JimPinto.com - Connections for Growth & Success™
No. 122 : 10 June 2003

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

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Dick Morley on Manufacturing

Inventor, author, manufacturing guru Dick Morley is best known as the as the father of the programmable controller. He is co-author of "The Technology Machine - How Manufacturing will work in the Year 2020". His popular book "Out of the Barn" presents the characteristic Morley humor-with-a-kick and make-you-think challenges.

There is continued backlash about the export of manufacturing jobs to China and India. Here is classic Dick Morley, thinking out aloud on that subject.

Automation is the result (not the cause) of job flight. The idea that manufacturing jobs are somehow "bad" has caused us to replace US jobs with automation. When people insist that there should be an embargo on job export, my question is, "OK, so you want some of your children to work in an assembly plant?" The usual response is, "Oh, God, no!" Well then, whose children do you want working on the automobile assembly line?

US jobs are not leaving - they are being driven out. No community in the US wants a new automobile assembly plant, a printed circuit board plant or a semiconductor manufacturing plant in the area. If manufacturing companies try to locate almost anywhere in the US, they are fined with high taxes, strict compliance regulations an infinite bureaucracy. These are NIMBY rules - "not in my backyard". In the meantime, the environmentalists are happy to see more trees, more green and non-polluting boutiques and shopping malls everywhere.

When Ireland, for example, invites industry with open arms and deferred taxes (eventually collected in full), industry swarms and Ireland thrives. The same with China, Korea and Hong Kong. The manufacturing plants are invited there, and the people are treated as heroes.

In the US, the heroes of our past were Ford, Edison, Steinmetz and people who built large corporations. Today, these are the villains. Bill Gates, in spite of his immense third-world charities and humanitarian efforts, is considered evil. In our soap operas and B movies, the villain is almost always the well-dressed corporate owner who drives a nice car. The hero is the scruffy squatter who is illegally perched on the property, and prevents a thousand jobs from being created through the building of a smoke-spewing factory, or an evil printed-circuit shop.

Manufacturing is the whittling of products from a solid block of metal. There are three classes of manufacturing: subtractive, additive and forming. Much of manufacturing has been historically subtractive and forming. There is no saving of these types of jobs, because there are none left to save. These jobs have, in essence, already left the country.

Today, what we refer to as manufacturing plants are in truth assembly plants. They take parts which are manufactured somewhere else, and put them together into a product. Now, even assembly manufacturing is leaving the country.

Next, let's talk about engineering. Recently, when I went to a conference on CAD/CAM engineering software, I noticed that their business is shrinking. This indicates that CAD/CAM, (the design of complicated mechanical parts) is slowly becoming located in Asia. A decade ago, Hewlett Packard and Microsoft outsourced approximately 30% of their software to places like India, Malaysia, Hong Kong and Russia. This number is closer to 50%. In the US the software implementer, now a B worker, is being displaced - much like the small farmers were in the past and the manufacturing and assembly jobs. The unemployment of higher-skilled people is now much higher than 40%. The reason is that these people don't apply for unemployment; they become "consultants" and change the jobs they do. At the very least, they become "under-employed"

In terms of dislocation in the US, I suspect that our raw manufacturing jobs have left; assembly jobs are leaving, software and mechanical design jobs are beginning to leave. The job outflow is much higher than anticipated.

What are the solutions?

The first: stick to high value. You'll note that Sematech was successful because of its process, not because of its products. Sematech only made one significant device which was a micro-stepper (which was bought by Canon). What happened there was that the engineers found that they could print literally billions of transistors which could be sold as chips worth $100 or more apiece. These were chips for computer systems. In other words, the merging of software into hardware with true benefit and value to the user. That is where we should be. High value works - commodities don't. The trend toward making lower-cost, higher-volume jobs is clearly the wrong direction.

The next solution is to encourage entrepreneurship and talent to thrive in the manufacturing sector. Today, innovation only costs money and has no reward. The recent law suits on intellectual property, and the perceived ideas of openness, has certainly dimmed my own inventiveness and that of many of the innovative people I know. Two things that are left in the US - talent and innovation. These should be encouraged, stimulated and rewarded.

The outlook is not cheerful and the remedies requires significant compliance and social change. Social change, so that the heroes of manufacturing are truly accepted and lauded. Our society must recognize that manufacturing and job creation are not the manipulations of evil corporations - that this is beneficial to society.

Click Read Dick Morley's book - "Out of the Barn":

Click The Technology Machine - How Manufacturing will work in the Year 2020. By : Patricia Moody & Dick Morley

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Reasons for the Iraqi war

President Bush has a serious problem. When he asked Congress to authorize use of American military forces in Iraq, he made a number of unequivocal statements to justify a pre-emptive war. Now many of his statements appear to be false. US intelligence was reporting that there was no direct evidence of WMD. Bush launched the war anyway.

Two months after the war has ended, there is still no WMD and an uproar has erupted on the international scene. In the UK, Tony Blair is in deep trouble. Here in the US, respected news magazines like Newsweek and Time report that some WMD evidence was faked and US intelligence was ignored. But the President keeps insisting that Iraq had WMD and the war was justified. And many people still seem to support him "patriotically" (does that mean blindly?)

Tom Friedman of the NY Times insists (Op-ed June 4, 03) that there were actually 4 reasons for the war: the real reason, the right reason, the moral reason and the stated reason. (Summarized here).

The "real reason" was that after 9/11 America needed to hit someone in the Arab-Muslim world. Afghanistan wasn't enough. We hit Saddam because we could, and because he deserved it, and because he was in the heart of that world. And every neighboring government got the message: "Don't mess with the US!"

The "right reason" was the need to partner with Iraqis, post-Saddam, to build a new, progressive Arab regime. The real threats are not WMD, but the growing number of angry, humiliated young Arabs and Muslims who hate America more than they hate life. Helping to build a new Iraq as a model for others, and solving the Israeli-Palestinian conflict, are the necessary steps for defusing the IDEAS of mass destruction, which are what really threaten us.

The "moral reason" for the war was that Saddam's regime was an engine of mass destruction and genocide that had killed thousands of his own people, and neighbors, and needed to be stopped. We have demonstrated that this reason was indeed justified.

Somehow, the Bush administration felt that it could never win support for the right reasons, and the moral reasons. So, it opted for the "stated reason": that Saddam had weapons of mass destruction which posed an immediate threat to America. Now, if it turns out that the evidence for WMDs was fabricated, that would cause great damage to the US.

Finding Iraq's WMDs is necessary to preserve the credibility of the Bush team. But rebuilding Iraq is necessary to win the real war. The future of the Mideast rides on the building of a different Iraq. That will take time.

Click NY Times - Tom Friedman's op-ed: Because we could

Click Bush Certainty On Iraq Arms Went Beyond Analysts' Views

Click Missing Weapons Of Mass Destruction

Click UK Intelligence threatens Blair with 'smoking gun' over Iraq

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Automation update - weblogs

Here are brief summaries on the automation companies we have been covering. You can read the latest updates, news and views as they come in on the JimPinto.com weblogs.
After Baan was sold for 83.8m ($135m) cash, Invensys shares climbed from a depressed 12p to about 20p, with a sum of the parts (SOTP) valuation of over 30p. In the meantime, CEO Rick Haythornthwaite voluntarily limited himself to a one-month "rolling contract". We were not too sympathetic; he still receives a handsome salary - his total package was 948,861 ($1.5m) in the past year. The one-month contract proves nothing - except perhaps a false sense of "ethics" as he prepares for his next job. He should demonstrate his true fairness by: 1/ Taking a paycut; and 2/ Asking some of his multitudes of Vice Presidents to take "voluntary" pay cuts too.
Siemens & Honeywell:
The news persists that the Siemens will purchase of Honeywell (Industry Solutions). One knowledgeable insider in Europe insisted that it was "a done deal". Honeywell shares fiddled around $25.00, providing CEO David Cote with incentive to DO something.
The news of a big deal between Eaton and Rockwell persists. Now the spin is that Eaton is interested in the Reliance part of Rockwell - and Rockwell would like to sell it. Rockwell's stock was at $24 this week, inching closer to Don Davis' $30' target.
ABB continues to re-structure and sell off non-core businesses. It was recently announced that ABB will reduce employment to about 100,000 by the middle of 2004, which means they will have to layoff about 35,000 people from the present level. In the meantime, Dinesh Paliwal of India is reported to be taking over from Jurgen Dormann as the CEO.

Click Browse all JimPinto.com weblogs & include your own feedback

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Six technologies that will change the world

The world seems stuck in a business recession, sidetracked by fears of terrorism and spreading SARS. But, the wheels of technology keep churning and will continue to yield surprises that will change the landscape.

I like to track technology shifts. Sometimes, it is good to look not only at the immediate future, but at the possible "inflection points" that might change the future. The magazine Business 2.0 recently featured an interesting mix of technologies that are not here yet, but are approaching fast. Here are the 6 technologies they picked as significant:

3D Tissue printers:
Ink-jet printers modified to squirt out "bio ink" cells, living growth tissues, and degradable gel which acts as a scaffold for the cells to rest on as they naturally fuse together into a desired form.
Sensitive robot companions:
MIT's Media Lab has created a robot head that displays a range of facial expressions in response to natural human visual and auditory cues. It maintains eye contact with its human companions and moves with gracefully. The furry, gremlin-like creature has touch-sensitive artificial skin and actually twitches when you tickle its ears, and shyly pulls away if you try to hold its hand.
Supersonic flight with quieter sonic-booms:
Up to now, sonic booms have restricted supersonic jetliners to transoceanic flights. Computer simulations show that dramatically lengthening an aircraft body in proportion to its weight, and reshaping the wings, can quiet the sonic booms. So, supersonic flight may become more common.
Tiny fuel cells:
A new heat exchanger design circulates the intense heat to keep fuel cells working. This could boost cell-phone talk time to over a day, and keep a laptop running for over a day with a shot of butane or propane.
Flexible, paper-thin computer screens:
Organic thin-film transistors built from carbon-based semiconductors to control the pixels in active-matrix displays. These can be printed on a flexible substrate like plastic, to replace traditional displays.
Tiny, cheap sensor robots:
Remember Michael Crichton's SWARM? Well, tiny, low-power radios outfitted with micro scale sensors may become a reality. These "motes" wake up just long enough to send readings to neighboring motes, which pass them along down the mote-chain. The goal is to create mobile micro sensors with tiny versions of motes as distributed brains.

Click Six Technologies That Will Change the World

Click Technologies to watch in 2003 (eNews Jan 10, 2003)

Click New technologies to boost industry out of recession

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Getting more from Google

The JimPinto.com website is grrrowing rapidly. All new articles and eNews get published on the web almost as soon as they are printed or used elsewhere. And the weblogs are attracting a lot of traffic.

Although I get many compliments about how easy the website is to navigate, I also get many emails and questions asking me where a specific item is located. And often it is right there, just a couple of clicks away.

You should know that Google search is available to do a local search on the JimPinto.com website. Just go to the bottom of the homepage where Google is located. Insert your search text in the box, and make sure that the (*)Search JimPinto.com button is selected. Click on Search, and you'll find all instances of your text on the entire website - in articles, eNews, weblogs, poems, whatever. Go ahead, try it!

Google is a triumph of high technology, supreme usability, and hacker chic. You can make it work better by investing a little time to learn a few Google tricks. Here are some tips and tricks from MIT Tech Review columnist Simson Garfinkel to help make YOU a master of the Internet's most popular search engine.

Click MIT Tech Review: Getting more from Google

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Ron Bengtson [ron2010@pacbell.net] agreed with Jim Conoby's characterization of the automation decline, and feels that globalization has been leading the US on the wrong path.
    "We have to view the economy as a type of ecosystem. The extinction of a type of job or industry in our economy may have farther-reaching effects than anyone has imagined.

    "Make a mental picture of what Jim Conoby describes (eNews 21 May 2003), and go back to eNews 20 Jan. 2003 to read the comment by Neil Taylor:

      "Something that I have been feeling for a long time is the un-sustainability of our social and economic model. The premise of the economy is that a country had to grow each and every year to be successful. In the chase for GDP growth, not much concern is given now to physical and mental health of the population."

    "I see a connection between these two comments. I think that corporations are acting on an economic fallacy. Shifting jobs and factories overseas to obtain a competitive edge has short-circuited a natural evolutionary process in technology. Without access to overseas cheap labor, industry and government would have been forced to develop advanced robotics in manufacturing. Yes, robotics are already being used, but without cheap overseas labor, the roll-out of robotics into the manufacturing sector would have been accelerated far beyond what we see today. How would that scenario have effected the Automation and related industries? I'll bet there wouldn't be any "slump"!

    "I believe that if robotics (rather than cheap overseas labor) had replaced manufacturing jobs in the USA, the result would have been more jobs for engineers and higher skilled workers to develop, install and maintain the robotic equipment. And, I believe we would have seen the creation of new industry.

    "The replacement of human manufacturing labor by robotic machines would produce labor force displacement similar to the displacement of farm workers when agriculture became dominated by machines. Farm workers went to work in the factories, and the industrial age was the result of that displacement.

    "If robotics replaced manufacturing labor, those workers would be forced into something new. That would have been the 21st century equivalent to the industrial age. The industrial age wasn't just about machines and jobs; the advance of the industrial age was fueled by consumers' desire for a better life. The "better life" that people in the 21st century can reach for, will be the fulfillment of their emotional and spiritual needs. This would be possible because consumers' desire for material comforts would continue to be satisfied with inexpensive products created by machine labor.

    "If the USA had stayed on course (rather than exporting jobs out of the country), industrial robotics would now dominate American factories, and the new age would have already begun. Then, workers in the new age of the 21st century would be paid well for serving in the new and emerging fields of health improvement (attainment of superior health, both physical and mental, and prevention of poor health that requires medical care). Human spiritual interests and desire for superior health will merge and become the same thing. This convergence would carry into all service fields: Education, entertainment, food services, emergency services, law and order, etc.

    "In this scenario, the majority of people employed in the country would be in the "services" industry, but NOT serving burgers at Macdonald's. These workers would be highly educated and very valuable to whom they are providing service. Thus, they would be highly paid.

    "Because the USA has short-circuited this process by shipping jobs off-shore, the natural transformation of the economy toward the new "Service" industry has not occurred. And, that transformation cannot occur unless the money that has been "exported" with the jobs stays in this country. The economy must be prosperous enough to create a demand for the new services. That isn't going to happen if we are all unemployed!

    "I believe that our country has lost far more than it has gained by allowing Corporations to go outside the country for cheap labor."

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Ted Mohns MD [tedmohns@yahoo.com] insists that ultra-conservatives tend to dismiss new thinking with demeaning pejoratives.
    "The ease and frequency with which some people and publications get unfairly tagged with the dismissive label "liberal" is worth some thought.

    "A core element of conservatism seems, by definition, to be the ideologically-driven bias toward promotion and preservation of sameness. To the extent that's true, it becomes important for conservatives to restrict their thinking (and to the extent possible, the thinking of others as well) to a relatively narrow, pre-conceived dogma and agenda.

    "To the arch-conservative, perhaps the very concept of "news" seems to herald the arrival of unwanted change, causing those bearing the news to be seen as the enemy. Intimidation and censorship may then follow. Dictators, who embody a different form of conservatism, not infrequently censor or shut down news media, snuff newspaper editors, and the like.

    "Recalling Occam's Razor, since liberals are already identified as the enemy, Q.E.D., perhaps people in the news business must also be liberals.

    "Print media in a free society generally reflect open diversity of thought. But that tends to be antithetical to the conservative reflex. The ideologue conservative purports to already know what's right and what's best for all, and may see danger of deviationist change if ordinary folk think and discuss among themselves unduly. Mr.Ashcroft questions the patriotism of those who take issue with President Bush's policies. On the same topic, Ari Fleischer famously said, "People need to be careful what they say."

    "The print media especially also exhibit recurrent infection with that scourge of scourges, the intellectual. To the arch-conservative, "intellectual" is a term of great opprobrium. History is replete with times and places in which enthusiastic conservatives imprisoned or killed as many intellectuals as they could find, as though patriotically ridding the body politic of a plague.

    "Our country was built on tolerance of dissent, the open competition of ideas, examination of evidence, constructive argument, and the will of the majority. We permit that to get shut down, and we're toast!"

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Perry S.Marshall [news@perrymarshall.com] writes:
    "I had just read your eNews item on air travel, when I saw an interesting summary of a new book about the Wright Brothers, in Smithsonian magazine. It was a deeply insightful account of how and why they figured it out first, while many others were trying hard to accomplish the same thing without success. Here are some gems:
    • They got the glider right first, THEN added the engine - almost as an afterthought. Others focused on the engine first, but their aerodynamics were still wrong. (The Dotcom bust was merely a different version of the same thing.)
    • They discovered that nobody at the time really understood how a propeller works - but they eventually figured out that it was the rotary equivalent of a wing. Everyone in the ship business had thought it was essentially a screw in water, which was incorrect.
    • They spent countless hours watching birds in flight.
    • Their commitment to first principles was clearly fundamental to their success.

Click The Smithsonian article (pdf file):

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