Makers – The New Industrial Revolution, Chris Anderson, Random House Business Books, Pp 257(HB),
Dr R Balashankar
EARLIER, there used to be clear dividing lines—inventor, manufacturer and the retailer. The inventor could not make profit if he did not convert his idea into a commercially viable product to be outsourced to a manufacturer or start the business himself. Today, in this world of internet and increased and faster communication these dividing lines have disappeared. Chris Anderson, in his book Makers: The New Industrial Revolution says, “The beauty of the Web is that it democratized the tools of both invention and of production. Anyone with an idea for a service can turn it into a product with some software code…—no patent required.
Then, with a keystroke you can “ship it” to a global market of billions of people.” Quoting the example of several people during the industrial revolution, he says many did not make money from the invention and the patent because they could not convert them into commercial successes. Someone else walked away with profit by making viable models.
Anderson feels that for an economy to remain vibrant, it needs to manufacture things. He feels that the industrialised countries have wholesale outsourced these jobs to the Asian countries because of not only cheaper but ready and skilled labour. “A service economy is all well and good, but eliminate manufacturing and you’re a nation of bankers, burger flippers, and tour guides.”
Manufacturing was always seen as expensive, demanding money and skill. But all that has changed, says Anderson. Earlier it was difficult to get someone to make machine parts for your invention. Now you can order it from the net, from a choice of vendors. 3-D models can be sent to be replicated. It is here that the Asian countries are scoring.
The giant companies manufacturing in China or India can get all the parts and tools from a variety of sources. They did not have to wait after placing orders. It was almost like going to corner shop to get bread.
“Today there are nearly a thousand “marketspaces”—shared production facilities—around the world, and they’re growing at an astounding rate: Shanghai alone is building one hundred of them.” The Obama administration launched a programme to launch marketspaces into a thousand American schools in four years, starting 2012. “In a sense, this is the return of the school workshop class, but now upgraded for the Web Age” he says.
The Do-It-Yourself model of manufacturing is something Anderson advocates to get back to the lost ground on manufacturing. Especially as the means, tools and facilities are available on the tip of the finger, on the keyboard. Today, the digital economy represents $20 trillion of revenues according to Citibank and Oxford Economics. On the other hand the economy beyond the Web, by some estimate is about $130 trillion. The digital economy has a long way to catch up. Anderson believes that the pendulum of manufacturing will swing back to the most nimble developed countries, despite their relatively expensive labour. “Globalization and communication flattened the world once, drawing manufacturing to low-cost labor in the developing world, a process first observed in the nineteenth century by David Ricardo as the triumph of “comparative advantage.”
“Now we are flattening it again, but along a different dimension. Thanks to automation, labor costs are a small and shrinking fraction of the cost of making something. For electronics, they can be just a few percent. At that point, other factors, from transportation costs to time, start to matter more.”
Calling the Web Third Industrial Revolution Anderson places much emphasis and hope on the developed countries catching up on the ceded ground on manufacturing. It is more of a wish than prediction as things stand today. Because what is true for the developed countries is true for the developing countries like India, China, and Brazil also and they would all work to retain the edge they have created. But his concluding optimism is realistic. “For every Foxconn with half-million employees making mass-market goods, there will be thousands of new companies with just a few targeted niches. Together they will reshape the world of making.”
Chris Anderson is Editor-in-Chief of Wired magazine and is the author of The Long Tail a well-received book. His book is a plea to the West, led by America to go back to the roots, the strength of the old economy that lies at manufacturing. Like someone said a couple of years ago, if Chinese decide, they can ruin the European Christmas, for, all the goodies from decorations to gifts are manufactured and shipped to these countries from China. Some in the West are waking up to their reality. Anderson’s book is definitely interesting but could have been crisper with lesser personal anecdotes.
(Random House Business Books, Vauxhall Bridge Road, London SW1V2SA)