3-D printing, married with artificial intelligence and robots, will disrupt manufacturing globally. It will radically alter who makes what where. Rather than subcontracting the production of components to Southeast Asia, shipping those components to China for assembly, and finally shipping them to consumers, many manufacturers will produce locally and switch to just-in-time production schedules. This shift will eliminate shipping and inventory costs as well deal with the increasingly costly problem of intellectual property theft. Local production will result in major reductions in the globalization of manufacturing and thus change the economic element of the global strategic environment. As manufacturing returns to rich countries, it will deprive the nations of Southeast Asia of the opportunity to pursue export-based growth. Perhaps the greatest threat is to Chinese growth. Even as its growth settles to a new, lower, normal, China struggles to shift from an export-based economy to a consumption-based one. If China cannot make the shift before the additive manufacturing results in localized manufacturing, it will suffer major negative impacts on growth.
Read the whole thing. Speculative, as Tyler would say. If you would like to hear the guy speak, then tune in or attend on March 9. His topic will be new technologies of war. Possible preview here.
The F-35 is a poster child for the difficultly of reconsidering a program of record. Built in 45 states at a cost of $399 B for 2,443 aircraft and with expected lifetime operating cost of $1 trillion, the F-35 has powerful Congressional support. Further, U.S. doctrine and powerful service constituencies heavily favor these exquisite systems. This is natural since doctrine and preferences are usually based on experience and current U.S. experience is based on exquisite systems. These two powerful factors will make it difficult to dispassionately examine other options. However, we must do so soon. Our experience with the F-35 shows that the decision to pursue a different path needs to be taken before the new system gains a powerful constituency that insists it be built regardless of its capability.
Time-insensitive shipping is simply too small a cost to justify decentralized relocation closer to consumers and lose both economies of scale and the advantages of proximity to an industrial hub for your facility. And anyway, the consumption ‘center of gravity’ is shifting to where a lot of the manufacturing is now happening anyway in the developing world.
The Chinese make a lot of the world’s cement, and they export a lot of cement, but they consume a lot of cement domestically too. You can replace ‘cement’ with lots of things too.
People tend to be ignorant of these low transportation costs and psychologically anchor on things like postage rates or domestic retail shipping or air travel prices. But you can move a whole container halfway around the world from port to port for a few hundred bucks these days, especially since oil is now cheaper.
Shipping is trivial compared to geographic regulatory arbitrage. Even forgetting the wage discrepancy (which would also be trivial for nearly-fully-automated facilities), just compare the regulatory costs and compliance burdens (and delays and lawsuits … ) to build something in California vs. China. The great tragedy is that even the robots of American companies are probably going to be working overseas.
Most things have their place but that is rarely as large as proponents speculate. 3D will excel not at mass manufacturing but personalized production. F35s are an important component but drones are already more significant.
Not only in this article, but generally, expert observers appear to conclude that there is a “plan” or movement for the Chinese social order to “shift” from relying on an “export economy” to being restructured as a “consumer economy.”
In a social order relying on exports, a substantial portion of labor and intellectual efforts is rendered in productions for, and services to, other social orders (outsiders, foreigners if you will). Highly simplified, exporting is basically working for outsiders. Importing is basically having outsiders work for you.
The proportionate distribution of work and services done in a social order done amongst insiders to that done for outsiders seems to be identified as the proportion of the “consumer economy.”
In the case of China, there are alternatives to considering the changes in those proportions as “shifts” from or to. Dependent upon the effectiveness of distribution, some level of a “consumer economy” is always encapsulated in an “export economy.”
When work for outsiders (exports) becomes less available the proportion changes, but it is not strictly speaking a “shift” (an effort to change the proportions). The major evidence of a “shift” would be observed in the development of systems, facilities and “institutions” for distribution. Perhaps the expert observers have noted those.
The thing predictions about “additive manufacturing” miss is that this technology has been around for a good while now, mostly for the purpose of improving the products and processes of “traditional” manufacturing. So advances in 3D printing don’t necessarily get us closer to 3D printing becoming a prime means of production, since thanks to such technology the goalposts for when such a massive shift makes sense keep moving.