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Age of disruption

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Articles - January 2014
Monday, December 09, 2013

Onshoring and the maker movement

0114 Disruption 03
In 2013, 4 zettabytes of data, the equivalent of 250 billion DVDs, will be created, stored and replicated. By 2020, that amount it predicted to reach 40 zettabytes.
Source: IDC Research

Chris Scherer isn’t quite as apocalyptic as Oborne. But the president of the Oregon Manufacturing Extension Partnership, a nonprofit that helps manufacturers adapt to the challenges of a global economy, is plenty attuned to the winds of change. One major transformation under way is onshoring, Scherer says, a movement fueled by rising labor costs in Asia and Mexico, along with new lower-cost information management technologies such as “big data” and cloud computing. “The result is more companies are successful in reducing the hassles of doing [manufacturing] here.”

Undermining the onshoring trend is “the most disruptive force in the workplace today”: the depletion of human capital. The percentage of skilled workers 50 and older is "really high," Scherer says. And as those people phase out, it’s increasingly difficult to replace them. To help recruit the next generation, manufacturers should pay attention to the tech sector, an industry that knows what millennials want. “The things software companies do to attract young workers are completely different than manufacturing," Scherer says: "free gym membership, flex time.”

Over the next decade, "the changes manufacturers are going to have to adopt are pretty extreme,” he adds. But the industry tends to be “somewhat myopic” in terms of looking into the future. “That could create a situation where local companies are behind. Certainly in the workforce that is true; in technology, it could be true.”

If some manufacturers turn inward, plenty are eager to embrace forces of change. One is former Wired editor Chris Anderson, now CEO of 3D Robotics, who delivered the keynote speech at Greater Portland Inc.’s sixth annual economic summit this past fall. The speech, about technologies poised to “revolutionize” the manufacturing space — the 3-D printer, for example — hit home for Greater Portland Inc. president and CEO Sean Robbins, a man who spends a lot of his time thinking about the next phase of economic growth.

In Portland, “hackerspaces” such as Flux, BrainSilo and ADX already feature guilds of producers manufacturing “real products, real things,” Robbins says. As software and hardware costs continue to decline, the 3-D printer will only accelerate the “makers’ movement,” he says.

Indeed, a study conducted this year by Michigan Technological University considered 20 household items — smartphone cases, a garlic press — then calculated how much it would cost to make each using a household 3-D printer. The results are telling: It would cost between $312 and $1,944 to buy the items, but just $18 to make them using the 3-D printer. “It’s democratizing manufacturing,” Robbins says.

The convergence of software and internet connectivity, along with big data, also has the potential to unlock public institutions, he adds. Robbins cites as an example New York City’s “geek squad,” a city department that crunches all sorts of data — number of street trees,  grease-disposal permits, 911 calls — to solve problems ranging from identifying violators of city codes to accelerating disaster cleanup. The larger goal is to leverage massive amounts of data to collaborate with citizens and create efficiencies between government agencies. 
“A smart city can transform public institutions over time,” Robbins says. “There is potential for huge civic disruption.”


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