It looks like someone linked you here to our printer friendly page. Please make sure you go Back to Safehaven.com for more great articles just like this one!

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
Economic Straight Talk

Through the Economic Straight Talk Newsletter Ian R. Campbell shares his perspective on the world economy, the financial markets, and natural resources. A recognized business valuation authority, he founded Toronto based Campbell Valuation Partners (1976), Stock Research Portal (2007) a source of resource companies market data and analytic tools, and Economic Straight Talk (2012). The CICBV* annually funds business valuation research in his name**. Contact him at icampbell@srddi.com.
* Canadian Institute of Chartered Business Valuators
** through The Ian R. Campbell Research Initiative

The full version of The Economic Straight Talk Newsletter is published each trading day. To get your Free 14-day trial subscription, visit economicstraighttalk.com. No obligation or credit card required.

Informed Investors are Successful Investors

Comments and opinions expressed in these commentaries are those of the authors. They do not constitute individualized investment advice, are provided "as is", may change without prior notice, and are used at your own risk. The information and content provided or referenced may be incomplete, inexact, or incorrect. Your use of these commentaries is subject to the Economic Straight Talk Terms of Use and Legal Disclaimer

Copyright © 2011-2013, Stock Research DD Inc., all rights reserved