Britain poised for third phase of industrial revolution(bsr-russia.com)
bsr-russia.com
Britain poised for third phase of industrial revolution
http://www.bsr-russia.com/en/economy/item/1097-britain-poised-for-third-phase-of-industrial-revolution.html
8 comments
What the article is trying to say is that Britain is once again leading the world thanks to the far sighted, determined and wise leadership of the Conservative Party.
It's a little comical considering that Germany, Switzerland and many others are much further along the way towards a knowledge driven re-emergence of manufacturing that doesn't depend on cheap labour.
Britain is a glorified hedge fund with no manufacturing to speak of.
It's a little comical considering that Germany, Switzerland and many others are much further along the way towards a knowledge driven re-emergence of manufacturing that doesn't depend on cheap labour.
Britain is a glorified hedge fund with no manufacturing to speak of.
I'd say that the concept of our economy as a glorified hedge fund is going a bit too far. Ireland is a glorified hedge fund due to it's tax policies and financial investments. Britain is able to trade on it's asset base which is actually pretty large compared to the likes of Ireland. The manufacturing of which you speak has gone downhill, but given the country's history as the manufacturing powerhouse of the world initially, followed by the dissolution, renaissance and redissolution of it's base I don't see that as a huge problem. The British economy these days is largely a value-add services-driven economy. We don't manufacture because it's cheaper to get other countries to manufacture then develop services on top and make money through arbitrage on the difference. I'm not suggesting this is sustainable but it's the only thing we can do for now to remain competitive.
Of course "glorified hedge fund" is an exaggeration and the UK does have pockets of innovation in industries like biotech. Services is 75% of GDP, 10% of GDP is financial services in the narrowest sense. That's compared to 7.5% in the US and 3.8% in Germany. How much of that huge services sector is linked to financial services? My own observation is that about half of all IT jobs in the UK are related to finance. I think it's fair to say that the value Britain adds to the world economy is dominated by investment banking.
There are historical reasons for that, but the extremely lax approach to regulation plays a huge role as well. The UK is where hedge funds and investment banks from all over the world go to do the most daring kinds of gambles. AIG was the biggest insurer in the world. Their small London office bankrupted the entire company. Why was that office in London instead of New York?
But my point is that any claim that the UK is leading the world in terms of a new type of knowledge driven, highly automated manufacturing model is completely delusional. It just doesn't exist outside of a few speeches David Cameron gave during the election campaign. Britain is not even on the map when it comes to technology.
I don't know if this is a big problem. Maybe the world can sustain a few bloated financial centres and will do so for a long time to come. But if it turns out that finance as a share of world GDP has peaked, then the UK is in a very dire situation, arguably the worst outside if Iceland.
There are historical reasons for that, but the extremely lax approach to regulation plays a huge role as well. The UK is where hedge funds and investment banks from all over the world go to do the most daring kinds of gambles. AIG was the biggest insurer in the world. Their small London office bankrupted the entire company. Why was that office in London instead of New York?
But my point is that any claim that the UK is leading the world in terms of a new type of knowledge driven, highly automated manufacturing model is completely delusional. It just doesn't exist outside of a few speeches David Cameron gave during the election campaign. Britain is not even on the map when it comes to technology.
I don't know if this is a big problem. Maybe the world can sustain a few bloated financial centres and will do so for a long time to come. But if it turns out that finance as a share of world GDP has peaked, then the UK is in a very dire situation, arguably the worst outside if Iceland.
I don't what the article is trying to say either but I wouldn't say that the economy is on the brink of collapse. It's healthy in some parts, and in dire need of direction and help in others. That's from someone working across a lot of industries at the moment.
I have a feeling the 2 ruling parties will work together until the first results of the cuts will come through before the next election, and then both will apportion blame/take credit in a vicious contest.
I have a feeling the 2 ruling parties will work together until the first results of the cuts will come through before the next election, and then both will apportion blame/take credit in a vicious contest.
I would respectfully disagree. As someone who also works across a lot of industries I can tell you that retail has been through various forms of dead for the past two years, banking is recovering from the prior shocks but is pretending it's still ongoing to maximise profits (while in other parts of banking it still is ongoing - e.g. RBS) and the defence industry is about to go south (no falklands reference intended). Anything that sells to government is going to see a big reduction in revenues over the next few years, anything that sells B2C is going to face price pressures too. There's rising unemployment, rising costs despite the massaged inflation figures and credit interest rates are creeping up while saving interests remain locked at rates that destroy wealth.
I think your point about the ruling parties is fine, except there's a bigger problem. We booted the Labour party out, but there's now no opposition. So when the two parties in power apportion blame, there's a very real risk that labour may come back in. If they do I would hope that they are able to put ideologies partly aside and work for the best interests of the country's future, but I'm not convinced they will.
Thanks for your comment though, I appreciate seeing another view of the world on a site like this, where intelligent people can engage in intelligent debate. Thanks for showing me your view of things - we may not agree but I respect your opinion.
I think your point about the ruling parties is fine, except there's a bigger problem. We booted the Labour party out, but there's now no opposition. So when the two parties in power apportion blame, there's a very real risk that labour may come back in. If they do I would hope that they are able to put ideologies partly aside and work for the best interests of the country's future, but I'm not convinced they will.
Thanks for your comment though, I appreciate seeing another view of the world on a site like this, where intelligent people can engage in intelligent debate. Thanks for showing me your view of things - we may not agree but I respect your opinion.
I think your point of view is compelling, it's just that I'm choosing to be optimistic, for all that's worth.
I hope that the nature of the coalition makes them think through some better thought-out economic policies by virtue of having to work together. I have my fingers-crossed but I can understand that this could also end up terribly.
I also totally agree with your point about sharing a different point on things. Your reply certainly has got me thinking.
I hope that the nature of the coalition makes them think through some better thought-out economic policies by virtue of having to work together. I have my fingers-crossed but I can understand that this could also end up terribly.
I also totally agree with your point about sharing a different point on things. Your reply certainly has got me thinking.
The economy here in the UK is on the brink of collapse, as is our government.
Which is exactly when a revolution is likely to happen.
Which is exactly when a revolution is likely to happen.
The idea is that robotic manufacturing would be the next stage of the industrial revolution. Meaning that lost manufacturing jobs are not necessarily a bad thing, but rather a natural procession to more advanced division of labor. Indeed, the focus on "keeping jobs" at all costs may be harming development.
But we could also say robots are a means to evade the uncompetitive nature of the labor market. By adding restrictions, politicians are forcing businesses to shift their manufacturing to automatic processes rather than human laborers. So we have lower skilled people prevented from working (and sometimes from ever gaining employment), expensive high-skilled technicians and engineers and expensive technology. The free market will route against barriers, often with unintended consequences. For now at least, Chinese laborers are a better alternative to autonomous robots.
But we could also say robots are a means to evade the uncompetitive nature of the labor market. By adding restrictions, politicians are forcing businesses to shift their manufacturing to automatic processes rather than human laborers. So we have lower skilled people prevented from working (and sometimes from ever gaining employment), expensive high-skilled technicians and engineers and expensive technology. The free market will route against barriers, often with unintended consequences. For now at least, Chinese laborers are a better alternative to autonomous robots.
> Such has been the success of computer technology that whole swathes of industry (such as book printing, but there are many others) no longer need any workers at all. Everything is computer-controlled, computer-driven. Suddenly there are NO labour costs, so the former advantages of the Third World are being rapidly wiped out once again.
i don't follow how the article goes from this to looking forward to everyone being involved in a 3rd industrial revolution. the conclusion i would draw is that there is an unprecedented unemployment crisis looming.
i don't follow how the article goes from this to looking forward to everyone being involved in a 3rd industrial revolution. the conclusion i would draw is that there is an unprecedented unemployment crisis looming.
i don't follow how the article goes from this to looking forward to everyone being involved in a 3rd industrial revolution. the conclusion i would draw is that there is an unprecedented unemployment crisis looming.
Yes, it does seem that there will be unprecedented unemployment crisis. However, who will buy all the goods that the robot produce?
Moreover, it does seem time and time again that people manages to find work. Some people say there's alway works to do.
Thus, it is imperative that entrepreneurs find new uses for the unemployed masses, educators to reacess how they teach, and so on, to ease the growing pain. Let face it, we don't want to get another Luddite rebellion.
Yes, it does seem that there will be unprecedented unemployment crisis. However, who will buy all the goods that the robot produce?
Moreover, it does seem time and time again that people manages to find work. Some people say there's alway works to do.
Thus, it is imperative that entrepreneurs find new uses for the unemployed masses, educators to reacess how they teach, and so on, to ease the growing pain. Let face it, we don't want to get another Luddite rebellion.
> However, who will buy all the goods that the robot produce?
absolutely, that's part of the problem.
> Moreover, it does seem time and time again that people manages to find work. Some people say there's alway works to do.
the vast majority of unemployed people will not "find work". they will be "given work" by other people who are in a position to take advantage of them.
if the benefits of automation aren't socialized you can count on increasingly sadistic ways of "putting people to use".
absolutely, that's part of the problem.
> Moreover, it does seem time and time again that people manages to find work. Some people say there's alway works to do.
the vast majority of unemployed people will not "find work". they will be "given work" by other people who are in a position to take advantage of them.
if the benefits of automation aren't socialized you can count on increasingly sadistic ways of "putting people to use".
the vast majority of unemployed people will not "find work". they will be "given work" by other people who are in a position to take advantage of them
I think you're basically right; it's already happening on a large scale with lower skilled jobs. Over the last few years lots of employers have switched to hiring people on short-term contracts and getting rid of them before they become entitled to redundancy pay.
About two years ago the benefits system was struggling to cope with this. A person would be claiming JSA, get a job and stop claiming, then get let go after a few months and replaced with another cheap unemployed person. They would then have to make a new JSA claim. I think the result was an increased load in new benefits claims and delays in processing them.
This way of conducting business is pretty bad imo - it just screws poor people. But there are some good things happening too - especially with trying to lower the cost of public sector employees (see the example on TV yesterday of forcefully retiring police officers with 30+ years service to reduce high salaries and pension contributions).
I think you're basically right; it's already happening on a large scale with lower skilled jobs. Over the last few years lots of employers have switched to hiring people on short-term contracts and getting rid of them before they become entitled to redundancy pay.
About two years ago the benefits system was struggling to cope with this. A person would be claiming JSA, get a job and stop claiming, then get let go after a few months and replaced with another cheap unemployed person. They would then have to make a new JSA claim. I think the result was an increased load in new benefits claims and delays in processing them.
This way of conducting business is pretty bad imo - it just screws poor people. But there are some good things happening too - especially with trying to lower the cost of public sector employees (see the example on TV yesterday of forcefully retiring police officers with 30+ years service to reduce high salaries and pension contributions).
I think the police force example highlights a truth: once you hit about ten years work, your salary proportional to your skill keeps climbing steeply, but in reality your skill level doesn't really change that much any more.
>the vast majority of unemployed people will not "find work". they will be "given work" by other people who are in a position to take advantage of them.
That's of course, when only industrialization is the only factor. When you factor in all the other technological factors and social trends, the picture will begins to look different, if not radically so.
That's of course, when only industrialization is the only factor. When you factor in all the other technological factors and social trends, the picture will begins to look different, if not radically so.
Please to elaborate on these "other technological factors and social trends." If there's too much panic on one side by those who are losing their jobs, there seems to be a great deal of hand waving and talk about "other factors" by those who are less affected by these "trends".
The Flynn effect trend seem to indicate that the population is getting smarter over time. However, it would probably only slow down the loss of jobs. Unless, IQ increase dramatically.
Than there's the emerging invisible economy in which everything is determined by supply & demand, but also contracts that are per se, not "enforceable", and where reputation matters. That where people can find jobs in spite of the structural deficiency in the wider economy that forbid the price floor for labor to drop to where it needs to be. They are happening now.
But there's the past record in which new jobs are created out of jobs being eliminated by robots. There are demands for humans to program them, probably repair them, and so on. It might happen again with this process of industrialization.
There's another factor: prosthetic that effect a superhuman attribute or merging of humans into machines. It seem to take forever right now, though. This could be simply be our linear point of views, but not the actual development rate.
But then again, whether or not we have jobs in the future is not determined by what arguments I make, but of the facts.
Than there's the emerging invisible economy in which everything is determined by supply & demand, but also contracts that are per se, not "enforceable", and where reputation matters. That where people can find jobs in spite of the structural deficiency in the wider economy that forbid the price floor for labor to drop to where it needs to be. They are happening now.
But there's the past record in which new jobs are created out of jobs being eliminated by robots. There are demands for humans to program them, probably repair them, and so on. It might happen again with this process of industrialization.
There's another factor: prosthetic that effect a superhuman attribute or merging of humans into machines. It seem to take forever right now, though. This could be simply be our linear point of views, but not the actual development rate.
But then again, whether or not we have jobs in the future is not determined by what arguments I make, but of the facts.
> Unless, IQ increase dramatically.
100 IQ is defined as the average in the population under study, therefore increase / decrease is impossible.
100 IQ is defined as the average in the population under study, therefore increase / decrease is impossible.
>100 IQ is defined as the average in the population under study, therefore increase / decrease is impossible.
By our standard, most people 100 years ago would be classified as retarded. Thus, what I meant by increase in IQ is in relative to past populations.
An errors? Perhaps, but that's nitpicking.
By our standard, most people 100 years ago would be classified as retarded. Thus, what I meant by increase in IQ is in relative to past populations.
An errors? Perhaps, but that's nitpicking.
I would say that "smarter over time" is the wrong conclusion of the Flynn effect.
Indeed, the picture does look a little different... it looks like people will not be "given work," either.
"other factors and social trends" is completely abstract to me. can you give me concrete examples?
The alternative to being taken advantage of is not-working. If it's illegal even to be taken advantage of, it's illegal to work.
Strictly speaking, there is always more work to be done.
Strictly speaking, there is always more work to be done.
Well, if somebody offer you a job for a pitiful wages, along with food and shelter. Without it, you will die. Would you take it? Or would you not?
Is it really being "taken advantage of"?
Moreover, if the new economy mean you can afford more stuff, are you really being taken advantage of?
I find it presumptive for me to judge a relationship between a wealthy capitalist and the employee no matter how right I might be. For whatever reason, the employee agree with the capitalist to do X work and be compensated Y stuff.
What the use of having the right to self-determination if other people decides your boss shouldn't be allow to make a voluntary contract with you.
Perhaps, "fairness" is much higher than the principle of voluntarism?
Is it really being "taken advantage of"?
Moreover, if the new economy mean you can afford more stuff, are you really being taken advantage of?
I find it presumptive for me to judge a relationship between a wealthy capitalist and the employee no matter how right I might be. For whatever reason, the employee agree with the capitalist to do X work and be compensated Y stuff.
What the use of having the right to self-determination if other people decides your boss shouldn't be allow to make a voluntary contract with you.
Perhaps, "fairness" is much higher than the principle of voluntarism?
I used to own one of these http://www.panasonicfa.com/?id=TAWERS and it did not replace the worker. It did make him twice as productive with better quality, but he still had to load and unload it. The machine cost $1600 per month on a lease, so it wasn't 'free' either. It also took someone with programming skills to get it going, which again was not free. So while I am a big fan of automation, the thought that it is free and requires no workers is a fantasy.
I disagree. It very much looks like most or all western countries are about to follow Japan's track of long decline.
An important missing part is also energy availability : See this for instance: http://netenergy.theoildrum.com/node/7069
An important missing part is also energy availability : See this for instance: http://netenergy.theoildrum.com/node/7069
What was the winning strategy in Japan? Can you recommend something to read about how the people who _are_ succeeding in Japan are doing it, and which strategies they are following?
Anyone who would know what would be a winning strategy for Japan right now would be rich quick :) Japan after roaring 80s and a huge real estate boom, crashed in 1990 and never recovered. The last numbers are really frightening, see http://dl.dropbox.com/u/6010227/Webshare/China%20Japan%20Pre...
The first 40% of the article started out OK actually.
Then it goes to pot and turns into some sort of political rant which some point I don't understand.
Also, what BS about worker-less automated factories. Has he even seen high tech factories? They will still need workers for many years to come. And anyway, these factories are more likely to be in the BRIC and other low cost countries still.
A flurry of these factories firstly are not coming to the UK and secondly (if they did) are not likely to bring the UK back to relevancy.
Then it goes to pot and turns into some sort of political rant which some point I don't understand.
Also, what BS about worker-less automated factories. Has he even seen high tech factories? They will still need workers for many years to come. And anyway, these factories are more likely to be in the BRIC and other low cost countries still.
A flurry of these factories firstly are not coming to the UK and secondly (if they did) are not likely to bring the UK back to relevancy.
If Britain can drive costs down by automating factories, then I'm sure China can, too. They have a lot of skilled people, they've proven their willingness to invest big money on manufacturing, and unlike Britain, China actually has a credible plan to deliver cheap electricity over the next two or three decades. Oh, and they have cheap labor to fill in the gaps where you still need people, which is another plus.
I get what you're saying about energy costs, but I'm not as convinced. We (first-world) got a lot of cheap manufacturing inputs because we ignored (i.e. passed on to next generations) some of the costs of energy, namely pollution and water use in coal. One of the reasons we were able to do that in the 50s and 60s is that we hadn't really convinced ourselves it would be as bad as the environmentalists said, so we ignored it.
China won't be able to pass those externalities on to future generations as we did. The reason is that we serve as an example of what happens when you do ignore the full cost of energy generation, and there is already significant local concern about pollution from unrestricted manufacturing and energy generation.
I think China will not have the luxury that we had of several decades of ignoring some hidden input costs. They will be forced to implement full environmental impact controls which will drive up energy costs.
They do have some dam projects for hydropower generation left to bring online, but I can't see any really major projects being implemented after that. Then there's nuclear, about which I don't know.
China won't be able to pass those externalities on to future generations as we did. The reason is that we serve as an example of what happens when you do ignore the full cost of energy generation, and there is already significant local concern about pollution from unrestricted manufacturing and energy generation.
I think China will not have the luxury that we had of several decades of ignoring some hidden input costs. They will be forced to implement full environmental impact controls which will drive up energy costs.
They do have some dam projects for hydropower generation left to bring online, but I can't see any really major projects being implemented after that. Then there's nuclear, about which I don't know.
He would have made a better argument by using ARM as an example of developing British IP and licensing it to others to manufacture.
I don't see this revolution in the UK. There's a fair old bit of unemployment, nobody wants to spend money and interest rates are so low that any savings are being pretty much destroyed. Add rising prices for common things like food and petrol and you're not really creating the conditions for an industrial revolution.