Member of Advisory Council at Hudson Institute Kleptocracy Initiative
The train to Boston from New York speeds past stunning scenery as well as the blight of abandoned factories, scarred with graffiti.
These empty buildings are the remnants of a New England that was the China of the Industrial Revolution based on cheap immigrant labour. Today, its towns languish economically, except for Boston, which is enjoying a resurgence as a technology, pharma, and advanced manufacturing hub.
This week, American experts from industry, technology, and policy gathered at a conference in Boston, curated by Singularity University, to discuss the role of tech in manufacturing.
In global terms, the industrial sector represents one-third of all global economic output and represents half of the world’s energy consumption and renewables.
“This year, offshore wind power generation matched the cost of natural gas power plants in Europe,” said Singularity’s energy expert Ramez Naam. “In windy parts of the world, wind power is cheapest, and in sunny parts of the world solar is.”
In solar, record low prices were reached this year too. A major contract in Dubai at 2.91 U.S. cents per kilowatt hour, the world’s lowest — Ontario’s prices average 8 cents per kilowatt hour.
India just completed the world’s largest solar farm (4.5 U.S. cents per kilowatt hour) and its federal government intends to have only electrically-powered vehicles by 2030 – completely bypassing fossil fuels.
As these industries scale, costs plummet for solar panels and turbines.
China is converting to renewables rapidly, but has also earmarked half a trillion dollars to become the world’s advanced manufacturing leader. This is a major pivot, necessary in light of the fact that cheap labour, in an era of technology, is no longer a competitive advantage.
“China has launched the Artificial Intelligence Institute and its companies are buying companies globally in this space,” said Deborah Wince-Smith, President of the United States Council on Competitiveness in Washington D.C.
This represents a challenge for the United States but, more importantly, the fact that China is also cheating.
“The IP theft is enormous and constant. China is the epicentre of digital theft,” she said. “If nothing had been stolen by China, the U.S. would have another $1.7 trillion in GDP.”
She suggested governments must build cyber defenses to protect their economic players as well as their infrastructure.
Over three days, presenters unveiled the latest robots, software tools, and business models to several hundred manufacturers. The challenge is for manufacturers to incorporate emerging technologies such as AI or biotech into their operations.
Food manufacturers in future will deploy cellular farming, or growing bacon from cells taken from pigs. Cows will be cloned. The speed of plant growth will increase and pharma companies may be able to produce mass vaccines in days, not months, said Juan Enriquez, Managing Director of life sciences company Excel Venture.
But traditional manufacturing is being revolutionised by additive or 3D printing. Layers of material are formed under computer control to create an object. These machines have gone from small boxes to industrial scale.
“3D is industrialising and is reaching scale, size and speeds that are new,” said Andre Wegner, CEO of Authentise. “They are now printing titanium parts and Boeing is going to save US$3 million per Dream Liner. There are digital knitting machines creating garments from scans.”
“The largest 3D printer ever — 14 x 3 x 7 meters – has been built for wind turbine blades on site to reduce transport costs,” he said. A small house was printed this year in 24 hours.
Leading this revolution is one of the world’s biggest manufacturers, General Electric, which is turning its 500 factories in dozens of countries into “brilliant factories”, said GE Ventures Managing Director Karen Kerr. “About 17 are brilliant factories already.”
GE owns minority positions in some of the most innovative companies in this space such as Local Motors, which crowdsources innovation and builds vehicles in micro factories.
Its business model is to design unique vehicles and build them profitably at a low volume. If they gain popularity, Local Motors will hand off manufacturing to mass production facilities.
Another is Xometry which has an AirBnB business model and is a platform that connects hundreds of existing machine shops with customers who need their services.
Boston is becoming a start-up mecca due to its dozens of universities, colleges, and a pro-active local government. An Innovation District is exploding in size downtown where “build spaces” offer access to machinery and software to enable “maker” to prototype ideas.
The first autonomous vehicles anywhere have been plying the streets of Boston for months.
The city has adapted zoning, laws, regulations, and rehabilitated real estate assets to attract start-ups.
And it’s working!