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Insight: 2034 - the next 50 years.

In this, our 50th anniversary issue, we depart from our usual format of articles describing today's technology of metalworking manufacturing in order to look at tomorrow's manufacturing enterprises. Our theme, INSIGHT:2034, infers we will predict what shape industry will be in by the year 2034. That would be extremely difficult. The more practical reality is that some rather profound changes will take place long before then. In the following pages, we explore these changes and the significance they hold for manufacturing executives and manufacturing engineers in industries that make products out of metal.

Our information comes from many sources--manufacturing executives, economists, government officials, educators, consultants and futurists (who dislike the name, which infers they use crystal balls in predicting future events and trends). A few did talk about changes 50 years out, but most were more concerned with coping with present technology. As one auto executive said, "We have a tremendous task right now of just using what's available without creating any new technology." The present dilemma

For decades now we have been getting doom and gloom reports about our failing productivity, poor quality products, and lack of competitiveness in world markets. The demise of our smokestack industries, we are fold, has been brought about by many causes: lack of management foresignt and emphasis on short-term financial gains; failure to incorporate high technology; poor federal fiscal policies deterring capital formation; lack of a coherent industrial policy; low-cost foreign labor; poor use of workers' talents; too little R&D investment; ineffective public education institutions--the list goes on.

Views on what can be done to correct these ills are varied and many. A most comprehensive assessment of the current status of US history was made in the keynote address given by James Brian Quinn, professor of management, Amos Tuck School of Business, Dartmouth College, at the Eighteenth Annual Meeting of the National Academy of Engineering. Quinn cautioned that, due to capital investment being harder to justify in an era of high-cost capital and low-cost foreign labor, leadership and financial success will increasingly depend on foresight, continuous innovation and rapid response capabilities. He said, "The willingness and capability for managers to (1) make long-term strategic investments and to (2) innovate continuously (organizationally and technologically) will continue to be the most important factors determining future success for US manufacturers." He continued, "Unfortunately, both unwise US government policies and widely accepted management practices have often mitigated against positive actions in both areas."

He cautioned that company managements that look at technology or manufacturing activities simply as money mills to be compared against the financial advantages or disadvantages of hoarding silver or owning banks are unlikely to create the atmosphere that keeps their organizations strong, processes current, quality high, and technologies at the forefront.

Quinn said, "Government actions can significantly help or retard needed innovations. But they should not be made the sole or critical focus of national endeavor. The driving pressure for change must come from industry managers, concerned citizens, and educators whose own futures are affected."

One of the marco trends Quinn sees--in spite of those who believe that steel, autos, machine tools, and other mechanical industries will not survive--is that by 1995, manufacturing will still likely be the largest single-digit SIC activity at some $2.4 trillion (current) or about 22 percent of an $11-trillion economy. This would account for 3 million more workers (a 1.1 percent growth rate) in manufacturing.

To accentuate the positive, Quinn sees many strengths and potentials inherent in US manufacturing enterprise. The US enjoys a higher per-capita gross domestic product, allowing latitude for investment and risk taking. This country also enjoys the world's most aggressive venture capital market, and a breadth of companies, products, and raw materials enjoyed by few other countries. Another plus for the US is its small-company entrepreneurial structure, which will be a continuing strength.

Others also have described American enterprise as on the upbeat side, judging our chances at survival quite high. In a column in the January 16, 1984, issue of Newsweek magazine, Frank Press, president of the National Academy of Sciences, suggested that we not overlook Japan's problems and concentrate on our own technological strengths. He points out: Japan's economy is maturing, its dazzling growth tapering off; Japanese families now spend 32 percent of disposable income on food, American families spend 17 percent; Japan's work force is maturing, meaning higher labor costs and social-security payments; and Japan's infrastructure is in bad shape, the repair of which will siphon off funds needed for investment.

Press believes we are in the midst of a technological rejuvenation. We are spending more on R&D than West Germany, France, and Japan combined. The market for venture capital is booming and seeding new businesses. Goernment antitrust lawyers have become more tolerant of cooperative research by groups of companies. "In short, we hold strong cards," he says. Predictions--fact or fancy?

In spite of problems facing US industry, prospects for the future would seem encouraging. Yet, the fast pace at which change is occurring has a way of inducing anxiety. Because of the uncertainty about what the future holds, there has been increasing interest in predictions. These give us some assurance about the future.

Some predictions are outrageous, based on fantasy and designed to shock the reader or to publicize the audacity of the predictor. Others are based on what the public would like to hear or are designed to get the public's attention. Sometimes predictions are merely a form of entertainment.

There are those, however, who have gained credibility by basing predictions on a logical and calculated assessment of facts, aimed at giving businessmen help in making decisions. These entrepreneurs have made a business enterprise out of making predictions. One is John Naisbitt, author of Megatrends (Warner Books, Inc., New York). He describes his method of predicting future trends as "content analysis." By monitoring public behavior and events over a long period of time through reports in the news media, Naisbitt's organization pinpoints, traces and evaluates important issues and trends, advising clients of his findings through reports published quarterly.

His book is based on these reports and other sources. In it he characterizes the present situation in the US as the "time of the parenthesis"--the time between eras. He says we have not quite left behind the America of the past--centralized, industrialized and economically self-contained--but we have not embraced the future. We are clinging to the past in fear of the unknown future. "This future is the information society," says Naisbitt, "where braiin power replaces physical power and where technology will extend our mental ability."

Professional forecasters emphasize that forecasting is not a game of chance. In their book, Encounters with the Future: A Forecast of Life into the 21st Century, (McGraw-Hill Book Co, New York) Marvin Cetron and Thomas O'Toole say it involves the collection, analysis and synthesis of data. Computers are used to analyze trends and indicators, which the authors call obscure nuggets of information that tell which way a trend is headed.

Cetron and O'Toole say that change in life today is pervasive. In past generations, life was pedestrian but predictable. The accumulated wisdom of the present was adequate groundwork for the future, the past was indeed prologue to whatever lay ahead. But technology has so accelerated the pace of change, that the future arrives faster every day. There is no longer such a thing as the routine of daily living.

According to Cetron and O'Toole, basic concepts guide their forecasts. These are: (1) Is it technically feasible? Does the technology exist to allow the product to be made? (2) Is it economically feasible? What will it cost to make the product and are these costs prohibitive? (3) Is it socially and politically acceptable? Are there any restrictive laws against the product and will the consumer buy it?

Technical feasibility has probably delayed the introduction of a great number of products that were conceptually sound ideas long before they could be proven as practical. In 1940, the jet engine was not possible because we didn't have the materials then to withstand the high-combustion temperatures required. On the other hand, we wonder what marketing data was used by the IBM official who reportedly predicted 25 years ago that he saw a world market for about five computers. Make, manage and market

It is very clear, that changes impacting on manufacturing are not simply those evolving from technology, but are also influenced by many sociological, political and economic factors. Changes in manufacturing involve not only the way products will be made--the physical techniques and processes used--but also the way enterprises will be managed, including the way human resources must be treated, and the way finished products must be marketed. World events are dramatically changing the way manufacturing enterprises must operate in order to compete successfully.

In this report prepared by our editorial staff, we look ahead, not only at the technology of the future, but also the management concepts that are evolving to better guide the enterprise and to make more effective use of manpower resources. And, since the purpose of manufacturing is to make a profit by adding value to material, the business aspects are of equal importance. To be viable, a manufacturing enterprise must operate successfully in the marketplace. Our theme, INSIGHT:2034--The next 50 years--assess the making, managing and marketing aspects of metalworking manufacturing.
COPYRIGHT 1984 Nelson Publishing
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Copyright 1984 Gale, Cengage Learning. All rights reserved.

 
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Publication:Tooling & Production
Date:Mar 1, 1984
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