keith_larson1
keith_larson1
keith_larson1
keith_larson1
keith_larson1

Life on the Edge of the Idea Economy

Feb. 5, 2008
Automation Professionals Will Be the Agents and Enablers of the Transition to an Economy Based on Ideas and Information
By Keith Larson, VP Content

For much of the twentieth century, those world economies that are now said to be “developed” transitioned from a central focus on agriculture to a central focus on manufacturing and industry. It’s not that agriculture went away. Rather, it gradually lost its position as the dominant employer and primary focus of effort for developed economies.

Farms in the U.S., for example, now produce far more food than they did a hundred years ago, but do so with only 2% of the nation’s workforce, compared with 40% at the beginning of the 20th century. The growing ranks of engineers and other technologists through much of the last century—most likely including you, if you’re on the receiving end of this article—both enabled by and were the result of this inexorable shift.

Today, however, as the importance of information and ideas has become more central to economic growth, manufacturing in the U.S. and other developed economies finds itself on the short end of the demographic stick. “Over the past half century, the increase in the value of raw materials has accounted for only a fraction of the overall growth of U.S. gross domestic product,” notes Alan Greenspan, former chairman of the U.S. Federal Reserve Bank, in his treatise The Age of Turbulence: Adventures in a New World. (A read I wholeheartedly recommend, by the way.)

“The rest of that growth reflects the embodiment of ideas in products and services that consumers value,” Greenspan continues. “This shift of emphasis from physical materials to ideas as the core of value creation appears to have accelerated in recent decades.”

Within a global economic context, Greenspan further pegs the potential for ongoing growth in the U.S. to the continued “conceptualization” of its economy. Apple’s premium stock price, for example, isn’t based on the manufacture of iPods and iPhones—that’s outsourced to China—but on the innovations they embody.

As farming before it, manufacturing has embarked on a long, steady fall from prominence in the world’s leading economies. It won’t go away, of course, but like farming before it, manufacturing proper appears forever destined to account for an ever smaller slice of the total economic pie.

I don’t mean for this prognosis to sound downbeat. Rather, I think it’s a huge opportunity for automation professionals.

One need only think as far as John Deere  and other farming mechanization pioneers to realize there were some big winners in facilitating the shift away from an agricultural economy in the U.S.

Indeed, today’s automation professionals are at an analagous interface between the “old” manufacturing economy and the “new” one of ideas and information. As the John Deeres of your day, you will be the agents and enablers of this next transition.

You will forge the links between the computer-based manufacturing control systems that manipulate the physical world and the information systems that embody and facilitate the execution of business ideas.

Your ideas will continue to make manufacturing more efficient and more productive, while simultaneously freeing many workers from repetitive and often stultifying tasks in favor of more productive pursuits. (In some cases, of course, redeployment will be painful, but as Greenspan notes, it is this willingness to embrace a certain level of creative destruction that is key to continued economic progress.)

Sure, a lot of baby-boomer automation professionals are poised to retire, but I think you can count on the proliferation of communication technologies to leverage the ideas of those of you who remain across a larger manufacturing base, further improving overall economic productivity. And, who knows? With supply and demand working as it does, rising demand just might result in a bit of an overall boost to your own bottom line.