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Automation: Tomorrow's Manufacturing?

By: Ian Campbell | Friday, February 8, 2013

There is more and more discussion of technological change, automation, and what is often resultant labour hour (and hence employee) reductions.

For historic interest you might want to read Arguments For and Against the Use of Machines, an article that reproduces:

As but one example of ongoing technological change discussion, I suggest you read The Next Industrial Revolution will be Led by Robots written by Gregor Macdonald. I have not met or spoken with Mr. Macdonald, but have periodically have read articles he has written over the past five years. He strikes me as a sound 'somewhat out of the box' thinker whose ideas generally are well worth thinking about.

Occasionally when I reference an article in my commentaries I add the words 'thinking time much longer'. Today, if you read this commentary, I suggest you take the time to think carefully about the implications and consequences of what is discussed.

Subsequent to 1790 the industrial revolution eventually created a large number of jobs that we would think of today as largely 'manual labour' type jobs. Mr. Macdonald suggests that two landmark periods/events have marked important thresholds in manufacturing - and importantly, in employment of manufacturing labour:

In summary, Mr. Macdonald suggests large numbers of technically proficient robots will trigger the next 'industrial revolution', and the consequences of that will include:

So far so good. That all makes sense to me, and the first and last of those four things have been said by me in recent Newsletters. Frankly, I had not focused on either 'possible lower manufactured product selling prices' or the possible long-term affect on the 'low labour rate developing countries (read China) until reading Mr. Macdonald's article.

Mr. Macdonald also suggests that further consequences of manufacturing automation include:

There is a great deal to think about here. Some observations, all of which I think are important:

Topical Reference: Arguments For and Against the Use of Machines, from Economist's View, February 5, 2013 - reading time 6 minutes. Also read The Next Industrial Revolution will be Led by Robots, from OilPrice, Gregor Macdonald, Feburary 7, 2013 - reading time 5 minutes.


Author: Ian Campbell

Ian R. Campbell, FCA, FCBV
Business Transition Simplified

Through his website and his Business Transition & Valuation Review newsletter Ian R. Campbell shares his perspectives on business transition, business valuation and world economic and financial markets influences on those two topics. A recognized business valuation and transition authority, he founded Toronto based Campbell Valuation Partners Limited (1976). He currently is working to bring his business valuation and transition experience to both business owners and their advisors in our new economic, business and financial markets normal.

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