The next industrial revolution

Employment & Income31 Jul 2014Julie Madigan

There are significant changes in both the global economy and the technological landscape that will dramatically shape employment in the manufacturing sector in the near future. A couple of trends that are described below are now converging. They are leading towards boutique local manufacturing.

These combined changes will bring big challenges for governments, ranging from how to manage the skills gap, to increased capital investment, applied research and agile and adaptable policy. The skills gap is the most pressing issue in the UK. A recent government study reported a need for a further 800,000 people to enter the manufacturing sector to simply maintain the current contribution of manufacturing to GDP to 2020.

If we are to grow the manufacturing sector and exploit the opportunities this new area brings, what levels of skill will be needed and how will this be achieved? Perhaps a more radical approach is required. The skills shortage and lack of entrants to the manufacturing sector are happening at a time when the sector is due to boom.

The following key trends signal the movement towards boutique local manufacturing:


The global economic trends reflected in the ongoing banking crisis, the scale of sovereign debt, an ageing population of baby boomers, the cost of healthcare and the implications of high levels of long-term unemployment – especially for young people in many of the developed nations – are generating serious questions about current models of consumption and employment, and this will impact those who manufacture goods and deliver services. This is particularly the case for generations Y and Z, the first of the full internet generation, who have different expectations in these areas.

Resource scarcity and the environment

Increasing input and landing costs have significant implications for today’s complex, and often lengthy, global supply chains. There are also mounting concerns around environmental sustainability.

The digital revolution

The digital revolution continues apace, reflected in the products and services that continue to appear in our everyday lives – smarter, cheaper devices and applications through to the growing impact of artificial intelligence and robotics. We have seen millionaires created in less than six months using community digital fabrication laboratories in the UK. Ideas, prototypes and funds can be achieved quickly.

We can now see the growth of the digital revolution into processes that connect the virtual to the physical world. Typically these have evolved in the last two decades from standalone developments in computer aided design to machine controlled codes for manufacture – computer aided manufacture. These technologies are now being simplified, with closer integration resulting in lower costs and ease of use.

With digital fabrication a new branch of industrial design is emerging by resolving the issue of how complex configurations can be made from simple repeatable structures that can be joined or un-joined.

Finally, the game changer will arrive with digital materials that can configure themselves into specified 3D shapes in much the same way as a string of amino acids can create a complex and highly specific protein structure in nature.

Impact on employment

The next phases of growth in the digital arena will have far-reaching effects on white collar, professionally-based service industries within the next few decades. Nevertheless, current high volume manufacturing will not be replaced in the near future by digital manufacturing and in particular additive manufacturing. Technology and cost still limit these processes to very low volume, high value manufacturing and prototyping. Based on current technologies and research it is highly unlikely that additive manufacturing will be cost effective for volume manufacturing within the next 10 years.

The ‘democratization’ of design and manufacture

However digital and additive manufacturing are providing new opportunities for customized, personalized and bespoke ‘designer’ products due to their low batch size efficiency. Open innovation trends fuelled by open source design and software coupled with cost reductions in machinery and the emergence of global networks sharing know-how and innovation capability will lower the barriers to entry to manufacturing. This is being referred to as the next industrial revolution. It will help generate a much larger number of smaller manufacturing businesses which will result in a greater number of manufacturing jobs. This knowledge-based economy will play into Europe’s capabilities of design and innovation and so increase Europe’s competitiveness against the Far East.