FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.

posted on 22 June 2016

A Fourth Industrial Revolution Is Powering The Rise Of Smart Manufacturing

from The Conversation

-- this post authored by Lisa De Propris, University of Birmingham

Technology is all around us, and sometimes in us. We experience it daily in the way we stream music, in how we use an app to navigate a museum or a shopping centre, or to check our calorie burning and heart rate. This technology is changing our lifestyle and consumption. There is, of course, a lot more technology around us that we don't see or touch at source. A wave of technological innovation has started to fundamentally alter how we make stuff. And it signals an era of huge change.

In the 1920s, Russian economist Nikolai Kondratiev linked waves of technological change occurring every 50 years or so with cycles in global GDP growth. He suggested that radical inventions could profoundly revolutionise the techno-economic nature of economies. Indeed, the subsequent spawning of countless minor and incremental innovations could penetrate every aspect of the economy.

The idea of Kondratiev waves is that as old technologies exhaust their potential for new ideas to boost the economy, they slow down until a critical mass of new technologies comes to fruition all at once. That then kicks off a new technological wave that is able to trigger a spate of new applications in new processes, new products and new services.

Technology can bring unknown pleasure. Robin Welsh/Flickr, CC BY-NC-ND

Radical tech

You can see this in the cellphone-to-smartphone shift. This was made possible by digital technology which created a common platform across a number of functions: communications and internet, imaging, video, GPS, the digital camera and of course apps. This is radical innovation and from it, subsequent hardware and software variants have added marginal value.

And so, each wave fundamentally changes which resources are used and how they are used, as well as reshaping the organisation of production. New sectors are created while others become obsolete. This dynamism resets the economy and sparks growth again.

There is some consensus that four industrial revolutions can be associated with new technological waves. Innovations related to steam power, cotton, steel, and railways helped to give us the first industrial revolution of mass production and mechanisation. The second was triggered by the introduction of electricity, heavy and mechanical engineering and synthetic chemistry. The third was triggered by innovations in electronics and computers, petrochemicals and aerospace.

Objects of desire. EPA/Christopher Jue

Industry 4.0

And what about the fourth? Right now, a host of new technologies are driving a wave of innovation that takes us into a new age.

Think of the internet, nanotechnology, bioscience, electronics, photonics, advanced materials and renewable energies. Changes to our own techno-economic system started in the mid-1980s, but we had to wait the turn of the century to witness their impact on our production methods.

Smart manufacturing may enable the upgrading and anchoring of manufacturing activities even in advanced and high-cost economies such as the European Union.

We can identify some key characteristics. First, we see new technologies initiating new sectors or upgrading old ones. Core to this is the symbiosis between traditional manufacturing and services, through processes of "servitisation". Take Rolls-Royce, which of course produces engines, but also sells them within a "power-by-the-hour" maintenance package that restructures its offering as a service that delivers the ability to fly planes rather than simply selling a one-off product.

Power games. Lorenzo Benetton/Flickr, CC BY-NC-ND

Co-creating and producing

There are also untapped market niches for personalised and customised products. These need to be produced in small batches or even as unique pieces. Such niche markets require customers to co-innovate or even co-produce with the manufacturer. Digital communications enable manufacturers to manage small scale businesses that have design and produce locally while connecting with global customers.

Local Motors is a small US manufacturer focused on low-volume, open-source designs which are assembled in microfactories. Products have included cars and motorbikes as well as electric bicycles, children's ride-in toy cars, and remote-controlled toy cars and skateboards. It 3D prints some of the components used in making its products. Its Rally Fighters cars have involved "co-creation", where the product is designed cooperatively with the customer.

3D printing enables innovators and inventors to become manufacturers and to connect directly with markets both locally and globally. One company, Shapeways, was spun out of the Dutch electronics giant Phillips in 2007. Now based in New York it offers a 3D printing marketplace and service. You can design and upload 3D printable files, which are then made for you or a client from materials including acrylics, stainless steel, food-safe ceramics, and silver. Alternatively consumers and designers can work together in "co-creator platforms" to design unique things which Shapeways prints.

A little dear? Shapeways bronze printed objects. Shapeways/Flickr, CC BY-NC-ND

Products like this tend to have a high content of technology, innovation, customised design and servicing. Moreover, their consumers tend not to be as price sensitive, so technology, knowledge and innovation are the key elements which shape the competitiveness contest.


Another prediction for smart manufacturing is that it will redesign product supply chains by integrating the local and the global more strategically. Some hands-on innovators in the so-called "makers movement" are making the most of a trend towards linking innovating and making. They choose suppliers nearer to home, but connect with demand both close and far from home.

It promises a more efficient form of production, which we can also see in the increased use of more sustainable processes, where resources are re-manufactured and components re-used, or where bio, waste or natural products are used as feedstocks. There are echoes here of the circular economy, where waste is fed back into the production process, where alternative energy changes business models, or food production and consumption is "relocalised". And it is this kind of efficiency at the heart of smart manufacturing that presents a real opportunity for advanced economies to pursue more distributed and sustainable socio-economic growth.

This has been co-published with the World Economic Forum. Read more here.

The ConversationLisa De Propris, Professor of Regional Economic Development, University of Birmingham

This article was originally published on The Conversation. Read the original article.

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical News Post Listing

Make a Comment

Econintersect wants your comments, data and opinion on the articles posted. You can also comment using Facebook directly using he comment block below.

Econintersect Contributors


Print this page or create a PDF file of this page
Print Friendly and PDF

The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.

Take a look at what is going on inside of
Main Home
Analysis Blog
Why Long-Run Theories of Profit and Accumulation Fall Short
Brexit - Who Wins and Loses
News Blog
April 2017 Chemical Activity Barometer Suggests Continued Growth Through 2017
Final April 2017 Michigan Consumer Sentiment Slips but Remains Strong
Richmond Fed Manufacturing Survey Again Improves In April 2017.
March 2017 Headline New Home Sales Improve and Above Expectations
Case-Shiller 20 City Home Price Index February 2017 Shows 5.9 % Year-over-Year Growth
Infographic Of The Day: Comparison Of Population Density
Early Headlines: Asia Stocks, Dollar, And Oil All Up, Gold Down, China Stocks Diverge, Bankrupt Retail, Courtiers To Palace Wed., US Starts Trade War With Canada Over Lumber, And More
April 24, 2017 Weather and Climate Report - All Too Normal!
The Countries With The Fastest Internet
CO2 Levels And Global Warming
Worthless Mining Waste Could Suck CO Out Of The Atmosphere And Reverse Emissions
Average Gasoline Prices for Week Ending 24 April 2017 Rose Over 1 Cent
The Worst Roads In The USA
Investing Blog
Irrational Exuberance From France
The Real 401k Plan Manager 24 April 2017
Opinion Blog
Reducing Inequality Could Be A Matter Of Survival
America's Gilded Age 2: On The Rocks
Precious Metals Blog
Three Gold Plays For The New Era Of Chaos
Live Markets
25Apr2017 Pre-Market Commentary: Most Global Markets Are In The Green
Amazon Books & More

.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Middle East / Africa
USA Government



Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day


Asia / Pacific
Middle East / Africa
USA Government

RSS Feeds / Social Media

Combined Econintersect Feed

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution



  Top Economics Site Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved