Defining the Third Industrial Revolution

The digitization of manufacturing is the breaking wave of technological change that is ending industrial production as we know it. Two words to remember: Additive manufacturing.

A new industrial era, which The Economist describes as the Third Industrial Revolution, is under way. Enormous change is in the offing. At the moment, digitization is creating a new mindset among industrial planners.

Manufacture car parts with 3D printing

On their computers, a designer and engineer team up to create a three-dimensional object. One of them clicks print, and in the next room – or maybe a room in another country – a 3D printer whirs. Layer by layer, the object comes into existence. Instead of ink, the printer uses plastic- or nylon-based materials. Some companies and entrepreneurs are already producing ready-to-wear shoes, special auto parts and personalized iPhone covers.

The First Industrial Revolution supplanted cottage industries. At the end of the 18th century, the mechanized loom created new wealth but shocked the rural economic sector dependent on handicraft textiles. The Second Revolution, signaled by the US conversion to assembly line production at beginning of the 20th century, made mass production the norm for industrial manufacturing.

3D printing, or Additive manufacturing

Additive manufacturing, the proper description of 3D printing, is spearheading the current revolution, argues The Economist. The article’s author illustrates his thesis by designing a hammer, which is then produced with a “natty wood-effect handle and a metallized head”. If that hammer had been made conventionally, he points out, it would have been more expensive. The producer would have had to make a mold, cast the head, machine it and fit it with a wooden handle. That is a lot of work for one single object. If you produce thousands, you achieve economies of scale. That is how mass production works. The advent of 3D printing means that economies of scale matter much less.

The next generation of robots

Widespread and smarter automation is another catalyst for change. The next generation of robots will be cheaper and easier to use. They will be able to work with people rather than replace them. Currently robots are isolated from people for security reasons; their unthinking motions are a safety hazard. Future robots will be tuned to serve human workers: fetch and carry parts, hold and sort items, clean up and so on.

One consequence of the Third Industrial Revolution is that the number of blue-collar workers will continue to decline while productivity increases. More work will be done in front of computer screens. Labour costs as a proportion of the total cost of production will diminish, which will encourage companies in the Western world to repatriate factories from low-wage countries to realize reduced transport costs. The revolution under way will also allow firms to quickly adjust to changes in local tastes.

“One consequence of the Third Industrial Revolution is that the number of blue-collar workers will continue to decline while productivity increases.”

Improve skills in virtual environments

Digitization also has an impact on training. Students can try to improve their evolving skills in virtual environments while having access to all relevant information at the push of a button. The rise of digitization paves the way for complex simulations. Products designed and tested on computers will enjoy reduced development costs. Inexpensive prototypes produced by additive manufacturing will encourage creative and daring solutions.

The breadth and diversity of products that can be made economically in smaller batches, more flexibly and with less labour will increase as additive manufacturing incorporates new materials such as carbon fibre and nanotechnology into products. The Economist notes that we are turning away from mass production towards more individualized production.

A mix of big and small

Experts predict that traditional manufacturing and mass production, in a hybrid mix with new technologies, will continue for many years, especially in big companies that produce large volumes. Many small and medium-sized firms will jump on new possibilities as the cost of producing complicated articles in small numbers decreases.

Although the revolution has begun, it is unclear exactly where we now stand. Quantum leaps are conceivable as bio- and nanotechnology mature. The Third Revolution may include batteries made from viruses and superstructures from paper-thin sheets of metal.

“There will be countless entrepreneurs in little workshops, homes and, no doubt, garages who will be able to do things they could never have done before,” writes The Economist.

“Additive manufacturing, the proper description of 3D printing, is spearheading the current revolution.”