Industry 4.0

Own the robots, rule the world

Wednesday, 9 December, 2015 0 Comments

According to Marx, it’s simple. Ownership of the Means of Production is in the wrong hands and this has led to the class differences that bedevil the planet. Individual ability, religious or cultural factors are irrelevant to the Marxists — all that’s needed is to wrest the machines from the capitalists, give them to the proletariat and the world will be as one. The disciples of Karl Marx have been preaching this “gospel” since the mid-19th century with spectacular calamity for the masses, most recently in Venezuela.

Is there a better way? And if so, who should own the modern Means of Production? The question is increasingly urgent in a world where Google is replacing librarians and professors are being eliminated by massive online courses. As computers and robots eat up the tasks being done by humans, workers need to do something or they’ll end up doing nothing. One solution would see governments taxing the Zuckerbergs and the Musks punitively and redistributing the “take” to the workers, but that’s the Venezuela way. Better: workers own shares in tech firms, have stock options in the AI start-ups and be paid in part from the profits generated by the robotics companies.

Who says? Richard B. Freeman, who holds the Herbert Ascherman Chair in Economics at Harvard University does. Recently, Germany’s Forschungsinstitut zur Zukunft der Arbeit GmbH, better known as the Institute for the Study of Labor and abbreviated as IZA, asked Freeman for his thoughts on technology, work and capital. For the Bonn-based non-profit, Freeman wrote “Who owns the robots rules the world” and in it he argues that the best model is an American one in the form of the Employee Stock Ownership Plans introduced in 1974 and which have since energized a sector that now employs some 11 million workers.

“The EU has endorsed such schemes in its various Pepper Reports and encouraged these forms of organization, though with, at best, modest success,” notes Freeman, ruefully. The continent of Marx is not too fond of worker ownership, unless the state is the proprietor, that is. On the other side of the Atlantic, which remains Marx resistant, despite the best efforts of the elites, Freeman points out that “enough firms in the US have extended some form of ownership stake to their workers that on the order of half of American employees get some part of their pay through profit-sharing, options, or stock ownership.” This is the way forward because, “In the US, at least, people with widely different ideological and economic views find attractive the notion of spreading ownership. One can imagine governments giving preferential treatment in procurement to firms that meet some basic ’employee ownership’ financial standard.”

As we enter the age of Industry 4.0, a priority of every developed economy should be encouraging worker ownership of capital to provide income streams from the technologies changing the world of work. Otherwise, Richard B. Freeman warns: “If we don’t succeed in spreading the ownership of capital more widely, many of us will become serfs working on behalf of the owners. Who owns the robots rules the world! Let us own the robots.” Aye!

Robots at work


Printing, not plastics, young person

Tuesday, 8 December, 2015 0 Comments

This is a post about Industry 4.0, the next Industrial Revolution, in which everything from toasters to thermostats will be connected to the internet. But first, The Graduate, a 1967 film directed by Mike Nichols that tells the story of Benjamin Braddock (Dustin Hoffman), an aimless young graduate, who is seduced by an older woman, Mrs. Robinson (Anne Bancroft), and then falls in love with her daughter Elaine (Katharine Ross). With its air of rebellion and a soundtrack by Simon & Garfunkel, The Graduate captured the counter-culture of the Sixties and is now regarded as a classic. At one point, during a party, this exchange takes place between Benjamin and Mr. McGuire, a businessman, who embodies mainstream society:

Mr. McGuire: “I just want to say one word to you. Just one word.”
Benjamin: “Yes, sir.”
Mr. McGuire: “Are you listening?”
Benjamin: “Yes, I am.”
Mr. McGuire: “Plastics.”
Benjamin: “Exactly how do you mean?”
Mr. McGuire: “There’s a great future in plastics.”

Now, back to Industry 4.0. For Jaime Marijuán Castro, a consultant in the electronics industry, printing is the new plastics. More precisely, 3D printing. In a recent post for IBM’s Insights on Business blog, he placed a wager on 3D scanning and printing:

“This is my favorite and the one I am betting on. It is going to radically change the way products are built and marketed. Imagine 3D print vending machines at your nearby convenience store you can use to produce your own designs in a matter of minutes, or the ability to provide remote maintenance services and delivering a replacement part without shipping it. Some factories are already producing plastic parts with 3D printers but I still think this technology is slow and very limited. It will not reach economic viability before the next 10 years. Modularity, interoperability, virtualization and service orientation are brought in by the 3D tech and — like the autonomous vehicle — you don’t want to be the last exploring its potential.”

Is it a bet worth making? Right on cue, Fortune is reporting that a patent application submitted by Apple shows the company is thinking about 3D printing. Make of note of it. It might be the new plastics.