The end of Chinese manufacturing and rebirth of US industry
July 30, 2012
Tesla Motors robotics manufacturing (credit: Tesla Motors)
There is great concern about China’s real-estate and infrastructure bubbles. But these are just short-term challenges that China may be able to spend its way out of.
The real threat to China’s economy is bigger and longer term: its manufacturing bubble.
Rising costs and political pressure aren’t what’s going to rapidly change the equation. The disruption will come from a set of technologies that are advancing at exponential rates and converging, Vivek Wadhwa reports on Forbes.
These technologies include robotics, artificial intelligence, 3D printing, and nanotechnology.
China has many reasons to worry, and manufacturing will undoubtedly return to the U.S. — if not in this decade then early in the next. But the same jobs that left the U.S. won’t come back: they won’t exist. What will the new jobs be?
Autodesk CEO Carl Bass says that just as we have created new, higher-paying jobs in every other industrial transition, we will create a new set of industries and professions in this one.
Carl Bass is one of the leading authorities on 3D printing and digital manufacturing, and I share his optimism that we will create an era of abundance. But I worry if we will create the new jobs fast enough and distribute the prosperity. Carl and I discussed this at Singularity University a few months ago. And I also discussed China manufacturing with The Economist China bureau chief, Vijay Vaitheeswaran. You can find these videos below.
Comments (35)
by william wait P.hd
Interesting talk with two brilliant minds. The underlying assumption seems to be that if we can just achieve material success for everyone, everything will be wonderful. Having worked for over thirty years with those individuals that are considered successful and seen how deeply disturbed many of them are, I would hope that we would all stop for a moment and ask ourselves what are we assuming ? Is there anyone out there that really believes providing everyone on the planet with an i-pad and an electric car human destiny will be fulfilled? There are many much deeper existential issues that need to be a part of any discussion of our future,I dont mean to trivialize this interesting discussion, only to suggest it would be far richer in the context of the quality of human life.
by anthrobotic
The other side of the blade that might get stuffed into China is the lack of intellectual capital – discussed here, seven months ago, with righteous contempt for journalistic decorum:
“Hello, China! Welcome to Capitalism. Ummm, You Might Not Like the Next Part…” http://goo.gl/GfcJL
by Maxdep
I think this article doesn’t make much sense
If it is China vs US, I think china is pretty well armed financially for the next decade and that should be enough to maintain its superiority even in innovation. With over 1.4 billion people, I can hardly imagine they won’t find at least a few extremely creative minds able to plan the necessary modifications of their industries.
But in my view, since we are currently witnessing an online education explosion with more and more knowledge made available, I expect/hope innovation will flourish everywhere… and not only in US and China.
by gary
Ditto your concern. These developments are highly devolutionary and disruptive. I think that small groups of individuals will wrest power from nations and large corporations. And there will be an enormous bifurcation in the fortunes of humanity; the techno-elite will prosper whereas everyone else will suffer.
by John
Sorry but this whole prediction is just delusional !
If it is just cheap labor jobs moving away to China, please explain to me why for example Germany, who have roughly the same standard of living, still have the jobs (Jobsless rate lower then ever since 1989).
And while we are on the topic: I am reading here on kurzweilai for years and one thing strikes me as interesting: roughly 90-95% of the technological breakthroughs ‘that are coming’ are of american companies, laboratories or universities. But where exactly has that ever translated into the real world? Where are the American High Tech Exports ? Again take Germany: How come they are rarely mentioned here in terms of innovative research, yet the real world impact of german high tech products is worlds apart.
I can tell you the reason for both: American products are not half as good as americans like to think they are. And the few good products that are developed here, e.g. consumer electronics and microchips, don’t produce many good jobs, because the actual manufacturing process is a high quantity/low quality product (consumer electronics) or is done by sophisticated robots (microchips) that aren’t in the US because again our plants and work force aren’t half as good as patriotism likes us to think.
So yes: The world is changing and new jobs are created, why they should be created in the US is everyones best guess.
I can tell you what will happen: The US economy will crash once its war on the Euro fails (is it will). Then Europe will become the economic center of the western hemisphere while the US becomes a third world country for a decade or two, maybe even faces a civil war. I know that you hard nosed patriots don’t want to believe this know, but that doesn’t change the fact that it is happening, and fast.
by Zippy Hoffmanhuas
Sounds like a German…. What country is the largest manufacturer in the world?
by Bri
From my understanding it’s America. Germany is next, but may be passed by china. Japan used to be third. The big problem is robotics. The only difference in cost to manufacture is in the relative costs of materials. Labour is the big killer in th US. Robots are faster, more accurate, have little down time. Why make something in China and then take three months to ship it here? The new jobs is also a problem. On NPR aRadio Lab segment addressed this issue well. One example that sums it up well , was there reference to computers in gene research. The scientist couldn’t sift through all the data and get a working model that predicted genetic outcomes. So they made a program to work it out, and it did. It predicted the outcomes very well. The problem was that they couldn’t make sense of the results of the program. This trend will continue. When a programmer “writes”, he doesn’t write in machine code. He uses a program, to write a program. They made a program that ” discovered” the laws of thermodynamics. Relatively speeking, it was a price of cake for it. It took us how long to do it with our 100 trillion massively parallel neurons? Soon programs will be writing programs, so much better than we could hope to do it. Any job that might arise, the robotic AI will be able to out compete any human, no matter how enhanced. Our brains are just slow. That is going to happen way before we can” upload” into a superior substrate. I purposefully own my own, creatively demanding business, because I think that type of job will last longer than most, and I can steer it in directions that can make it survive longer. I will try and adapt as much as I can. I cater to the rich. They will last the longest. At some point financial collapse will happen. Hopefully they will give us money to spend. That will stave off total collapse. It will evolve into a new paradigm. We have a social structure based off what we do. If your not a doctor, lawyer, accountant, teacher, then what will be your social status. So many ways that we identify ourselves will be gone. What is the point of the Olympics if nanobots can create the perfect athletes body(incrementally) and you can jump over a pole vaulters bar. If you don’t need to do it for a reason, you won’t do it to show off your dedication,sacrifice, talent and training. Anybody can do it. From my perpective, the future looks great. It’s just not what you think it’s going to be, and virtual reality will be like a black hole, that once you fall into, it will be hard to go back. Once robots can walk with us and the cell phone is the size of a red blood cell, jobs will seem to vanish overnight.
by John
I think the problem in the US and large parts of Europe, like for example the UK, is that inventing and building stuff isn’t held in very high esteem. Much less than it should. That leads to all the bright people going into law or worst of all economics. You know there can only be so many vendors for any given product and the city/wall street rode this particular horse to death a long long time ago. (contrary to popular belief, that wasn’t the fault auf George W. Bush, but those trends where formed as soon as the 80s, which of course is the reason Obama can do nothing to turn this thing around)
If (and thats a big IF) the US can manage to shut Wall Street down and turn back to a innovation and production driven economy, then the chance is there to get this over with, with (relatively!) minor upheaval. But maybe it is to late even for that. We are now at a point where money is printed and all economic numbers that come out of Washington and the FED are purely made up. The Horse is dead but they put strings on it so that it looks alive, at least from the distance.
by Carl Brooks
totally agree, i think its probably allot more wide spread than US and Europe tho. It seems to me like companies everywhere just don’t seem to be able to adapt quickly enough to changing markets. Companies find their market and adapt and spread within that market, Only to find 5 years later that the market is totally different. from my perspective (lab tech in Manchester UK) the company i work for, testing for environmental pollutants, is basically doomed within 10 years, the moment a mass spectrometer app becomes available on a phone, thats game over. if i could, i would be the one to create that app/tech for my company but i’m not “qualified” enough and dont “rank” highly enough for my opinions and ideas to matter and that seems to happen the world over. As long as the “top brass”, keep earning there pretty penny they wont want to adapt there business strategies (if it aint broke why fix it), untill its to late and the market suddenly dies
by Mr.x
Hm, here in Europe you see almost nothing manufactured in the USA.Btw America is a continent, not just your country. You have roughly 4 times as many people as Germany, so I am not impressed if you produce more stuff.I am probobly stronger than someone who wheighs 50 kg less, but that does not mean I am better in being strong.
You never hear such statements from “Americans” disregarding other factors if people are talking about stuff like the high crime-rates in the USA.Then, one hears: Our country is much bigger and has a much bigger population, that’s the reason (probably in better English prose, and with strong rhetorics).
John is probably not German, refering to them as them and saying that American patriotism likes him to think stuff. But of course, if he is not American, then you can safely dismiss his points.
by Mr.x
“So yes: The world is changing and new jobs are created, why they should be created in the US is everyones best guess.”
I guess you guys (and gals) will have to share a lot of these jobs with China, Europe, Japan, etc. Concerning new developments in other countries: Where I am from nobody is interested (that much) in what you might do/want to do, much more important is what you actually do.So people come out with their stuff if they are fairly sure to have something substantial (or stern criticism will be received).The USA is much more media driven. I think talking big makes for good foundraising.Most stuff on this site comes from other sources, e.g US-newspapers.Since those tend to finance themselves through adversiting, which is influenced by clicks, I find it to be hardly surprising that they have a strong focus on their “homeland.”
I also think excessive “patriotism”, just like excessive self-confidence, usually leads to delusion and agression.It can also be a form of escapism.
by ricky
So Funny China will also using the same technology and robotics for their manufacturing .Remember the future of employment will be in programming and software development for these 3d printing and robots .So Chinese are very good at these .Look at Internation informatics Olympiad or any other science Olympiad Chinese and Asian countries win most of the competition.Even in usa university Chinese are more .So manufacturing belongs to asia and china. Recently Terry gou ceo of Foxconn recently ordered 3 million robots for manufacturing .So who is winning ?China now largest market of robotics surpassing the Japan .So future belongs to china.
by DeBee Corley
Apparently most of the politicals here don’t understand exponential growth.
We won’t be fighting over scraps.
If you have noticed, our children are learning to be spoiled pampered netizens. They have no concerns where it is all coming from.
by Bri
The realization of these truths will spread like wild fire. The resolution will take a lot of work. Skilled orators must quel the unrest and focus it’s energy on key issues. Unfortunately, we don’t own the place. Those that do, will try to hold onto it.
by Henrik Yde
singularity means: all are one, connected, everything flowing freely –
all information and “wealth” is shared – it is both a logical, technical AND moral absolute
a continuation of the past 30 years trend of a tiny elite getting richer and the masses getting poorer – whatever anyone’s explanations of this current anti-singularity reality may be – will lead to certain destruction of all humankind
anyone who wants to contribute to a sustained human consciousness must embrace the moral absolute that all information and assets must be shared
antiquated notions of freedom to care only about the self and its glorification through accumulation of objects at the cost of other humans’ well being ACT COUNTER to the trend toward singularity
the synergistic moral & mathematical logic I have here presented is beyond debate and thus one has only to choose between SELF and SINGULARITY – a.k.a. choose between competition, leverage, acquisition, destruction AND creation, sharing, singularity, oneness
who are YOU with then? Your self – or all human kind…?
by Dunnie
A false dilemma, but, I agree with your sentiment.
There won’t a choice to make when we approach the singularity; scarcity, value, and wealth will simply become irrelevant. We’ve seen the first steps in this process with information; the same thing will happen with production and the distribution of resources. This is going to happen a lot faster than we imagine.
by rob falgiano
I agree things are going to change rapidly. Heck, they already are. World governments generally react very slowly to changes, so I have some concern that civil unrest will grow while governments lag behind in dealing with the transformation towards the singularity.
by Nicholas Flandry
Thank you Chairman Mao for those insightful predictions. No doubt a well armed state will violently impose these moral imperatives?
by Dunnie
That’s quite an assumption, Nicholas. Nothing will be imposed, just as the ability to copy information, infinitely, without cost, wasn’t imposed: Technology simply enabled it. The consequence of this technology was the end of information scarcity, thus, in monetary terms, the value of information became meaningless.
The same process will happen to all the stuff, all the products, that currently surround you. All the things you pin value to, due to their scarcity, will lose their monetary value. Wealth, as we understand it, will become meaningless.
by John
Man I hope so. The sooner the better because it’s crazy out there. The human suffering that is.
by Carl Brooks
to right, bring it on
by Randy Halsey
Within the science & tech industries we are standing at the threshold of an inevitable tech singularity. The United States of America, the most innovative country to have ever existed will no doubt be the overwhelming benefactor of said event. All countries which merely copy current technologies will no longer be able to remain competitive due to the exponential growth rate and constantly changing traits within these fields. Viva la the United States.
by Carl Brooks
i’m not to sure about ur statement there randy, i’d argue that the British have made a pretty large contribution to “the most innovative country to have ever existed” and without those contributions without those shoulders of giants, where would you be, where would all of us be? i’d also like to make it clear that all the peoples of the world should be the benefactor of said event. you do realise that there are still people on this planet that cant even get a drink of clean water right, cmon the British
by Mr.x
Viva la the united states!?Innovative use of language, indeed. Truly advanced.And you guys are also good at stealing patents (and even scientists) and conducting industrial espionage seems not to be that hard for you either.Take a statistic and you will see that native americans (not the so called indians) are not that innovative.Especially if one considers scale—> 3xx million people.
Some people in the west have a dangerous tendency to underestimate e.g the chinese and to overestimate themselves.Reading American sites one could get the impression that they are the only ones doing research etc, maybe because Asians&Europeans don’t engage in self agrandizing to such an extent.I guess selective perception could explain at least part of it.
by Daniel
Competitive? What will we NEED to compete over? A tech singularity should bring about an economy of abundance, so we should not need to compete for material goods. We still may need to compete for natural resources, though I hope we should be able to reuse enough of what we have already thrown away to build what we really need. Do we compete for ‘cultural’ dominance to make sure everyone follows the same ideology? I doubt that – there is too much diversity in human thought. If we did not have to conform to survive, I think most of us would like to explore different ways of living. I guess we wont be getting rid of ‘competition’, it is to ingrained in the species, but I hope ‘abundance’ will allow us to explore the alternative – cooperation between social groups looking to reach for new goals that benefit humanity.
by Bill
When we ask “where the jobs are” we are really asking how we make sure that through this change people’s standard of living, health and opportunities do not suffer and that life for all continues to improve.
It seems that long term, this will be the case, but I thought it was telling how Vijay shied away from talking about the political aspects. The politics: who has the power to shape policy, how democratic power is distributed, how easily non-powerful, rich people are able to vote or otherwise promote their self interest is crucial.
He says for everybody to roll up their sleeves and be innovators because the innovation won’t take care of itself, well neither will the innovative policies and social ideas. They are essential for creating an environment where innovation can happen with prosperity for all and should not be brushed aside or glossed over.
by Josh
I disagree even if all the plants were ai/ robotically operated and no one had jobs save an elite few the system would collapse.. What’s the point in making things to sell if no one can buy it.. It would eliminate the purpose of having a factory. Plus I think with 3d printing it will decentralize the process you described.. Why would I buy my bicycles from bike corp if I just had to download a plan supply some cheap raw materials.. Ie iron only costs a fraction of a cent per pound… And then print it out at home..
by Luca
If there is only a man owing a plant producing all the goods for a whole mankid of unemployeds, lets put simple: who will buy the goods, the money from where will come out?
Just start a ‘wikiplant’ projects to manage as NGO or an association, spare time of the associates will mantain the roboplants till the last manual job will be replaced by robot.
Capitalistic way of life will be reserved for creative, manual jobs, artists but the nowadays industrial products must be produced and distributed for free.
by Scott V. Brown
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Barlett and Steel was the Pulitizer Prize winning: America: What went wrong?
Buy it now on Amazon for $17.81.
by Gorden Russell
Why is nobody commenting here? This is the coming disaster for all people who work for a living. In six years there will be 18-inch wafers with the processing power of 160 billion human neurons. The human brain has only 100 billion neurons. When manufacturing returns to the U.S. early in the next decade, all the jobs will go to robots. Even the plant manager will be an AI. Only the CEO will be flesh and blood, and he will be an inhuman monster. He will not distribute the prosperity. Have any of you seen the charts for incomes? Since the deregulation of the Reagan Revolution, incomes for the ruling class has increased along a 45-degree angle. Their charts look like the Rocky Mountains. For everyone else during the same time the charts show no increase, incomes have been flat. When you chart the line the graph looks like the Dakota Badlands.
Just last week I read a long article in the Rolling Stone about unemployed people in California who are living in their cars with their children. They are still collecting unemployments benefits, but that only pays half of their working incomes. They couldn’t pay rent and auto payments, so they gave up their apartments and moved into their cars.
There was a segment on 60 Minutes last night that told that there are 16 million American children living in poverty, the greatest number since 1965. The story showed a number of people living in trucks and cars with children, all scared to death that Children’s Protective Services will catch them and put their children in foster homes.
If the Republicans take over the Senate and the White House in the coming election, they promise to cut public housing, even though more and more people are living in the streets. That’s what the Ryan budget is all about, cutting the social safety net and giving the money to the 1% in reduced taxes. People are going homeless so that the barons of the 1% can build bigger mansions and yachts. This new gilded age will lead to great social unrest. And for all this they build statues to Ronald Reagan. He gave the country away to the super-rich.
by Bill
I just posted my thoughts. As to why more don’t, maybe because its a sensitive subject and political and people often bring very ideologically charged opinions with them and the discussion devolves into name calling, strawman arguments and self-serving anecdotes.
I think the number one thing we can all do to move past this is to clarify what exactly are our individual goals. Do we care about prosperity for all first and foremost? Or do we care about maximum freedom for all? Or do we want both at the same time, or some other goal?
Too often these discussions are hopeless from the get go because of participants making the assumption that we all have the same goals.
by Dunnie
Freedom for the pike is death for the minnow…
by Bri
What he said!!!!….. And dats da truth!!!! So few people realize how destructive Reaganomics was and is. So many of his speaches I was throwing an imaginary rubber brick at the TV. People just love him. They aren’t just getting ride of the safety net, they are defunding all the regulating agencies. It’s going to get ugly, but help is on the way.
by Bill
Who’s to say the CEO will be flesh and blood in the future. Maybe he’ll be fired and an AI put in his place. Even if that doesn’t happen, the wealth of the super rich still depends on the purchasing power of the non-rich. Some companies succeed catering exclusively to the relatively well off, such as Apple. But most do not, such as shareholders and executives of Wallmart, Grocery chains, Energy companies, construction companies, social media companies, advertising companies, Amazon, the list goes on and on.
Distributed prosperity is in the self interest of the wealthy, because human consumers are the source of that wealth. But the ideologies get in the way on both sides and confuse the issue. There needs to be more rational discussion showing step by step how we can have it so that we can live in a world where people can still aspire to wealth WHILE people are not homeless. It is definitely not a zero sum game. And either we reach an understanding sooner and experience mass prosperity, or reality has to hit us all over our collective heads, wealthy and poor, and we get there after a rough transition as we move away from the jobs based, mass production, scarcity model.
by Mortran
It has nothing to do with Republicans or democrats. It is going to happen either way. When the day comes that manufacturing goes from China somewhere else, it will be after the singularity. This means no human will benefit from it anyway. If it goes to the US, it will just be good for American robots and the shareholders of American companies, who might be physical persons from China or the Emirates.
The age of humanity is over. No job for a human has any future at all. The only question that remains is how humans will be phased out.