of the best recent books on the dance between job loss and new technology is called “Race Against the Machine” by two MIT economists, Erik Brynjolfsson and Andrew McAfee.  This book is wonderfully written — clear, yet rich with data and information.  “Race against The Machine” swims against the tide and makes a compelling case that innovative technology, by removing the need for human workers, is creating a devastating tidal wave of redundant workers.  Or unemployment.

According to Brynjolfsson and McAfee, traditional economic theory attributes high unemployment rates to one of three factors, either “stagnation,” “lack of economic growth,” or “end of work.”  In the “stagnation” explanation of unemployment, the cure for unemployment is to unleash the adoption of new technology. The Stagnation theory assumes that the way to get people back to work is to make better use of new technologies, to remove social or regulatory barriers to its widespread uptake.  In other words, technological advancement = more company profits  = the creation of new, high-value jobs = economic growth.  In my experience, people who work in high tech fields embrace the stagnation theory of unemployment.

Here’s where “The Race Against the Machine” gets interesting:  its authors break rank and argue that innovative technology is not the cure, but the cause for high levels of unemployment.  Brynjolfsson and McAfee argue that the reason that jobs in the U.S. and Europe have been disappearing over the past few decades is not (as popularly assumed) because labor has been offshored to factories located in cheaper, less regulated markets.  In fact, factory automation, not offshoring, has reduced the need for human workers, leading to high unemployment.

We’re in a losing race against machine labor.  Brynjolfsson and McAfee  point out that computing power is improving at an ever-increasing rate and the cost of hardware components is plummeting.  The result is that automated solutions (be it a database, industrial robot, or data mining application) are rapidly becoming more efficient, hence more cost-effective than a band of unpredictable and complicated human employees.

Machines don’t get bored.  They don’t complain.  And they’re a lot more reliable and precise than human workers.

As computing power increases and software becomes more sophisticated, machines are taking the first steps onto what used to be once human-only territory:  being intelligent.  In 2011, Watson, a project from IBM’s research division, won the game show Jeopardy, beating out the show’s former human champion.  Watson created quite a stir; imagine applying Watson’s massive text-scanning deductive power to interpreting a patient’s symptoms.  A computer can process and remember entire libraries worth of arcane medical data; a human doctor cannot.

Watson’s triumph at Jeopardy was reminiscent of the victory of another IBM computer a few decades earlier, Big Blue, that defeated the world chess champion’s Kasparov.  Although Big Blue’s victory caused quite a stir, it makes sense that a powerful, well-designed computer program could beat a human on the chess board.  Chess is a complicated and difficult game that involves a nearly-infinite number of possible outcomes.  However, unlike life, a chess board is a finite environment.

A chess game is bounded.  Though the number of possible chess moves is staggeringly large, a powerful computer is more than capable of rapidly chewing through all the possible permutations of how a game may play out.  Kasparov’s defeat at the “hands” of IBM’s Big Blue was a milestone.  Yet, the way that IBM’s Watson and Big Blue defeated humans was by processing large amounts of data very quickly and then drawing (good) conclusions.  That doesn’t mean that they’re really “intelligent.”

Being intelligent is one of the primary aspects of being human that many of us still confidently assume makes us superior to technology.  How many times have you heard somebody say, “machines will *never* be as good as humans at any task that involves thinking or reacting.”  Another belief is that jobs that involve “people skills” can’t be automated.  Or creative activity can’t be automated.

Creativity, people skills, even decision making — all traits we assure ourselves will remain the sole domain of the human brain — are becoming automated.  For example, ten years ago, most people would refuse to get into the back seat of a car whose driver was a computer.  Today, Google has proven that computer-guided cars that find their way around using a firehose stream of GPS data and complex systems of sensors and interactive software are actually safer drivers than humans.  During Google’s massive road test where automated cars drove around U.S. roads for a few months, the only accident was a human driver rear ended a car being driven by a computer.

In reality, there are very few occupations ultimately exempt from automation.  Blue collar jobs have been automated for decades.  Now computers can do many white collar jobs as well.  Marshall Brain points out that “As CPU chips and memory systems finally reach parity with the human brain, and then surpass it, robots will be able to perform nearly any normal job that a human performs today.”

I’m torn.  It’s one thing to point to repetitive, grueling labor — be it physical or cognitive — and say “technology liberates humans from drudgery.”  But that liberation has a hidden cost:  no labor, no job.  Yet, new technologies , even as they take away jobs, also dramatically improve the quality of our lives.  The phrase, “do it manually” has become a synonym for work that’s error-prone and inefficient.  In addition, by introducing automation into manual jobs, humans are spared work that’s tedious, inconvenient, even dangerous.

The problem is that technological advancement is accelerating, yet the human brain remains essentially the same.

Where does this leave those of us who are fascinated and excited by the steady stream of innovative technologies that flow out of universities, companies, government labs and the garages of DIY tinkerers around the world?  Martin Ford offers a solution, that we must re-adjust our notion of what constitutes “work.”  In some nations, farmers are paid by the government to let their fields lie fallow.  Ford proposes that one solution for massive, technological unemployment would be that the government pay people for engaging in constructive activities, for example, for going to school or for reading books.

Here’s another solution:  freeze technology development in place.  Imagine if somehow the development of new technology were to just stop.  No existing technology would be destroyed.  We would simply continue to live with the technology we have now.  But that seems like a poor cure for technologically-induced unemployment.


[1] Patent Reform, Unleashing Innovation, Promoting Economic Growth & Producing High-Paying Jobs.”  A White Paper from the U.S. Department of Commerce, April 13, 2010.  By Arti Rai, Administrator, Office of External Affairs, USPTO, Stuart Graham, Chief Economist, USPTO, Mark Doms, Chief Economist, Department of Commerce.

[2] The Lights in the Tunnel: Automation, Accelerating Technology and the Economy of the Future.  Martin R. Ford.  Acculant™ Publishing.  2009.

A new chapter

This is the end of something old and the start of something new.  This new blog is called “Sailing West.”  It will be about new ideas and game changing technologies.

My former blog, Tech Transfer 2.0, like all good things, has come to an end.  I recently closed Tech Transfer 2.0 (after two years!) and have updated selected articles for publication into a book, Tech Transfer 2.0: How universities can unlock their patent portfolios and create more tech startups. You can buy a paper version from amazon, or download a free pdf.

Continue reading “A new chapter”