JimPinto.com - Connections for Growth & Success™
No. 292 : 10 March 2011

Keeping an eye on technology futures.
Business commentary - no hidden agendas.
New attitudes, no platitudes.

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Technology Eliminates Work & Workers

The stock market is up again. The Fed says the "recession" is over. There was big news that unemployment is inching back below 10%.

Everyone wants to return to the "good old days" of full employment. No one wants to take a pay cut. But here's the difficult truth. The current recession is not just a temporary thing - it is a radical shift in the structure of our economic way of life.

Automation technology continues to reduce human work, physical and mental, in the production of goods and services.

Automation started in manufacturing, but continues to expanding into most other arenas. Telephone operators have been replaced by automatic switchboards; secretaries by answering machines; clerks by computers. Medical records are kept with much greater speed and accuracy by automated systems. ATMs have almost eliminated the need to visit banks during working hours. Today, you don't even need to put your check in an envelope for ATM deposit - you can simply take a picture with your smart-phone and send it to the bank.

Automation is eliminating manufacturing jobs everywhere in the world. In the first decade of this new millennium, about 3 million factory jobs were eliminated, about 30% of the workforce, supposedly to compete with cheap foreign labor. Here's the point: Those jobs are NOT coming back, and it has nothing to do with the cost of labor.

Automation technology continues to eliminate the need for workers. Productivity increased about 9% in 2010, the biggest gain in 20 years. Investments in automation technology (beyond just manufacturing) increased 15%, as most companies pushed to do more with less.

Well-managed companies don't want to hire people and then lay them off again. They keep looking for high-tech ways to do more with less. During the recession, productivity gains allowed many companies to maintain, or even increase profit margins, as revenues decreased. Companies who laid off thousands of workers have learned to use existing technology more effectively, to have "lean" operations. Production lines produced faster, with fewer people.

Here are some facts: Manufacturing profits rose above $122 billion during the last quarter of 2010, the highest for any quarter since 2006, with 2.4 million fewer employees. Many companies don't really want to hire again, even as profits increase. Since the start of the mooted recovery, manufacturing jobs have increased, but only by about 5% of the 3 million jobs lost since the decline. Factories won't get back to pre-recession employment levels for a decade, if ever.

Chronic unemployment is facing not only the US, but Europe as well. Off-shore-manufacturing is NOT to blame - even China is reducing their labor workforce. Industrial work is increasingly done by machines, which produce cheaper, faster and better.

The prospect of employment will continue to diminish for a large percentage of the population. Current thinking is simply looking in the rear-view mirror - let's get back to the good old days of full employment. We are not really considering solutions for the new era, where there is no more "work" work.

Click Newsweek - Rise of the Machines

Click Hospital To Lay Off Workers, Hires Robots Instead

Click Is IT Investment Hurting US Job Growth?

Click Technology Explains Drop in Manufacturing Jobs

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No more Work - the disappearing middle-class

Our old ideas of "work ethic" are disappearing. In the future, how will "work" be defined? What fraction of the population is capable of finding reasonably-paid, meaningful work?

Today, there are lots of jobs in high-technology and high-end health care. And there are lots of needless and costly bureaucratic jobs, subsidized by declining tax revenues. And then there are menial, low-paying service jobs (house-cleaning, lawn-mowing) which are not considered worthwhile, but are still the only way left for some people to make a living.

The gap between the "rich" and the middle-class will continue to widen. A small percentage of the population owns the wealth, and a steadily reducing number of people are needed for its continuance - for the "production" of goods and services which only the rich can afford.

Communism collapsed twenty years ago, making way for the apparent triumph of capitalism and "free" markets. Now capitalism is moving rapidly to profit from automation technology, leaving "the masses" with really very little to do. The old definition of "working for a living" is disappearing. There just won't be any suitable "work" left for most people, no "gainful employment". On our present path, improvements in the standard of living for the majority will never be accomplished.

In the old consumer economy, well-being and a sense of satisfaction were tied to purchasing and owning. The "American dream" of owning a home came from gainful employment, largely from "producing" goods and services. But, that is declining steadily. And what will be left?

The old notions of individuality and freedom within political and social organizations will become increasingly dysfunctional. As misery grows, the resentment against privilege and individuality will increase. We will face more absolutist theocracies and dictatorships.

The political parties are increasingly frustrating their followers by naming impractical ideals (lower taxes, reduced deficits, full employment) that are contradictory. These are conundrums that cannot be solved.

Public employees are going on strike against pay cuts which deficits demand. Unions are powerless to help labor that is simply not needed. Solutions won't come from old myths which cause conflict against mirrors of ourselves. We have met the enemy, and it is us.

New paradigms are demanding new answers. I remain optimistic that human ingenuity and persistence will generate new solutions.

Click Redefining "Meaningful Work"

Click The Disappearing Middle Class

Click The Collapse of the Middle Class

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Smart Manufacturing Leadership Coalition

Yes, many Americans are recognizing the disappearance of old-style manufacturing, and are doing something about it, with government involvement. Will it make a difference?

The Smart Manufacturing Leadership Coalition (SMLC) is a public/private partnership program to revitalize US manufacturing. This includes manufacturing and technology companies, government labs and research universities which will lead the actions necessary to ensure US global competitiveness.

The aims of SMLC are to dramatically intensify application of manufacturing intelligence in enterprise operations, control and decision-making using data analytics, modeling and simulation. They will address the use of manufacturing, energy usage, environmental sustainability, product safety, and the re-emergence of sustainable US manufacturing jobs.

SMLC has three program principles:

  1. Manufacturing data is the essence of manufacturing intelligence and needs to be sensed, more easily collected, consistently defined, managed as an operating asset, and selectively shared among companies.
  2. Broadly accessible core modeling and simulation capabilities and capacity need to be developed through a facilitated community source approach for contribution and validation, sharing through standardized approaches, and low barrier accessibility to small, medium and large enterprises.
  3. Meaningful Use is defined in terms of energy, sustainability, Environment, Health and Safety, economic and jobs performance and flows from agile, demand-driven supply chains, enterprise optimization and sustainable production.
Recognizing that Manufacturing is critical to America's long-term economic competitiveness, government funding of $150 million over three years, with industry co-investment, will solidly launch this public-private partnership program. It will build a critical mass of industry involvement, capturing and applying manufacturing intelligence with substantive demonstration projects.

It is not enough to invent new technologies in America; we must also invest in the ability to manufacture those technologies. The "Framework for Revitalizing American Manufacturing" is a comprehensive plan which includes the improvement of education, transportation and stable capital markets. It is a comprehensive approach that can unleash the next generation of industrial productivity and innovation for the 21st century, transforming manufacturing plants, their supply chains and the entire industry.

Click Smart Manufacturing Leadership Coalition to revitalize US manufacturing

Click Draft Manifesto from the Smart Manufacturing Leadership Coalition

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Web Media Boosts Automation Knowledge

Education is not keeping up with today's speed of technology change, causing a growing skills mismatch in the industrial automation arena.

Today, individual skills are bolstered and expanded through specialized groups within social networks, many organized specifically to share automation knowledge.

Most engineers join automation special-interest groups on Twitter, Facebook, LinkedIn and the like, sharing questions, problems and solutions with the automation community at large. It's amazing how quickly multiple responses arrive, from people who have applicable knowledge or experience. The productivity results are significant.

This type of knowledge can also be accessed "on the fly" with smart phones and iPads. Engineers and technicians talk through problems and solve each other's issues using words, images and video. Indeed, many factories and process plants are providing iPads and equivalents to their engineers and technicians for just that purpose.

Most automation suppliers and end-users have started to leverage social media to connect with the worldwide industrial automation community in a variety of ways, ranging from online forums, wikis and communities, to blogs and micro-blogs. Designed to foster interactivity, forums and wikis provide for sharing of industry information and a platform for Q&A discussions.

This type of media interaction is bringing major shifts in learn-shop-and-buy behaviors for customers. It is a practical approach to leverage valuable market insights that have previously been difficult to find. It also helps suppliers to monitor and listen to customer conversations, yielding a clear understanding about what they are talking, who influences them, what interests them, what motivates them and what drives their behavior. Ultimately, these new mechanisms provide the insights necessary to identify new opportunities and develop creative strategies that provide sustainable competitive advantage.

Collaboration and innovation happen when people get together and feed off one another, adding to each other's ideas and seeing problems, solutions and opportunities from different angles.

Conventional engineering education is becoming outdated; social media provides and enhances up-to-date knowledge and gets results.

Click Automation World: Web Media Boosts Automation Knowledge

Click Social Media Marketing Truly is Everywhere

Click Social Media Marketing by the Numbers

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Frank Williams starts Global Marketing

My long-time friend and colleague Frank Williams joined Action Instruments (the company I founded) as a young man (he was employee #7) and ended up as President when I retired some 30 years later. When he left Action, he became CEO of the industrial wireless leader Elpro Technologies, which was acquired by MTL and then Cooper Industries.

Frank is one of the best Marketing people I know. He has just exited Cooper to start his own new business which provides strategic business marketing advice for companies in the industrial automation arena.

Frank writes:

    "Businesses today face more challenges than ever. What companies did right for their customers last year, last month and perhaps even last week, is most likely obsolete.

    "Technology is assaulting every aspect of your businesses' marketing mix - price, promotion, product, and place. Global competition lurks behind every account and around every opportunity. Your firms go-forward business strategy requires thoughtful consideration, and a plan to address today's fundamental changes."

With this backdrop Frank Williams has announced the formation of Global Marketing, Inc. With breadth and depth of knowledge in the industrial automation arena, working with senior, decision-making executives, his company is ready to work with you.

If you have marketing challenges (and who doesn't?) you need Frank Williams to get involved. Global Marketing will advance your company's market penetration and accelerate performance in global growth markets.

Hey, you've just gotta view Frank Williams' series of videos on creative marketing, "Marketing Minutes". That'll get you hooked.

Click Marketing Minutes - How to Sell at higher prices

Click Visit the Global Marketing website

Click Follow Global Marketing on Twitter

Click Follow Global Marketing on LinkedIn

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Jake Brodsky [jakebrodskype@gmail.com] doubts Ray Kurzweil's futurist extrapolations:
    "Every generation has had its star futurist. Alvin Toffler was popular in the 1970s. How well does his stuff hold up today? Well, at least he was smart enough not to write so specifically as Kurzweil does.

    "Kurzweil has discovered the fantastic predictions one can make using semi-log and log-log scales. However, just as they say on Wall Street, 'past performance is no guarantee of future results'. Wall Street chartists (a religion and investment strategy I do not subscribe to), often do exactly what Kurzweil has done and they often get things spectacularly wrong.

    "Personally, when discussing where the state of the art will be in the future, I think it best to look squarely at the known science, and the technologies currently in use, not the trends.

    "Oh, and by the way, did I mention that I don't think much of Moore's 'law'? Just because it seems to work doesn't mean it's a good predictor of performance."

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Rob Henley [rob.henley@ioselect.com] President of up-and-coming IOSelect resonated with my iPad reflections:

    "Got a smile on my face seeing that you (too) have been sucked into the Apple ecosystem. I couldn't help but reply.

    "Ever since I bought my first iPhone and AppleTV several years ago I have been caught on the technology treadmill that Apple manages better than just about anyone. (Maybe that's why the Apple stock I bought around the same time as that first iPhone has grown more than 600%)...

    The experience and content Apple provides is awesome. I am now getting ready to order my new Macbook Pro with 512G of solid state disk, 8GB RAM and a quad duo processor - that provides 'instant on' booting up. I will then take my entire hard drive (250G or so) off of my Dell Latitude and create a VMware file that actually runs faster on the Mac. Then slowly I will wean myself off of Windows and MS apps altogether, but keep a dual boot function just in case.

    "Having a Mac in the office I already know the benefit of Adobe Creative Suite on the Mac, and music/video development and management superiority of the Mac - what's left other than being able to run business and engineering apps - that I plan to do less and less of over time anyway?

    "Indeed, I am (again) hooked on Apple..... and have come full circle since that time I got my first computer - an Apple II paid for by Action Instruments - in 1980....

    "So now I do have a new dilemma: Do I watch movies on the plane with my new Macbook Pro on the 1650x 1050 pixel HD screen or on my iPad due to it's size. And when does my iPhone get replaced as a 'smart device' by my iPad, and I just use the iPhone as a phone... I still need to take 3 things with me when I travel (*&#@) due to content and application functionalities (serial ports, etc.) - but I see this all changing soon with WiMedia becoming the PAN wireless standard (replacing Bluetooth), WiMax becoming the 4G (for free) that attacks LTE and the carriers, and Thunderbolt I/O replacing USB/Firewire/and all other slow device I/O technologies, with deterministic Ethernet running at 1TB and remaining the enterprise standard.

    "Sounds long term - but on this treadmill I'd say that soon the 'i's' will have it.... Enjoy the ride!"

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My sister Loretta Pinto [lorettadpinto@gmail.com] in India wrote about Joel Kotkin's discussion on changing family values in America:

    "I liked what you wrote about how the family has changed in the US. It's nice to know that grand parents have a place with their children and grand children.

    "My friends in N. Dakota, all of my friends have such large families and they are all so close. I realize that rural areas are different in America, and my friends are all very rural! But it's nice to think that more of America is like that."

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