Shaping the Future
The Third Industrial Revolution
Challenges and Opportunities
Lord Kumar Bhattacharyya
Chairman, WMG
The first industrial revolution
●Mechanisation
Engines
Looms
Factories
●Energy and Materials
From Horse, Hand, Water
To Coal, Coke and Steam
Iron Production
Western Crucible steel
Crompton Spinning Mule
●Mass Labour
From “craftsman” to “worker”
●Transport Networks:
Canals
Macadamised roads
early rail
Early Narrow Gauge steam engine
The second industrial revolution
●
Materials and resources
Bessemer Steel
Petrol
Electrification
●
Production Systems
Interchangeable components
“American System”
●
Bessemer Steel Convertor
Distribution networks and systems:
Telegraph
Railroad
Energy: Electricity/Gas
"Mass products reaching a mass market"
The golden spike:
First transcontinental railroad
Wealth moves from East to
West..
There has always been
global trade, but
industrial revolutions led
to historic shift in wealth
and power from East to
West.
Share of global
manufacturing in 1750:
China: 33%
India: 25%
UK: 1.9%
US: 0.1%
By 1880:
UK: 23%.
US: 15%
China: 12.5%
India: 2.8%
And back again...
As Markets globalised,
trend has partially reversed,
with rise of the east.
But much further to go!
The global south:
Africa, South America...
...and especially India:
2010: China responsible for nearly
20% of World manufacturing
output. (still well below 1750
levels!)
India: below 4%
Lessons from the past:
●
Technology advance transforms lives unexpectedly:
Travel, Domestic Appliances
Housing, Urban explosion
Global power shifts
●
Resources and infrastructure are vital:
Coal, Electricity networks
Trade Transport, Market distribution
●
Good Systems work, but bureaucracy kills:
Change cannot be centrally directed
But innovation/imitation/adaptation can be encouraged.
Governments can create conditions for change
●
Innovative "disruptive" systems and technology wins
No hiding place (Shogunate Japan)
but can always be improved on and surpassed
True of technologies, nations and businesses:
Bessemer > Huntsman steel production
Japan > UK
Toyota > Ford
The third industrial revolution:
Consumers, Connected and Digital
l
●
Digital technology
empowers consumers
●
Creates huge mass of data to be
managed throughout product life
Product design
Consumer behaviour, issues, needs
Product performance & feedback
mobile connectedness
●
Surge in mobile connectedness
Consumers take control of their
consumption, even designing
products!
Tal Golesworthy Aorta bandage
3D Printing, Opensource R&D and CAD
eg: “OpenSprinkler”
Co-creation
Self designed Aorta bandage which saved
Tal Golesworthy
Challenge:
What is “manufacturing” now?
No divide between “Construction”
"Manufacturing" & "Service"
Systems: creation of, reliability, resilience, and
interoperability of eco-systems becomes key
eg: Tablet requires technology and software
systems to be “useful” to consumers. “Systems and
software” costs key to manufacturing, and must be
constantly renewed
Modular manufacturing makes manufactured
homes, infrastructure possible, while personalisation
make it individual
Android digital health wristwatch
being developed at WMG
Consumption modes: Consumption of products
will change. Purchase, lease, by hour?
Value creation lies in what gives the
customer the best outcome:
Developing user-specific design and giving ability to
select best consumption patterns
Globalisation makes possible to find the "niche" in
the "mass" and the “mass” in the “niche”: or “Sliver
sectors” Corning: 60-65% of Global LCD glass
YKK 50% of global zips
Commonality? Very high R&D spend and close
customer contacts to stay on top
Customisable modular housing
Third industrial revolution:
Changing face of manufacturing
Declining importance of
Labour costs
Increasing value of
closeness to market
Key: R&D, being close to
rapid growth & changing
markets
Mass Customisation becomes
deliverable and marketable and
integrated to marketing: eg, New
Range Rover, where social media
interaction key to sales & reduced
marketing costs by 70%
3D Chocolate Printer
Challenge:
innovation is never finished
DIGITAL DESIGN
VALIDATION
PHYSICAL AND SOFTWARE
SMART PRODUCTS
INTERNET OF THINGS
FEEDBACK, NEW
APPLICATIONS
AND NETWORKS
Challenge:
New markets, New consumers
Does networked and consumer driven
manufacturing mean simply a revival for
“western” manufacturing?
YES:
BUT:
Being close to big markets
helps for product
design/responsiveness
Where are the rising markets
global business needs to be
close to?
Cost of Labour less
significant, Skills/IP more:
encourages development
of reshoring manufacturing
Understanding needs of
rapidly changing consumers
in growing markets is even
more significant
Strong Data Network and
physical infrastructure
essential
Emerging markets can
“leapfrog” technologies
(eg telematics infrastructure)
Challenge: getting close to the
growing markets
US/EUROPE
BRICS
EMERGENT AFRICA
All will have own needs,
own requirements.
Challenge:
To create products,
platforms and systems
adaptable for varying and
specialised needs, but
which are inter-operable &
compatible between
markets and networks
Challenges:
Pressure to innovate
Global R&D spend
increasing, driven by
Asian economies
Major differential in
R&D spend and
scientist/engineer
density between
high income/low
income nations
Key issue:
Where will next
generation of
disruptive
technologies be
identified and
exploited?
Challenges: carbon and energy
Legislative pressure on carbon emissions will not cease
Ever greater pressure on energy consumption: rising demand for
energy fuels battle for resources
Need for stable, secure, sustainable energy networks
Challenges: Data Security & IP
Much personal data will be online:
Consumer behaviour, locations,
medical records
Protection of intellectual property will be
ever harder. First 3D Printing Copyright
cease and desist letter sent in 2011
Secure data will be key consumer
issue. A trust challenge for
manufacturers?
Business data: Designs, order
patterns, stock levels, product
issues.
Crucially: Protecting Safety Critical
systems. eg drive-by-wire:
Game of Thrones iPhone dock:
HBO lodges Copyright infringement
“Just as the Internet made trading MP3 music files
and ripped movies a breeze, downloading 3-D
images to print on your shiny new MakerBot printer
will be as easy as torrenting The Hurt Locker.”
JP Titlow, readwrite.com
Manufacturing will have to ride this wave,
just as bookshops/record stores had to.
But can anticipate and gain competitive
advantage. eg Samsung, Apple, Amazon,
Opportunities: Innovation
through collaboration
Opportunities revolve around supporting innovation eco-systems.
No-one can do all alone. Need partnership, collaboration.
SYSTEMS
SMARTER
PRODUCTS
SECURITY
DIGITAL
DESIGN
PERSONALISED
KNOWLEDGE
NETWORKS
DIGITISATION
AND NETWORKS
SKILLS
& PEOPLE
CLEANER
&
LIGHTER
PERVASIVE
TECHNOLOGY
SUPPLY
CHAINS
NEW
BUSINESS
MODELS
RESOURCES
Opportunities: New Supply Chains
and Lateral Networks
Emerging online manufacturing
communities and supply networks:
Ali-Baba to MFG.com to “Fab Labs”
3-D printing services
(first iPad covers for sale 4 days after iPad
launch)
“Today, anyone with an invention or
good design can upload files to a
service to have that product made, in
small batches or large, or make it
themselves with increasingly powerful
digital desktop fabrication tools such
as 3-D printers.
Parts and goods to shared CAD files, to
interoperability
“A factory in the cloud”
Would-be entrepreneurs and inventors
are no longer at the mercy of large
companies to manufacture their ideas”
Also key: supply chains that can cope with
rapid growth in demand: "global surge" or
viral craze for product. Resilience for rapid
growth.
Chris Anderson, “Makers”
Chris Anderson's “Opensprinkler”
Opportunities: Digital Design and
Validation
Digital design and experiential
engineering allows you to
understand consumer
response to products at preprototype stage, and
understand consumer desires
and deliverability challenges
Design to manufacture
Technologies to support best in class design to
include materials & manufacturing processes
that deliver premium design intent without
compromise and uses new technologies to
enhance aesthetic appeal.
Here Mr Ratan Tata observes WMGs 3D digital
design and feedback studio
Next generation 1st class seats:
virtual prototypes
Opportunities:
tap into knowledge eco-systems
University-Business
Partnerships: “Bridging the
'valley of death” through
shared innovation: eg
MIT/CALTECH & new US
manufacturing investment.
The Technology “Valley of death”
Global Knowledge Clusters:
globally networked expertise
eg WMGs joint industry
focused programmes with IIT
on innovative materials
Physical innovation ecosystems:
eg National Automotive
Innovation Campus
Developing novel technologies
for low carbon mobility
NAIC, WMG
Opportunities: Cleaner and lighter
The next 10 years will see move to polymer
composites and multi-material structures in
advanced mass manufacturing.
Polymer composites will open up
opportunities for introducing multifunctionality (i.e energy storage/harvesting,
electrical integration)
This links into drive towards smart,
connected vehicles, integration of IT and
smart resource management.
Premium automotive
technologies using
lightweight materials and
lower carbon usage
Opportunities: Systems and new
business models
Integrating existing
technologies to better meet
consumer/customer needs.
Merging of manufacturing and
services: “Servitization”
“Tanishq” :
Merging of platform, marketing
Winning consumer design
and manufacture: eg Etsy
Merging consumption and
creation : eg Tanishq “My
Expression”
Etsy: one off item
crafts website
Hub of all things: A digital
data vault to store consumer
data, allowing data to be
accessed only by those who
agree to usage standards
Opportunities: Smarter Products
Smarter Vehicles at JLR
Increase in driver assistance and active safety
features enabled by all-round sensing,
electronic actuation of steering and braking etc.
Increase in sensors, data and on board
processing enables the vehicle to interact with
customers in a smarter, more human way
Opportunities: Personalisation
Digital design
Open networks
Consumer feedback and cocreation
High consumer value
Accuracy of fit
“Businesses will spend a great deal of time and effort
discussing with the customer its requirements – before creating
the goods it needs.
A good analogy is with the medical profession. The best doctors
use empathy and knowledge to find out how a patient needs to be
treated.
They then supply a range of goods – medicines – and services
– clinical treatment – to improve the condition.
Manufacturing managers will increasingly resemble physicians.”
PETER MARSH, “NEW INDUSTRIAL REVOLUTION”
Modular manufacturing &
3D Printing (ALM)
Fast, flexible supply chains and
networks
Creates market for “Batch of
One” products
The “mass digital craftsman”
Opportunities:
Resource management
How you manage resource use:
(eg energy or land) to meet
consumer needs as important as
total resource requirement.
Prudent and efficient use of
natural resources increases
profitability of companies and
creates consumer value through:
Reduced waste and emissions
Better use of raw materials (via
focus on renewability)
Elimination of toxic substances
Recycling and recovery of
materials
Dr Rohit Bhagat of WMG is
researching electrochemical
bioremediation to bring
contaminated Urban land back
into residential use
Opportunities: Pervasiveness
Technologies find new
functions when
knowledge is connected
and networked
Polli-Brick combines recycled
PET plastic bottles with
modular building techniques
and CAD
“In the new era, it’s not enough to
know about different
technologies, you have to be able
to combine them”
Omar Ishrak, CEO, Medtronic
UK National synchotron facility
being used to develop synthetic
vaccine for hand, foot and mouth
disease.
Opportunities: Energy
Energy production and
conservation an ever more
essential part of industrial design
“Today, Internet technology and
renewable energies are beginning to
merge to create a new infrastructure for a
Third Industrial Revolution that will change
the way power is distributed in the 21st
century.
In the coming era, hundreds of millions of
people will produce their own renewable
energy in their homes, offices, and
factories and share green electricity with
each other in an “Energy Internet” just like
we now generate and share information
online.”
Jeremy Rifkin,
The Third Industrial Revolution
Micro Gas Turbine, Bladon Jets
Opportunities: Skills and People
Up-Skilling Employees through
collaborative modular education:
Employees need constant exposure to new
technologies/resources/application
Also: chance to create networks and leveraging
universities
Firms need specific skills in Business relevant
technologies
Limits prohibitive costs for business
(time and money)
Route needs to give globally recognised
qualifications
COLLABORATION ESSENTIAL TO SUCCESS
CONCLUSIONS
The Third Revolution is already
here:
New business models
New systems and integration of systems
New ways of developing products
New ways of reaching markets
New ways of relating to consumers
New ways of manufacturing
New ways of managing supply chains and networks
This change can either be anticipated
and profited from, or ignored. The
choice is yours!
In 2012, Instagram was purchased for
$1billion.
Kodak entered bankruptcy.
Shaping the Future