TECHNOLOGY AT WORK

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56 Citi GPS: Global Perspectives & Solutions February 2015 The most significant influence of 3D printing, however, may also be the hardest to quantify. By lowering the barrier to manufacturing physical products, 3D printing may foster a new wave of innovation and the birth of new hardware startups, just as the lowering of the cost of producing software led to innovation and the birth of new software startups. Automating the Design Process Kenneth Wong, CFA US IT Hardware & Software Analyst From the beginning, the benefits of 3D printing were apparent in the industrial design process. 3D printing enabled “rapid prototyping” by speeding up the iterative design process. The technology allowed designers to iterate on designs in real time without the constraints of waiting for traditional job shop works to mill, mould or carve out physical prototypes. We are beginning to see the next phase with software vendors like Autodesk getting more involved in additive manufacturing (producing its own 3D printer). By more tightly integrating the hardware with software, we are beginning to see the next stage of additive design. Autodesk has applied computer learning into its CAD software, enabling engineers to simply determine what a product should do, leaving PCs and 3D printers to best determine the hows of design physics and assembly. Automation Benefits of 3D Printing could “Bring Production Home” Human involvement in the manufacturing process has decreased with additive manufacturing Additive manufacturing also has the ability to drastically reduce the human involvement in the manufacture and assembly of end goods. Once a CAD design file has been converted into a 3D printer compatible STL file, the build process could theoretically be completely automated. 3D printing allows for complete freedom of design, enabling shapes previously unbuildable, including moving components within parts. The ability to print moving parts within a single build could potentially eliminate the need for factory workers to assemble the finished product. At this time, 3D printing is not completely absent human involvement; technicians are still needed to periodically monitor the fabrication process, empty build boxes, replenish consumables and perform some post processing (remove excess build material and in some instances polish items). However, even these basic manual processes are likely to be eliminated as printer OEMs are already trying to incorporate monitoring and continuous printing capabilities into systems (Makerbots now equipped with cameras, voxeljet has a built-in conveyor belt). Indirect Impact on Logistics As 3D printing lowers manufacturing costs, it may also lead to the revival of local manufacturing As the total cost of ownership continues to fall, the eventual result could be the revival of local manufacturing. Bringing production closer to the end buyer does not specifically automate any distribution channels but we do see it streamlining many human elements needed to import goods from abroad (shipping, train trucking). As the ease of use continues to improve, an optimistic future could see 3D printers proliferate within the home. Some believe that manufacturers could one day simply sell consumers rights to design files similar to the iTunes model and put production of most consumer goods within reach of their fingertips. We are still in the early stages of truly understanding the impact of 3D printing on the world of manufacturing. The heightened investments in this sector have enabled industry leaders to push the boundaries of the technology to new levels. Researchers are already exploring concepts such as virtual surgical procedures, self-healing parts, self-assembly (4D printing) and even self-creation. The common denominator with each new application is the ability for machine to extricate the human element from the process. © 2015 Citigroup
February 2015 Citi GPS: Global Perspectives & Solutions 57 Technology has two effects on employment — the destruction effect and the capitalisation effect The scope of automation is increasing as algorithms for big data are able to perform a much broader scope of non-routine tasks 4. The World of Work in the 21 st Century What will the future of employment look like? Most past attempts to predict this have arguably been unsuccessful. In his famous chapter on machinery, published in the third edition of The Principles of Political Economy and Taxation in 1821, David Ricardo argued that the substitution of workers by machines may “render the population redundant.” 75 In a similar vein, John Maynard Keynes predicted widespread technological unemployment as a result of mankind failing to find sufficient new uses for its labour as machines replace workers in old occupations and industries. 76 The obvious reason why this concern has not materialised is that the replacement of workers by machines will have effects on all product and factor markets. An increase in the efficiency of production which reduces the price of one product will in turn increase real income and thus increase demand for other goods. In short, technological progress has two competing effects on employment. As it substitutes for labour, there is a destruction effect, requiring workers to reallocate their labour, but there is also the capitalisation effect, as the demand for other goods and services increase, and new occupations and industries are created. Although the idea of technological unemployment did not materialise during the 20 th century, there is growing concern that Keynes’ prediction may come true. What will happen in the 21 st century remains to be seen, but it is clear that the potential scope of job automation is expanding and will inevitably continue to expand. Meanwhile, the jobs created by digital technologies have so far largely been confined to skilled workers. In this section, we highlight these developments and their potential implications. The Expanding Scope of Automation Historically, automation has been confined to routine tasks involving explicit rulebased activities that can easily be specified in computer code. 77 The term “computer”, for example, initially referred to an occupation stemming from the invention of calculus in the 18th century. With the advent of the electronic computer, the routine task of performing mathematical operations was transferred to machines, displacing human labour in the process. 78 Since then the potential scope of computerisation has increased dramatically, and will inevitably continue to do so. Algorithms for big data are now rapidly entering domains reliant upon pattern recognition and can readily substitute for labour in a wide range of non-routine cognitive tasks. 79 Moreover, intelligent robots with enhanced senses and dexterity are now able to perform a much broader scope of non-routine manual tasks. This is changing the nature of work across occupations, industries and countries. With the improved sensing available to robots, jobs in transportation and logistics are now at risk of automation. Take the recent development in autonomous vehicles, for example, potentially making bus, truck and taxi drivers redundant. 75 Ricardo (1821). 76 Keynes (1930). 77 Autor et al. (2003). 78 Grier (2013). 79 Frey and Osborne (2013). © 2015 Citigroup
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TECHNOLOGY AT WORK

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