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The Future of Manufacturing 2016

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THE FUTURE of
MANUFACTURING
May 10-12, 2016. Boston, MA, USA.
2 THE FUTURE OF MANUFACTURING 2016
For more information: contacto@inpeople.biz | ciel@iae.edu.ar
ABUNDANCE IN
THE EXPONENT...
3THE FUTURE OF MANUFACTURING 2016
For more information: contacto@inpeople.biz | ciel@iae.edu.ar
ABUNDANCE IN
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The Future of Manufacturing 2016

This document is a briefing of the Conference Exponential Manufacturing organized by Singularity University in may 2016. We enrieched it with examples and articles by our own.

This document is a briefing of the Conference Exponential Manufacturing organized by Singularity University in may 2016. We enrieched it with examples and articles by our own.

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The Future of Manufacturing 2016

  1. 1. THE FUTURE of MANUFACTURING May 10-12, 2016. Boston, MA, USA.
  2. 2. 2 THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar ABUNDANCE IN THE EXPONENTIAL INDUSTRIAL ERA / Pag 3 EXPONENTIALS: MACHINE LEARNING & AI / Pag 9 EXPONENTIALS: SMART NETWORKS & IOT / Pag 13 EXPONENTIALS: BIG DATA / Pag 19 EXPONENTIALS: ENERGY (DISTRIBUTED & SMART) / Pag 25 HACKING ATOMS: THE FUTURE OF ADDITIVE MANUFACTURING / Pag 31 THE BIG SHIFT: THEN, NOW AND TOMORROW / Pag 35 VISIONS FROM THE NEAR FUTURE / Pag 41 BECOMING AN EXPONENTIAL MANUFACTURER / Pag 45 BRINGING “CHANGE IN A DAY” TO OUR FACTORY FLOORS / Pag 49 SUPPLY CHAIN INNOVATION: THE SILENT EXPONENTIAL / Pag 55 HOW DOES ENERGY OF CROWDS CHANGE MANUFACTURING? / Pag 59 THE FUTURE OF COLLABORATIVE PRODUCTION / Pag 63 GARAGE OF THE FUTURE / Pag 67 HOW MAKERS ARE TRANSFORMING MANUFACTURING / Pag 69 WHAT’S THE FUTURE OF EMPLOYMENT? / Tag 73 STRATEGIC RELATIONS & SU / Pag 77 EXTRA-TERRESTRIAL MANUFACTURING / Pag 79
  3. 3. 3THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar ABUNDANCE IN THE EXPONENTIAL INDUSTRIAL ERA Peter Diamandis. Co-Founder, Singularity University & CEO, XPrize. Consider this event the place that you come, to get a sense of what is going from deceptive to disruptive in the manufacturing field right now. According to Peter, this decade, and the next one will be the most extraordinary times ever in human history. Our brains, the way our brains are wired, the way we think, evolved in a very different time, they evolved hundreds of thousands and millions of years ago back when the world was local and linear. Because of that the way we think is local and linear. But today we’re living in a world that’s global and exponential, things aren’t changing century to century. Things are not local, something happens in China or India, and micro seconds later they appear somewhere else, and this is fundamentally different than ever before. Peter then follows: “We’re here to talk about all these next two days it’s computers, network, sensors, AI, robotics, 3d printing, synthetic biology, all of these technologies are doubling in power year after year”. The difference is either going to be disruptive stress or disruptive opportunity. Because if you’re the CEO of a company that’s been doing it the same old way and manufacturing for the last hundred and fifty years, where proud family company been doing it the same way, guess what, it’s going to be swept of stress. If you’re the CEO of a new 3d printing technology, it could be disruptive opportunity. The story of Kodak: In 1996 was at the top of its game of twenty-billion- dollar corporation, hundred and forty thousand employees. Kodak, 20 years earlier had invented the digital camera. A guy named Steven Sasson had put together something he walked into the boardroom of Kodak with this large clunky device that takes 0.1 megapixel images in black and white recording tape drive. And of course the Kodak Board says “this is a toy for kids with Kodak we make beautiful high- resolution images and besides, we are in the paper and chemicals business” … and they promptly ignored it. At the same decade 2012 Kodak files for bankruptcy put out of business by the very technology that they had invented. They had the first actual property, the first mover advantage, but they forgot what business they were truly in. This is one of the questions during these exponential times: What business am I truly in and how am I serving my customers? Because the way you serve your customers, and how do you remain agile is going to be one of the key takeaways you need to be thinking about. In the same year that Kodak goes bankrupt, 2012, another company also the digital images business, gets acquired by Facebook for a billion dollars: Instagram. But they’ve got 13 employees. Peter says he believes they’re going to be a lot of “Kodak moments” in manufacturing world. How we build our houses, how we build our PETER DIAMANDIS Greek–American engineer, physician,[1] and entrepreneur best known for being the founder and chairman of the X Prize Foundation, the co-founder and executive chairman of Singularity University and the co-author of the New York Times bestsellers Abundance: The Future Is Better Than You Think and BOLD: How to Go Big, Create Wealth, and Impact the World. He is also the former CEO and co-founder of the Zero Gravity Corporation, the co- founder and vice chairman of Space Adventures Ltd., the founder and chairman of the Rocket Racing League, the co-founder of the International Space University, the co-founder of Planetary Resources, founder of Students for the Exploration and Development of Space, and vice-chairman & co-founder of Human Longevity, Inc.
  4. 4. 4 THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar fittings, how we build our cars, how we build everything. In the same day that Twitter goes public, Blockbuster goes bankrupt and you know the stats from the old school of business, that the next 10 years 40% of fortune 500 companies will no longer exist, only backed up by this stat from Yale which says if you start a company in 1920s, the rate of change was rather slow. Today you get in an S&P 500, you’re on it for 15 years. And what we’re also seeing, and this is the challenge, is young entrepreneurs going from “I’ve got an idea” to running a billion- dollar company faster than ever before. Chad Hurley starts YouTube on his credit cards, and sells it to Google for 1.6 billion dollars 18 months later. You could not have conceived of a couple of guys really building a company, never buying a car being worth sixty- seven billion dollars inside of five and a half years (UBER). We as humans are linear thinkers, Peter says, but that’s not the world that we’re building. It is an exponential where the power of the technologies doubling leads to unexpected results. It’s going to get any company that’s not really surfing on top of the tsunami crushed by the tsunami. It’s the reality of the world that were living in today. “I spent 10 years across the Charles River MIT and at Harvard med school getting the best degrees I could, but at the end of the day you become the world’s expert in a very narrow net [...] “says Peter. Here in SU, they are not trying to make an expert any one of these technologies, but it’s about consistently giving you an overview of where these technologies are today and where they’re likely to go. Our brains aren’t wired that way, the best we can do is make short term linear projections. And so what SU is about is creating a venue like Exponential Manufacturing one for you to come back and get an update, “this is the world today and then a year from now this is what is now possible, and then this is what’s not possible because that’s the only way we can do serial approximation to the kind of growth were having”. SU runs programs for graduate students, they have thousands of graduate students around the world, they run programs with Deloitte & XPrize, and so on. Now all of this exponential growth at least the computational realm is riding on top what we call Moore’s Law. In 1958 Gordon Moore partner with a few individuals to start Intel. In 1965 seven years later he writes a paper and says “we’ve noticed something the number of transistors that are able to fit on an integrated circuit has approximately doubled every 12 to 18 months for the last seven years and it’s likely continue”. And that statement that it’s likely continue has continued
  5. 5. 5THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar for 50 years slow down a little bit from 12 months to 18 months 24 months but it’s been a constant force of nature. Intel’s first commercial product the intel 4004, 2300 transistors about a dollar each. 40 years later the 2012 Nvidia graphical process unit is now 7.1 billion transistors and millions of a penny each. A hundred-billion-fold improvement, which is extraordinary but guess what, it doesn’t stop here it continues on beyond this. In 1956 this was a hard drive, five megabytes a hundred twenty thousand dollars. Now we probably all noticed when this occurred right when 2005 it’s hard to eight megabytes for 99 dollars, but did we notice when it was all of a sudden 120 gigabytes for 99 dollars, a thousand-fold price improvement right on schedule on Moore’s Law. So the question is, can this growth go on forever? The answer is a yes and a no. What we see now is called the deceptive phase of exponential growth, in the beginning you see very slow phase, then explodes and uses all available resources, and lastly it falls off. We see this all over the place and all kinds of technologies. But the challenge is that it doesn’t stay that waybecauseofthelawofaccelerating returns, we use one technology to build the next technology, and then use that one to build the next one. The very first computers were relay based, and then we went to vacuum, then we went to transistors, integrated circuits and we built them and they look like a continuous process and so it is continuous exponential curve. Moore’s law will run out but something else will supplant it. Dial-up, it wasn’t so long ago we became spoiled by your DSL, and then by cable modems and by fiber optics and this continues on and on and over again. Peter then continues giving examples about the exponential curve and it’ behavior throughout the years. “As I teach this, and this is to you as the CEOs in the room I want to give you a conversational vocabulary that we use at Singular University called the 6 D’s of Exponentials. As anything becomes digitized enters a period of deceptive growth, that it becomes disruptive that dematerializes, it demonetizes and it democratizes products and services. And let me break this down for you, because I think it’s this is the road map I use and I think about it every company I’ve started. In 17 companies. I’m constantly looking at how do I’d dematerialize, demonetize and democratize my products and services. Because if I’m not doing it, someone is doing it to me.” It’s really hard for the human brain to tell us where exponential growth were ten steps away from hundred percent. We all know about the 3d printing, but how many of you have heard about 3d printing five years ago? How about 10 years ago? About 20 years ago? About 30 years ago? It’s a 33-year-old technology. Chuck Hall involved event of stereo lithography 33 years ago, it’s just been in deceptive growth for a long period of time. And now it starts hitting the knee of the curve and then all of a sudden it becomes disruptive. The next D is Dematerialization and it’s the notion that 20 years later all of
  6. 6. 6 THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar these things fit in your pocket. My own cellphone carries a GPS or HD camera, video camera, flashlight or any of this stuff it all fits in my pocket and so the question is: which of your products or services are you dematerializing? Guess what, Airbnb is dematerializing hotels and Uber is dematerializing cars. So we are dematerializing things over and over again that’s how you take in the sharing economy unused assets and repurpose them very effectively. When you make them digital the marginal cost of replication and distribution is effectively zero and they are demonetized. Uber is democratizing taxi fleet, Skype long distance, Amazon bookstores, Google research/libraries, Airbnb hotel chains and Craigslist decimated the newspapers. Took the money out of the classifieds put it back into the pockets of the consumers. As the leaderships of your company which of your products and services are you dematerializing and demonetizing? All of a sudden you can reach a billion people in Africa. If I wanted to reach a billion people in Africa. That manufacturing industry especially through digital manufacturing is going to enter a period of rapid dematerialization, demonetization and democratization. How are you part of that? All this is being driven by the exponential curve. We’re using faster computers to build faster computers, to build faster computers. In 2010 the average thousand-dollar computer from best buy was calculating a hundred billion calculations per second, more computational power the US government had the sixties and seventies getting us to the moon. What we’re talking about here? Is the notion that faster, cheaper computing power, which is almost a force of nature, is driving a whole slew of technologies. Peter then goes on his speech with: “Here in Exponential Manufacturing, we will be talking about sensons, networks, 3D printing, AI, Robotics, and so on... and any one of us could become an expert in one of these areas, maybe two. But that’s not the game we’re playing here. It’s the fact that these areas are really combining an unexpected convergent mechanisms and consequences. It’s the coordination of AI and sensors and 3d printing coming together it’s really about”. Arthur C. Clarke said any technology far enough advanced looks like magic. Artificial Intelligence is going to be magic especially in the digital manufacturing world. One of the implications of all these exponential technologies is a book called “Abundance”. Peter says he’s positive about the future for two reasons: 1) He looks at the data 2) He doesn’t watch the news. We evolved on the savannahs of Africa hundreds of thousands and millions of years ago back when the world was a dangerous place. And we evolved the piece of our brain the temporal lobe called the amygdala that takes everything that we see and everything that we hear and process it first looking for danger. The fact is that the news media takes advantage of this hard wiring in our brain. Peter says that it’s not what the news media is reporting isn’t true, it’s that it’s not a fair and balanced view of the world. We pay so much more attention to negative news and positive news. There’s no one standing outside Logan this morning going “there was no plane crash here today”, no one standing outside local school saying “no school shooting here today”. You only hear about when these devices get distributed around
  7. 7. 7THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar the world every single problem, every single hardship can be reported to you in high definition your living room over and over again. This dystopian view of the world was brought to us by the news media. Peter then talks about subjects discussed in his book “Abundance”: “I’d like to close the last few minutes here by giving you a sense that we truly are living in the most extraordinary times ever. In the manufacturing industries critically important to that the fact that I can get anything I want at any time, almost any place on the planet is unbelievable. I think about technology is the force it takes what used to be scarce and makes it abundant and that’s what you do. You take something that used to be scarce and you make it abundant.” “The Economist” reported that we’re heading towards the end of poverty. It was reporting that we are at a 25-year low for famine on planet earth. We’re heading towards a time where we’re going to elevate take everybody out of extreme poverty and truly give us a world of abundance. The number of democracies gone from a handful in 1802 to nearly a hundred today. Steven Pinker’s book “the better angels of our nature”; in which he says listen we’re living during the most peaceful time ever in human history. If you look at the world as a whole this is the safest time ever to be alive. In the nineteen fifties over a hundred countries on planet earth had more than six children per family. Today it’s plummeted. You make a country better educated and healthier it drops. “Worldwide life expectancy”: for most human history, it was 26 years old who was sort of like what an adult male would achieve. “During these next 10 years I truly believe we are going to double the human life span once again. Our goal is to make a hundred years old the new 60. “says Peter. For all of human history while the quality of life has gotten better on almost every possible account of luxury, of number of TV shows, of foods, of materials, of what you could buy we have the hours we worked. Automotive accidents are in the blue, and when we get autonomous cars will go from 35,000 States down to zero. 1.3 million around the world down to zero. We will here Brad Templeton speak about this here in orange or red is airlines right we’ve learned. It’s amazing how we made transportation so extraordinarily safe. “This is annual global death rates. If you look at this in the forties fifties all the sudden death rates from epidemics from storms from floods from earthquakes from droughts starts to plummet. What happens? our ability to predict these things get better and our ability to actually get help was needed instantly improves.” It really is the impact of the technologies that were speaking to hear about. This is why the world is changing. This is why we’re heading towards this extraordinary age of abundance. The cost of launching the Company. In 2000s, the average cost for start-up was five million dollars. Then enter open source, then enter AWS and
  8. 8. 8 THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar cloud, and now we’re down to 5,000 dollars. for 5,000 dollars you can stand up an Internet company and sell something. That’s a thousand- fold reduction in cost. “It isn’t that these amazing startups creating these billion-dollar overnight successes are smarter than anybody, it’s just that there are a thousand times more attempts on goal and because of that you can still have 990 ninety failures and 10 unicorns coming out of it”, Peter emphasizes. Internet penetration, 1.8 billion people connected in 2010, and the low estimate for 2020 is five billion connected people which means three billion new consumers who have never bought your stuff are coming online. Are you selling to these three billion new minds or not? Zuckerberg, Google, Musk, Branson and Paul Jacobs are working on capabilities to connect every single person on the planet. Imagine eight billion people on planet earth connected with a megabit per second connection, with access to the world’s information on google. The ability to spin up a thousand processor cores in AWS, the ability of your cloud print whatever they want, if you thought the rate of change was fast you haven’t seen anything yet right what are these people going to create ,where they go to event with a desire to discover its tens of trillions of dollars, and for the global manufacturing Industry this is important these people are going to build stuff, you’re going to want stuff a pleasure. I thank you for your time and for your energy. I wish you an amazing experience here. I hope you’ll come back year after year to really learn to appreciate what we do it single university. *** Para profundizar recomendamos VIDEO DE LA CHARLA https://www.youtube.com/ watch?v=i6Gl_wQxi80 ARTÍCULOS Stay Ahead of the Next Industrial Revolution With Exponential Manufacturing http://singularityhub. com/2016/03/16/stay-ahead-of- the-next-industrial-revolution- with-exponential-manufacturing/ The fourth industrial revolution – this time it’s exponential! http://www.softmachines.org/ wordpress/?p=1776 HERRAMIENTAS Abundance Insider http://diamandis.com/abundance- insider
  9. 9. 9THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar EXPONENTIALS: MACHINE LEARNING & AI Neil Jacobstein - AI & Robotics Co-Chair, SU & Former CEO, Teknowledge Corporation AI spent the first six decades of its history flying below the radar and now it has suddenly exploded into public consciousness. The MIT press published a seminal work and artificial intelligence applications and manufacturing 14 years ago. Manufacturing is a data and knowledge driven process, it’s all about manipulating molecules and we still can’t do atomically precise manufacturing at scale in spite of that historical trends and materials and manufacturing or clear increasing precision. Decreasing costs, increasing flexibility, increasing speed, in fact accelerating speed and complexity is now free. Thanks to the advances in hardware, in algorithms, in cheap sensors and then access to data, things have really changed so AI can now contribute to manufacturing faster actions and decisions: • Product and material innovations • Improved efficiency • Higher accuracy • Lower costs • Increasing scale It’s not just about improving things on the manufacturing floor but improving things throughout the manufacturing enterprise from design to customer service, sales and administration and quality control. General Electric has been using AI in its manufacturing process for three decades. They’re using big data to make smarter turbines, to diagnose problems in their train engines for decades. Business Wire just published a report a few weeks ago on a collaboration between robot manufacturers FANUC, Rockwell Automation, Cisco and Preferred Networks, an AI company. They’re all about creating an advanced analytics platform were improving overall equipment efficiency on the manufacturing floor. Yale University has published a series of articles on using machine learning to provide integrated optimization of semiconductor manufacturing. General Electric is all also providing a software fabric to go over traditional manufacturing floors to provide increases in prediction responsiveness and connectivity to take a standard manufacturing floor of old-style equipment and turn it into a software configurable manufacturing engine. IBM has graduated Watson from playing jeopardy games and working in medicine to Watson explorer for manufacturing a single portal for integrating all of the information from the manufacturing enterprise. Search IBM Watson blog just a few weeks ago looking for the article on how content analytics, text analytics and NLP (natural language processing) has helped auto manufacturers identify potential product liability just by looking at Twitter feeds and customer feedback. There’s been an increasing pace of AI investment and acquisition from 2011 through 2015, over three billion dollars and VC funds were invested in cognitive technology. NEIL JACOBSTEIN Consultant on AI research and development projects for: DARPA, NSF, NASA, NIH, EPA, DOE, the U.S. Army and Air Force, GM, Ford, Boeing, Applied Materials, NIST, and other agencies. Neil Jacobstein chairs the Artificial Intelligence and Robotics Track at Singularity University on the NASA Research Park campus in Mountain View California. Neil is a former President of Singularity University.
  10. 10. 10 THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar During the same period over a hundred of AI related companies either merged or were acquired by the typical players: Alphabet, IBM, Facebook, Amazon, Apple People often described AI as a game-changing technology but it’s actually much more than that. AI is disrupting the entire field that we are operating on! The achievement where Alpha GO won against the World Champion on GofourgamestooneisaledtheKorean government to promise three billion dollars for an AI R&D program aimed at manufacturing.The underlying technology behind that Alpha GO player was a pioneering technology that combined convolutional neural networks (you can think of that as a fancy word for pattern recognition agent) with reinforcement learning that reinforces that agent for a high score in an arbitrary Atari game. These systems were developed by DeepMind Technologies in the UK, demonstrated for the first time in 2013. The system started from zero knowledge of any of these Atari games and they outperformed all previous approaches machine learning approaches and did amazingly well they discovered strategies on their own. After a hundred and twenty minutes of training Deep Mind Tech machine learning system begins playing at a kind of mediocre human level. But then after two hundred and forty minutes of training the system tunnels up the left hand side of the screen and plays from the back court where the game has no defenses that is a real breakthrough in AI. Just a month after that 2013 demo then google acquired Deepmind Technologies for more than 500 million dollars. What is AI? People often want definitions… It’s pattern recognition techniques to solve practical business and technical problems. Software agents that can utilize resources efficiently. Most of the work that goes on in AI and robotics is not going to result in the sort of science fiction scenarios but if anybody tells you that the long- term consequences of the AI will be all good or all bad, they are cherry picking the data… AI comes with trade-offs, yes!
  11. 11. 11THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar Faster, cheaper, better problem solving but also job disruption, human identity change and risk amplification… and sometimes risk reduction. The AI community is taking risks seriously; I was recently invited to a Conference on the future of AI in Puerto Rico where I joined with 50 AI researchers. We sat around for 3 days and talked about the research agenda needed over the next few decades to keep AI doing beneficial things for us. Elon Musk worked with people from Y Combinator to create a new organization called Open AI to pursue advanced AI in the open so that everybody has access, not just big companies. They’re investing 1 billion dollars and some great researchers in that endeavor. They’ve already put out their first product: the Open AI Gym to evaluate different reinforcement learning algorithms The human brain evolved under very different circumstances and the ones that we have today it hasn’t had a major upgrade and over 50,000 years. Compare to your laptop or your cell phone upgrade in last five years… We’re going to have to augment our cognition both in everyday life and on the factory floor. We’re going to use statistical and deep machine learning task and domain-specific knowledge engineering marshalling the data and biologically inspired computing architectures like deep learning. Deep learning is the champion algorithm in machine learning has been winning all the contests and one of the things it does is hierarchical pattern recognition. It can start with pixels and then go to edges and then it begins to recognize object parts at the next layer of the hierarchy and finally objects and you can add arbitrary numbers of layers, 152 or 300 or 1.000 and get amazing feature discrimination. DARPA (Defense Advanced Research Projects Agency) has a new program called probabilistic programming for advancing machine learning and what that’s about is opening up the black box of machine learning algorithms and getting them to play well with others particularly relevant for the manufacturing floor where we want to be able to use simulation and optimization and get all these algorithms to play together. AI it’s not just better, faster, cheaper… it’s different AI allows us to expand the range of the possible in the form of practical business and manufacturing problem solving. Create an application oriented AI toolbox! Download the Machine Intelligence Landscape infographic, is just lots of different examples of machine learning companies and techniques, all classified into different bins. There’s a company called Newtonian that you might want to track, they have a machine learning product called Eureka. A company called Río Tinto was working on powdered metal steel and they were having trouble in their quality control. They used Eureka to analyze many different variables involved in the powdered metal manufacturing process and it turned out that one of the variables that they just threw in there for kicks turned out to be the really important one causing their quality control problems. If you don’t have the bench strength in your own company, you can extend your bench strength by putting out your data in the public and putting up some prizemoney at Kaggle and the world’s greatest data science teams will compete for the solution to your problem. Another way to increase your bench strength is to use a company called x / 5 that curates a marketplace of qualified data scientists they came out of the Harvard Innovation lab and they
  12. 12. 12 THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar allow you to just put out your problem without revealing your data and then pick a qualified data scientist to work with you. Let’s talk about some work implications Oxford Business School had a study in 2013 of the next 10 to 20 years of the American job market and they can noted that 47% of the most routine jobs in America would be vulnerable to automation over the next few decades. They updated their work over the last few weeks. They put out a new report called Technology at Work where they looked at the entire world and they concluded that developing countries have an even bigger problem, they have more people involved in routine work both in factories and in administrative jobs, their risk is even higher! That suggests we’re going to need to team with AI strength that way we’ll get best-in-class performance at least for some deaths pure biases and decision- making superfast operational velocity will be able to team with a partner that works seven days a week 24 hours a day, no vacation or sick leave required, no healthcare insurance but limited empathy, language understanding and social grace. The winning formula for working with AI and robots for that matter humans plus a is plus good business process that’s more powerful than AI alone. We’re going to be able to combine that power to increase our productivity remarkably. We’re going to build very very smart systems. We’re going to reverse engineer the human neocortex, make vast artificial neocortex and make our factory floor super smart. How to think outside the box? There is no box, remember that AI is going to change the balance of power between big companies and small startups. Some operational recommendations to transform manufacturing products and services: • To team humans plus AI best-in- class business process is a winning formula. • Utilize the power of machine and deep learning, try all the free tools that are out there, they’re surprisingly powerful. • Leverage AI platforms and your manufacturing operations, not just in your customer facing products and services. • Outsourced and increase your bench strength with Kaggle and other crowd services and be proactive about security ethics and product liability. *** Para profundizar recomendamos ARTÍCULOS Manufacturing Automation Leaders Collaborate: Optimizing Industrial Production Through Analytics http://www.businesswire.com/ news/home/20160418006725/ en/Manufacturing-Automation- Leaders-Collaborate-Optimizing- Industrial-Production How content analytics helps manufacturers improve product safety and save lives https://www.ibm.com/blogs/ watson/2016/04/content- analytics-helps-manufacturers- improve-product-safety-save- lives/ The Current State of Machine Intelligence http://www.bloomberg.com/ company/announcements/ current-state-machine- intelligence/ HERRAMIENTAS www.kaggle.com http://www.nutonian.com/ products/eureqa/
  13. 13. 13THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar EXPONENTIALS: SMART NETWORKS & IOT Brad Templeton, Director of the EFF, Founder of ClariNet This text will give you a couple of the key ways that recent developments in computing affecting manufacturing. Having been on the internet for a long time we can identify what we think are the ingredients that allowed it to foment an exponential revolution. One is the arrival of open platforms as a way of doing business. You’ve heard about open source software, where everyone builds takes what they build and contributed back to the world. This idea is actually spreading now in the hardware. Arduino, is computer board and is open source hardware, which is to say that the design of the hardware has been released and it’s free for anyone to modify and anyone to make, and that’s made it one of the most successful computers when it comes to making a small computer for prototyping. It may actually make sense just as people in the software world learned to take the designs for your hardware and let other people manufacture and improve it, because no matter what company you are, no matter how smart your people are, most of the smart people in the world work for someone else Bill Joy said, and only this system which allows people to collaborate, has let small projects come and take over the world. Another concept is the stupid network. Back in the nineteen eighties the phone companies were selling something called the intelligent network, the idea of the intelligent network was they built a new generation of phone switches and those phone switches could give you all the new phone features of the day, call waiting, call forwarding, you got them on the phone that was already on your desk. But the phone didn’t change because the intelligence was in the network, the internet turned that upside down and said let’s make the network stupid and the edges smart, all of the smarts of the internet, this thing that changed the world so much are not in the internet, they´re in your phone, in your laptop, in your tablet, in the web server you’re talking to. This idea of stupid infrastructure and smart edges is one of the Internet’s greatest contributions. Every industry in the manufacturing industries have to understand that they have to virtualize and become software platforms. In fact, all go further and say that if you are not a software company, if you don’t think of the value that your company owns as residing in large part in the software that you develop you may soon not be a company in the 21st century. You need this flexibility for a very important reason, no one have a crystal ball. Here’s the problem, you need to make your plans for 20-25 not with the knowledge of 2016, the way you’re thinking of doing now, but with the knowledge of 20-23, it’s going to compete with a small competitor who made their plan with the knowledge of 20 23. Now the only way you can face that competitor in the modern world, no matter what business you’re in is if you have the flexibility to change everything you do because most of it lies in software. The sort of platform you have to BRAD TEMPLETON Founder and designer of the software for ClariNet Communications Corp., the first internet-based content company, then sold it to Newsedge Corporation in 1997. He has taught at Singularity University, a new multi- discliplanary school of rapidly changing technology since its founding, and chairs the track on Computers and Networks. He built a system to reinvent the phone call that you haven’t seen yet. He writes and researches the future of automated transportation at Robocars. com and is a consultant to the team building these cars at Google.
  14. 14. 14 THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar be even when you make physical goods, even when you’re in the manufacturing business must be based on software. Airbnb can rewrite their software and completely change what their company is while other big companies cannot. This is how you must be if you want to compete with the young companies who are coming after you. About networks, there’s a lot going on but one development to point out was done by the Google X lab where they are putting up balloons in the stratosphere twenty thousand meters up above the airplanes, the balloons just float they don’t have motors but they can change their altitude, they can go up and down and when they do they can find winds at different speeds and different directions and they can map these winds and keep the balloons up for a hundred days and that allows them to blanket economically an entire continent with balloons, providing radio connectivity to everyone at a low price. There are three billion people in the world who are connected to the network today, but four billion are not and those four billion will be. Their lives will be changed, they will have everything that we have seen, all the changes in our lives and more importantly to manufacturers, they will become their customers, they will have the ability to see and order products and understand that other people are using them and changing their lives. Another thing to mention is telepresence robots. In manufacturing field one thing that’s really interesting is several manufacturing facilities in places like China are actually putting in these telepresence robots which are allowing their customers to come and instantaneously visit the manufacturing lines at any time of day look at what’s going on, zoom in on things, inspect what’s going on. It’s going to become much more possible to interact more closely with remote manufacturer and remote for supplier facilities as you move on in the world. Another technology that’s going to make a big change is augmented reality and we’ve seen some of this already with things like Google glass. The company Magic Leap has received 1.4 billion dollars in private investment to make augmented reality glasses. Now that’s the largest private investment in history. This technology will not only allow the telepresence to get better, but also will improve exactly how people remotely maintain and control things. Internet of thing. There is no thing such as Internet of thing, it´s just marketing, instead we can mention three trends and three technologies making thousands of applications which are indeed connecting everything and will in fact create billions and billions of connected devices. The three technologies are sensors, computing, and networks, and the three trends are getting cheaper, smaller, and lower power. In sensors, if you bought a phone recently you’re seeing all the new generations of sensors that are showing up, in computing that’s been going on with Moore’s law for a long time but we’ve mentioned a couple of these small board computers which are what everybody uses today when they want to prototype an experiment with new computing, such as the $35 Raspberry Pi, and the new Raspberry Pi will cost just five dollars. This computer would have made it on the supercomputer lists in the late nineteen eighties and now it is available for less than the price of a cup of coffee. A full board computer cost less than a latte and the computer is going to get cheaper and the latte is probably going to get more expensive. This is the trend to look for things getting so cheap that we can do new things with them we never would have
  15. 15. 15THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar conceived as economical before. In networking there are so many standards, there’s a lot of hype around this, we said it was a marketing phrase and has generated hype so, people need to understand that this doesn’t refer to the smart fridge that figures that when your milk has expired, turns out your nose still works reasonably well for solving that problem, it’s not your washer and dryer having a long conversation with your thermostat, it’s not video conferencing for your dogs. On the other hand think about shoe tags, they cost less than ten bucks, they’re the size of a watch battery, they last for a year on that battery and you can do basic computing and networking in them at this low price and small size and long lifetime. Industrial applications are actually where the money is already being made, sensors that measure everything that goes into a tank and what’s going to a tank, understand that every industrial process, every process in your factories and so on will in the coming decade be instrumented. It´s possible to know where everything is and what everything is doing and it’s going to be inexpensive. Manufacturers need to plan for that because if they don’t their competitor will be planning for it and they will have a more effective process line, more effective industrial activity. The biggest dollar value in fact will be in the supply chain for the early days. When it comes to trying to make a big change look for things that actually affect people’s lives, the Apple Watch so far the jury is a bit out on that, the Fitbit got a big IPO but a lot of people stopped wearing it after a while. When it comes to these health applications are still looking for the killer app, but we need to think for example in someone who is actually sick and need to take pills, a pill bottle cap which can tell whether you’ve taken the pills off and taking the cap off and when you’ve taken the pills that can be told to his doctor or to him and that could mean a real thing. What’s important to remember here
  16. 16. 16 THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar is people are starting to think about technology that’s so cheap they can put in a pill bottle cap or even put in a light bulb, there are lightbulb wich changes color as the day goes on, again, when technology is so cheap that computers and networking are showing up in lightbulbs and pill bottle caps, in cups of coffee, that’s what’s going to change business and how things instrument into the future. Here’s a piece of advice trying and integrating all this chip technology into your processes, Google did something amazing when they were building their company, they were trying to build servers and they didn´t have a lot of money, so instead of the conventional wisdom of buying the top grade equipment and the enterprise grade disk drives and servers they did something else, they bought the absolute cheapest equipment they could get their hands on, they put them on racks on wooden boards with bricks holding them up, that’s how they built their server rooms, but they designed it to expect that these cheap components would fail, by the way the expensive components also fail just less often. So they said it doesn’t matter whether or not it fails or how often it fails if we design it for the redundancy to survive. When good equipment in Google server rooms fails nothing happens, it doesn’t even hiccup, if Google goes down that’s on the front page of the newspapers that’s how reliable their servers are, and all that happens is a guy goes out once a week with the truck with little hand truck any slots in the new disk drives and the new boards that need replacing because the system. This is the lesson when things get really cheap don’t try and then use it to get really high reliability stuff that’s still not perfect, use the cheap stuff and more than one of it, be redundant so that it can fail and so that you survived those failures without a hiccup. That is how you will provide the best processes to your customers and it’s an interesting lesson Google has taught us. Cisco forecast that all of these small technologies will in fact generate close to 14 trillion - 15 trillion dollars in value over the next 10 years, a lot of it from these non-sexy clipart things like supply chain management, asset utilization, employee productivity, they are important to many of the companies but some of it from the innovation space. Today the devices in our lives, all the things that we carry in our pockets and that we have in our spaces and build are not nearly as aware as they should be of where we are and what we’re doing and we can fix that if we make our environment a little bit more connected so that our devices make our lives frictionless, that’s what really will change our lives. One of the world’s largest manufacturing industries, the 1.7 trillion-dollar automobile manufacturing industry part of the five trillion-dollar personal ground transportation industry is about to get completely upended by the self- driving car. Is going at it mostly to think about saving lives, 1.2 million people are killed around the world in car accidents and that is one of the world’s greatest diseases if it were a disease, and we have the potential to change that and change it around the world, and so this is what’s driving people to go forward but the consequences to everything else are going to be huge, and in fact that entire automobile manufacturing industry is up for grabs and other industries can be as they are digitized, which is why you need to learn a little bit about this one, the energy industry believe it or not is also changed because as people move towards buying cars by the ride instead of buying cars as cars, buying
  17. 17. 17THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar the manufactured product as a service instead of as a manufactured product. Suddenly all the buying decisions about it change, people don’t go to a car dealer looking for the car they’re going on for five years, they pick up their phone looking for the car they’re going to use for 10 minutes, the way they do with Uber, and suddenly they don’t care about the energy, the brand, the suppliers, all the old rules of that giant manufacturing industry are upended when it becomes digital. We can see two different approaches between the companies applying this, the car companies are taking a traditional manufacturers approach, they’re taking the cars they make and they’re adding computers to them hoping to improve them and make them drive themselves. It’s an evolutionary approach but the non-car companies, the high-tech companies, they’re taking computers and sticking wheels under them to see what happens. A revolutionary approach that works at the innovation pace of the computer industry for very different results. There are going to be a lot of winners and losers in this space but the winners will not be the manufacturing companies but rather the people who own the customer and provide that service, and this will happen in cars and it will happen in every industry soon if they do not become aware of the way it becomes digitized. The big change here is that in the car the engine is no longer the most important part of it, the computer is and while the engine and the other parts of the car aren´t on the Moore’s law curve, that computer and software are, and everything we said above suddenly applied to an industrial industry that has no idea of how to deal with it. One last thing that will change all
  18. 18. 18 THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar sorts of goods is the ability to build delivery robots rather than self-driving cars. A company in Europe have built robots which run on the sidewalks, they’re going to be able to bring you anything in 30 minutes, not just a pizza, for example You´ll be able to order five pairs of shoes, try them on throw for back in the robot and send it back, that hold that retail store experience in your home will suddenly allow us to consider what the meaning of retailing is and even what the meaning of ownership of manufactured goods is, because if you can get anything in 30 minutes as this technology promises for under a dollar do you need to own things? There are many things in your life that you may decide you don’t need to own when goods move as quickly as data. So big changes coming from robots from computers and from the digitization of all the products you make and the transportation that carries them and so watch out for the future very much. *** Para profundizar recomendamos VIDEO DE LA CHARLA https://www.youtube.com/ watch?v=HORuh5tnAuU ARTÍCULOS Siri-creator shows off first public demo of Viv, ‘the intelligent interface for everything’ https://techcrunch. com/2016/05/09/siri-creator- shows-off-first-public-demo-of- viv-the-intelligent-interface-for- everything/ Here’s the first demo of Viv, the next-generation AI assistant built by Siri creator https://techcrunch. com/2016/10/05/samsung- acquires-viv-a-next-gen-ai- assistant-built-by-creators-of- apples-siri/ Crazy ideas, inventions and essays from Brad Templeton http://ideas.4brad.com/ HERRAMIENTAS https://www.playpiper.com/ https://www. grabcad.com/ https://www.magicleap.com/#/ home https://www.raspberrypi.org/ products/
  19. 19. 19THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar EXPONENTIALS: BIG DATA Cack Wilhelm. Principle, Scale Venture Partners. We often think about big data is this proper noun, capital B big and capital D data. When in fact it’s really just an adjective: Big describing something, Data that’s been around since the dawn of time. You’ve heard from experts all morning, you’ve heard about robotics and 3d printing, machine learning, artificial intelligence and put it in context, we can think of these as inputs and outputs. Robotics, 3d printing, these are creators of data. These are things that are creating data that’s making the data quote big. On the other hand you have machine learning and artificial intelligence, these are the logical extension of having all the data. Now that we have the data, how can we get one step closer to intelligence? Think of this first wave of data as the rise of oracle, relational databases, structured data. Second wave, roughly advent of Hadoop, distributed systems the ability to store unstructured data. Today, we’re constantly bombarded with the idea of data. Everyone has statistics on what happens in an Internet minute. The one thing worth of highlight in manufacturing, this is generally true for all industries, but for manufacturing specifically the data historian has been collecting large scale time series data for many decades much longer that Pinterest and Twitter have been collecting favorites and collecting likes. That was all step back looking at the past, looking into the future everything is up into the right, take sensors for example: In addition to all of the devices things that have already been connected to the internet Gartner expects that every single day 5.5 million additional devices and quote things will be connected to the Internet. Likewise, platforms, we had the rise of pcs followed by the internet followed by social networks, and most recently smartphones. In the CACK WILHELM Cack joined Scale Venture Partners in 2014 and focuses on investments in next- generation enterprise software companies, with a particular emphasis on the cloud infrastructure, big data, DevOps, and security sectors. Cack’s efforts have led to Scale investments in mobile database company Realm and cloud analytics infrastructure company Treasure Data.
  20. 20. 20 THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar same amount of time the adoption of smartphones was ten times biger that of PCs. Lastly, we all know what happens in an Internet minute, number of tweets, number of YouTube videos downloaded number of emails sent. What’s more interesting in this context and especially as an enterprise investor is what’s the amount of data that streaming off an airplane, off other industrial systems, off wind turbines, etc In the old world we would all agree that Fiat, Chrysler, Honda these are all asset intensive businesses. Fast forward, Uber owns 0 vehicles and they command the supposed private value of 50 billion. Fiat and Honda are real asset intensive and Uber is data as an asset intensive. Data can no longer be ignored. Uber is the classic canonical text book case of network effects. As the number of drivers rise, the number of participants rises on the platform, a number of things happen. Drivers don’t wait as long between rides, passengers don’t want it along to hail a cab or the today’s equivalent of a cab. Prices are optimized, bad actors are weeded out and as a result you reach this natural equal equilibrium between supply and demand. This is going to be true across markets for Uber. Secondly Ubers canonical case of moving to a service model. Instead of selling you the car, Uber sells you a ride inside a car and as a result they’re able to really effectively match the value generated with the value received on the other end. Now Uber is not doing this for the good and for the love of passengers and drivers. As a result, Uber is collecting the superset of data. Every single ride over collects a little bit more data by the second and as a result they’re able to finally tuned their models, they better improve prices, better optimized for supply and demand. Uber ends up with a computational advantage. The winner in this space will be the one with the most data. The reason being that yield man that ride sharing is a very complex yield management equation and it’s one that’s dynamic and always changing there’s nothing static about it. Another great example: Nokia, we all think of it as a hardware Company classic competitive strategic advantages they had scoped, they had great supply chain, R&D and beat R&D Budget. Apple had less than ten percent market share and they had something that hadn’t yet been recognized and that was a platform. As you can see here the value of Apple is not the hardware along. That value of Apple is a combination of the hardware, which we all know in this room is very hard, to take raw material supply chain is very complex. In addition, the differentiated software. The Apple App Store brings together producers and consumers in a very high value exchange of which Apple takes a cut of each and every one of those transactions. Unlike many hardware products where you buy it once, you never interact with the producer again. With Apple it’s very likely that all of us continue to interact with Apple. We may buy music, we may read movies and subscribe to Apple Music, these are all marginal cost near zero and Apple able to drive a lot of this premium. The iPhone in total to date has generated more than six hundred billion dollars in revenue, arguably one of the most successful products ever. Data volumes are increasing, they are accelerating and it’s only going to get worse. It is expected that by 2020 almost ten percent, maybe more, of data will be generated at the edge. So you can think of it as we are drowning on data and it’s this perfect storm of factors. Take cloud for example, Amazon web services, a developer
  21. 21. 21THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar can spin up compute and storage in a matter of seconds and you can build a company with less than five thousand dollars. Connectivity, sensors, battery life and all things are miniaturizing (e.g. Raspberry Pi). You’re able to put sensors into more and more things. Lastly, data silos creating all of this data, but unfortunately creating the perfect storm of factors mentioned before. As a result, we have this fallacy that more information is going to give us more intelligence, more money we spend on software startups in San Francisco are going to all of a sudden bring us the insight. Automation has been around in manufacturing for many years, however, there are more cases where automation can truly be harnessed. Machine learning is meant to be overly complex and that’s unapproachable. In the general case, machine learning is trying to take the burden from humans to machines to do the advanced computation, the experimentation and the model training without constant oversight from humans. It´s the scientific method on steroids. Every company is starting to move in the direction of becoming a software Company. JPMorgan rumored to have to employ more software engineers than Google which is hard to fathom. Jamie Dimon is very outspoken in his search to becoming a software Company and utilizing more and more algorithms. Likewise, Capital One, we think of their products is being credit cards, there CIOs are thinking that his products are software and data. Disrupting commerce is way easier, disrupting manufacturing turns out really hard. You can’t replace an airplane with software. You can make a better airplane; you can do so faster you can do so differently but you can’t in fact replace it. Turns out Honda and Fiat still has to sell cars to Uber, to Uber then drive us around as passengers. In the
  22. 22. 22 THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar autonomous car case, we still need the cars. Drivers may be optional, but we still will need the cars to get around. American Airlines has to buy airplanes. They may be able to better service those airplanes, they may be able to predict maintenance better with the use of data. But they still have to deliver those airplanes. You can really think of the way machine learning is going to impact industry and in two different ways: (1) the way of improving the process of making things (2) the second improving actual products themselves On the first, “automating the process”, Rio Tinto (mining giant in Australia), use autonomous trucks to transport iron. That is improving their process, granted it’s in the natural resources sector not manufacturing but same idea. Amazon right now in their warehouse floor, machines robots are running around putting packages together to deliver the end product to our doorstep more quickly more effectively. On the second piece, “improving the product”, think about how software has played into the rise of Tesla. Tesla instead of delivering your car, you driving off and never improving the car again, can just update a few code snippets, push it to the car, and you have an improved car over the air with no visit back to the dealer. Predictive maintenance, is a far cry from this dawn of Singularity. Automating the process of manufacturing as opposed to automating the end product. Design, creation and modeling, are tightening up and moving to a virtual world with the help of digital. The iteration cycle is happening faster. For example if you visit to the San Francisco recycling plant, it’s actually a sight to behold. Humans working alongside machines, conveyor belt going every which direction, robotic arms trying to pull off the big cardboard boxes, etc. There is a lot of innovation happening in this space. What’s most interesting we have all the use cases, in fact there are so many brains applying themselves to coming up with companies in the space and trying to take these use cases make some optional, operational and deliver them to all of you. Maana for example just raise 26 million dollars last week from a combination of some extremely good corporate VC’s, focused on creating an enterprise knowledge graph and focused exclusively on manufacturing and Natural Resources. Site machine, canonical example in manufacturing, again west coast based, they’re trying to create a data hub collecting data from sensors, from databases, from plant equipment, from every which direction system of record and trying to analyze all of it, and create insights. That’s everybody goal. Falconry claiming to do artificial intelligence with sensors specifically, time series data is increased incredibly hard compute problem and they’re trying to tackle it from the sensor side. Moncler they make expensive puffy coats in the East in Europe and they’re in bedding unique identifiable sensors into every coat with the object goal of reducing counter foot good. As things become more and more connected we’re going to have more target cases. HVAC units being infiltrated so we have to be wary of this. Computer must move to the edge for technology to disappear. We can no longer have this tethered piece to the cloud brain, whereby all of the intelligence is happening in the cloud or bandwidth and connectivity are going to be overwhelmed. You’re seeing early signs of this: Google open source Tensorflow and turns out that you can in fact run small scale
  23. 23. 23THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar examples of tensorflow on a mobile phone. Secondly 3d printing, in the case of manufacturing for discrete parts and complex pet products, especially as the design cycle iteration utilizing 3d printing to get the modeling out the door more quickly. Lastly drones and augmented reality now. Virtual reality will be a much more of a consumer and much more of an entertainment focused use case. That said, we’re due for a platform shift. Smartphones was really the last platform that emerged, and that was in 2007-2008. Historically it’s been every seven or eight years. Drones and augmented reality have a place and they will be roommate. Cack finishes saying that she has two more thoughts: • “More data will always beat better algorithms.” • “Lastly the reason we’re here is because the pace of innovation is changing and it’s changing rapidly. This is empirical and this is known, if you haven’t come away from the morning picking that up then we failed. But what remains is the pace of an option, it’s up to all of you, to each individual enterprise, each individual manufacturing company, each business unit, each business leader, to determine how and where you’re going to utilize this data to generate a competitive advantage.” ***
  24. 24. 24 THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar Para profundizar recomendamos VIDEO DE LA CHARLA https://www.youtube.com/ watch?v=cQpjcrxo5I4 ARTÍCULOS Data Driven Smarter Industrial Systems http://es.slideshare.net/ScaleVP/data- driving-smarter-industrial-systems HERRAMIENTAS https://www.maana.io/ http://sightmachine.com/ http://falkonry.com/ http://uptake.com/
  25. 25. 25THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar EXPONENTIALS: ENERGY (DISTRIBUTED & SMART) Ramez Naam. Professional technologist and science fiction writer. Ramez starts the speech talking about the disruption of energy, because energy which has been a fairly static industry for decades is now an exponential industry with rapid changes in technology. Ramez says a few years ago he wrote a book about the challenges of Natural Resources and environment and the question: “Can we innovate fast enough to overcome them?”, and what he found in doing the research for that book is that the technology progress in the energy space is incredibly rapid and far faster than most people take for granted, and if we play out those trends and take the math seriously it has staggering consequences. Ramez also says he is a clean tech investor, so he come at this from a perspective looking at where they’re good deals, where there are opportunities to disrupt markets and also build large new markets and large new companies. Wind power might look like a stagnant 19th century technology but it’s actually one that has changed tremendously. Over the last dozen years, the amount of wind power we have deployed to buy a thousand percent (x10). That’s not normal in the energy field, and that happen for a number of reasons: Policy pushing it was a big one, but that policy would not have been effective if it were not for an exponential decline in the cost of wind power. Whole power, electricity prices in the US are around seven cents. Let’s say in the nineteen eighties wind power costs nearly 10 times that much per kilowatt hour, now, last year, the average price of a new wind power long-term contract in the US was actually 2.3 cents per kilowatt hour and the cheapest were below 2 cents. That is a staggering drop in the price of wind energy and it’s been driven by a huge amount of innovation in the sector. A basic thing is that we have learned to make these wind turbines bigger. Why does that matter? Well higher up the wind blows more steadily and it blows faster, so that gives you an advantage. And secondly, the amount of power you get from a wind turbine is equal to the area the blade sweeps through, so if you can double the blade length you can quadruple the amount of power you’re capturing. You can also capture lower speed winds. So as we’re learning more and more about manufacturing techniques, about new materials we’re able to tap into these, and we can see how the price of wind power has plunged as the scale of these turbines has grown, and this leads not just to more power at a lower cost, it leads to steadier power. Today the wind fleet operates at a thirty percent capacity factor. That means that a wind turbine produces about thirty percent of the max that is expected for, but as we get towards taller and taller turbines the Department of Energy expects that within a few years we’ll be able to get sixty percent up time of these wind turbines, and now it no longer looks like an intermittent platform for energy but more like a steady one. GE is one of the leaders worldwide in the development of these new wind turbines and innovating in new ways like the GE space frame to build them RAMEZ NAAM Naam was involved in the development of software products such as Microsoft Internet Explorer and Microsoft Outlook. His last role at Microsoft was as a Partner Group Program Manager in Search Relevance for Live Search. Naam currently holds a seat on the advisory board of the Acceleration Studies Foundation, is a member of the World Future Society, a Senior Associate of the Foresight Institute, and a fellow of the Institute for Ethics and Emerging Technologies.
  26. 26. 26 THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar taller while transporting them. Big data, machine learning, and so on, that is also vital here because these individual turbines are intermittent. What was found is in cases like Colorado with the excel utility there, using sensors on the wind turbines collecting that data and putting it into algorithms to do predictions of which turbine was going to spin at which speed, a few minutes from now, a few hours from now, on a day from now, allowed excel to triple the amount of wind power they could put on their grid and that saved them billions of dollars, because it is the cheapest power they could buy in their state. As we mentioned before, higher up the wind blows more steadily. Marc Andreessen says software is eating the world, and this is an example of that: A prototype that’s not in production yet about a blimp that has inside of it a small wind turbine, and it is actually a drone, it flies under computer power and it can hover about 500 meters above the ground (three times taller than the tallest wind turbines) and tap into those high-speed winds and then drop down in the case where the wind is too high for it to be safe. Or as another example there’s another drone from a company called Makani power in the Bay Area. It tilts back, takes off under computer control, flies up to as high as a kilometer up tapping into those high-speed steady wins; You could never pay the capital cost for a kilometer-tall tower but you can pay the software costs to self-steer this drone and then act as a giant wind turbine in the sky. This company was acquired by google two years ago who wants to bring it to production. Another point to highlight is Solar energy. There has been an incredible pace of innovation in solar panels. They are made of a chip and if we wanted to plaster thousands of square miles with intel chips, the cost for that would be Quadrillions of dollars, it would be impossible. But, like silicon wafers solar power has had a ferocious and exponential cost decline over the course of the last 30 years (it has plunged by 200 times), that means we’re now seeing solar energy winning deals without subsidies in various parts of the world. It happens especially in places where
  27. 27. 27THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar the 1.3 billion people that don’t have electricity today live and about three- quarters of the world’s growth in energy consumption over the next few decades will be which is a relatively sunny area. Regarding Cross-over, one physical case worth mentioning is a natural gas plant in the US the EIA estimates this cost seven and a half cents per kilowatt hour if you build a new one. In Chile we’ve had about a dozen deals and an average price about six cents per kilowatt hour without subsidies, China (the Gobi Desert) also got six cents, India an Ambar ultra-plant 4 gigawatt plant, an enormous plant the size of four large coal powered plants and capacity at about six cents per kilowatt hour, and in the US six months ago First Solar sold to Berkshire Hathaway a 3.9 cents kw/h central in our deal and then last month the city of Palo Alto bought solar from a company in LA at 3.6 cents kw/h. Now this is a subsidized price, but back out all the subsidies about five cents per kilowatt-hour and it’s still about a third lower the price of new natural gas and its producing at peak demand time. And around the world is even better than that, Mexico: the average price in their solar auction last month was 5.1 cents, the lowest price was 3.5 cents unsubsidized. The price in the US in the last eight years has plunged about 80%, just a phenomenal pace of change. In Dubai, one of the oil capitals of the world, this 800 megawatt plant a giant plant being built by Aqua Power (a Saudi firm) and this price did with no subsidies for this plant for the next tranche was 2.99 cents, about half the price of natural gas. In the last three years we’ve gone from solar being completely uncompetitive to solar in sunny parts of the world crushing all other competitors as far as price goes up and that has helped drive an enormous explosion. Wind power scaled by a thousand percent 10x in a dozen years, Solar has left that in the dust a 100 times growth in 13 years. For now, this explosion is unlike anything that we’ve seen in energy. This happens for a lot of reasons. Manufacturing scale, one of the first Exponential’s we ever saw is that the price drops along the learning curve, and this curve is quite ferocious, 20 to 25% reduction in cost per doubling of scale, and that’s going to keep on going for quite some time. That allows the industry to reinvest revenue in R&D to make more and more efficient cells that capture more of the sunlight that hits them, so the prices are going to keep dropping. We are very far from done yet and the prices that you see in Dubai or Mexico will one day be the prices in California, and then after that they’ll be the prices in Middle America and we will have the ability to extend the grid to spread out but, what do you do if the Sun isn’t shining or if the wind isn’t blowing? These are still intermittent resources, no matter how high their capacity factors are. With good integration, you have a far steadier output. Diversity, you can put solar and wind together. We think now that about eighty percent of electricity meet needs in California can be met with no storage just putting together solar and wind and large-scale grid connections. There’s also another kind of challenge that happens because solar is getting so cheap so fast. For a long time, the power prices that you all had been paying are highest in the middle of the day, because that’s when peak demand is (Supply and demand: there’s more demand the middle of the day in the late afternoon so prices are higher), but as solar comes online or perhaps a decade away from a point where the middle of the day power prices in much in America are at the lowest prices because it’s a surplus of power
  28. 28. 28 THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar right then and there. Internet of Things. You hear a lot about smart power, and that’s what this means is being clever about how and when to use energy to match the prices you want. Nest company bought by Google. Why does google want a thermostat? Because this is part of the smart grid. This thermostat knows if someone is home and it has a connection to the utility, and if the utility sees that a very expensive peak of power demand is coming late that afternoon because it’s a hot day in Austin, then they can reach out to these nests and say “hey we want to avoid that peak run the air conditioner a little harder a couple hours early and then we won’t have to have such a high peak demand”, and spin up new power plants and the person at home never notices this is happening and they get a reward. They had a kickback from the utility because this is a savings of tens of billions of dollars potentially across the country. In Europe it’s hot water heaters, so these hot water heaters increasingly are getting smart. They know when the power cost is low; in Europe it’s when wind power peaks sometimes it might the price drops to zero or negative, utilities will pay you to take energy, and so these connected smart water heaters know that and say we’ll take that will save it up for the morning. Or data centers, the world’s data centers use now about 12% of electricity and growing; all that IOT and cloud stuff it’s not for free, it’s real and it exists in places like this, and they’re becoming increasingly smart being able to absorb load. Another example are electric vehicles; if you have a Tesla you already know that has programming to go for low power prices or during the day they sit at work and whether its own solar panels at the workplace or just the solar utility-scale attention to the grid, when that price drops during the peak hours of the day that car is sitting there and ready to be charged and provide services of the grid by being able to soak up the extra. Water. In West coast California where there is a massive drought, we can desalinate water. Desalinated acceleration is expensive but about half the cost is energy costs, so this is somethingyoucandowhentheenergy gets the cheapest; a desalination plant in Dubai consumes 12 gigawatts of power and desalination about 500 million barrels of water gallons of water per day. Mapping that the lowest energy prices suddenly allows you the flexibility didn’t have.
  29. 29. 29THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar Ultimately though you need energy storage. We all know who Elon Musk is. He’s announcing the tesla powerwall battery, and the funny thing is Panasonic makes that battery and it’s got a Tesla casing on the outside; but it’s not some technical breakthrough that got them there it’s a long-term exponential trend. A tripling in the amount of power you can store program and a 10x reduction in the cost of batteries over the course of the last 20 years and that keeps on going. In Germany now it looks like with a small battery, about half the size of the powerwall, and a small solar panel a German household can provide about seventy percent of its own energy in summer months. So if your utility and your business model is charging by volume, what happens to you in this world? Businesses models are going to have to change and now we start to see utilities wanting to own that solar panel so they can get it on both sides, and the ones that flourish will do that but Tesla got a billion dollars in pre-orders the first week they announced the battery most of them did not go to homes ninety percent were for this size battery which went to businesses, commercial spaces, factories and utilities and now every manufacturer in the world that does solar is moving into the same thing. Trina solar battery, the largest solar company in the world, about a 1 megawatt hour battery, and they go after some very simple scenarios, even if you don’t care about solar that’s probably the case that you pay one price for energy at night that’s very cheap and another price during the day; in California that Delta is about 20 cents per kw/h. Guess what? A battery is cheaper than that now, so you can fill it up at night with cheap power and then discharged it during the day instead of using that expensive power. Battery prices are not done coming down. There is a whole range of different forecasts about where battery prices would go and these analysts (including the EIA) said that there would be huge drops over a 10 years’ period. Batteries also follow the exponential learning curve, as they get higher scale they drop in price and they do so it basically the exact same pace as solar. This leads to a crazy idea being that energy going clean might actually be cheaper than dirty energy, we’ve always assumed that going clean meant higher prices, but now we’re starting to see even very conservative organizations say that it might actually be cheaper. The IEA says solar will be the dominant form of electricity in midcentury and the cost will be unbeatable for UBS. They said renewables are now deflationary to energy prices. We’ve coupled the cost of energy to the ever-declining cost of technology. It’s like your Kodak: you think these digital cameras will never catch up. The world is now to using more clean energy per year than dirty energy, and we will never look back. The former Saudi oil minister once said: “The stone age didn’t and for a lack of stone, and the oil age will end long before we run out of oil”. He’s warning us that the world is going to produce a technology replacement
  30. 30. 30 THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar for oil. Oil fluctuates by a two percent, two million barrels per day difference in supply demand has caused this huge oil fluctuation that nobody predicted it, but we are headed there and ELECTRIC VEHICLES are going to get us there. The EIA forecasted that we’d be selling 1,000 vehicles a year with a 200-mile range by 2040, so you just can’t trust the experts in this, trust the technology and the innovators. And as the battery prices come down we’ll sell more EVs which will bring down the cost of batteries, which will make EVs cheaper, and we’ll some more EVs as a perfect virtuous cycle. By 2030 they’ll be cheaper than the cheapest car sold in the US. The long- term price of oil is very cheap as our demand drops.generated over sixteen billion dollars in revenue. *** Para profundizar recomendamos VIDEO DE LA CHARLA https://www.youtube.com/ watch?v=9Ui-4MxgeW4 ARTÍCULOS Meet the Makani Energy Kite http://www.alternative-energy- news.info/makani-energy-kite/ The floating wind turbine that thinks it’s a blimp http://www.wired.co.uk/article/ turbine-blimp This wind turbine can think for itself http://www.wired.co.uk/article/ thinking-wind-turbine This Plant in Dubai Makes Half a Billion Gallons of Fresh Water a Day http://time.com/3625511/this- plant-in-dubai-makes-half-a- billion-gallons-of-fresh-water-a- day/ The Claude “Bud” Lewis Carlsbad Desalination Plant http://carlsbaddesal.com/ HERRAMIENTAS http://www.trinasolar.com/sp/ index.html
  31. 31. 31THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar HACKING ATOMS: THE FUTURE OF ADDITIVE MANUFACTURING Andre Wegner. Founder and CEO, Authentis. Andre is a frequent speaker on emerging intellectual property issues in 3D Printing and opportunities of distributed manufacturing at events such as Singularity University, Rapid, Designer of Things, Inside 3D Printing, 3D Print Show, Pacific Crest & WIRED. He has been quoted in publications such as BBC News, MIT Tech Review, Chicago Tribune, and Bloomberg. He is an expert in greenfield value chain creation, leading the development of a $300m low income gas distribution business for West Africa’s leading Oil and Gas company. Andre starts his speech talking about additive manufacturing, and mentioning the spike in the stock prices. He says that it’s not over. Over the last couple of months especially, there has been crystallizing opportunities in the additive manufacturing space, it’s a bit like the internet was for digital products. We’re realizing that it impacts have absolutely everything we do around us. Andre says they’ve been crystallizing out one of the opportunities that “really makes sense” and in that process they’ve been filtering out the stuff that doesn’t work. One of the things that has been coming for the last year, especially over the last 18 months, a lot of speed innovations. HP came out with a printer at end of 2014 and said it was 10 times faster than its predecessor, for example, and now you hear Chinese companies saying they can make a printer of five hundred times faster speed. Electronics is also an area that is growing rapidly. A lot of startups in that space, but also established companies like a Xerox investing “Hot Lips”, looking about how we can combine different electronic components in the 3D printing process to enable us to print entire circuits. Lot of innovation happening both in PCB, prototyping, but also in printing an electronics onto materials such as clothing to have flexible electronic printing. A third area of technology that’s really going to boost in the last 12 months is metal. Metal is being driven by a lot of industrial applications, different kinds of approaches to actual problems or obstacles. What’s driving all of this innovation is really the fact that managers have now started to engage with the technology, and are dictating the innovation agenda for additive manufacturing. We’re becoming a lot smart about where we are investing our money, because the companies are getting more signals from where you and other manufacturers like you tell them what needs to be done. What they’re doing with this is clear, in three areas: Prototyping, Tooling and Direct production. Andrethenkeepsongivingexamples in different areas where innovation has played a huge part, such as Medical with fully porous acetabular cups, that grow go up to twenty-five percent faster into the bone reducing healing times, or in space where SpaceX has been flying 3d printed components since 2014. ANDRE WEGNER He is a frequent speaker on emerging intellectual property issues in 3D Printing and opportunities of distributed manufacturing. Prior to founding Authentise Andre also managed a venture capital fund in Nigeria and advisory services in India. Andre is a graduate of St. Andrews University (M.A. - UK), ESSEC (M.Sc. - France) and Singularity University (California).
  32. 32. 32 THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar As Andre mentions, a lot of applications that are being developed on top of those innovations because managers are finally setting the agenda, and showing us where we have to go. Singularity had a very special visitor: 3d printed supercar done by a company called Divergent. It’s twice the power to weight ratio of a Bugatti, and reducing the tooling costs from 250 million dollars for small series car to16 million dollars. Let’s just repeat that, for car that makes that’s made in volumes about 10,000 a year, tooling cost is down from 250 million dollars to 16 million dollars. Andre then reinforces: “A lot of different kinds of industries being impacted and what we’re seeing is as a result of these innovations is that people are coming up against barriers, all the time…” He then talks about the case of Invisalign, suing clear connect in front of the International Trade Commission saying that Clear Connect was breaking its patterns by processing the files for those Invisalign teeth that Clear Connect makes by processing them in Pakistan and importing the digital file to print it in the US. The barriers keep on coming. Experimentation in 3d printing make us have to look to rewrite sections of the law to account for the fact that we can now import digital products, but as a result of all this experimentation the percentage of finished parts industry is dramatically changing. Their additive industries dramatically changing, and we see this kind of exponential curve going up the volume of additive manufacturing fit a final parts, and this doesn’t even account for some of the really big examples like the assets of acetabular cups, or the fuel injection nozzle, examples we mentioned earlier. Massive innovation in terms of a going from a purely prototyping industry, to one that’s a really a production alternative. There’s an estimation going on that says that in five years we will be printing shoes at home. A lot of smart people are working on very specific applications that makes sense to how to apply additive manufacturing. It fits really neatly into a growing exponential curve. The next step on the agenda is a moredata-drivenagilemanufacturing environment, an estimate added the additive manufacturing landscape wall will run and lead. Andre then mentions Minecraft, and says they reckon it as the biggest 3D design tool in the world, because you can export directly the 3d images directly from there into 3d prints. So if you have kids and are playing with those tools, and you’re getting upset about how much time they are playing on it, there’s a way for them to engage with a 3d reality and make those physical. What’s important here is that amazing ease of transition we’re going from a digital file which we can now design in an augmented reality space, to a physical product in the drop of a hat. The process, every part of the value chain is hard right now. To get a file from ideation to production you need to go through many steps, dozens of manual steps to get the part into production. Andre walks about one how of his clients, that’s a major sports
  33. 33. 33THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar manufacturer, wastes 15 to 35 minutes per design being printed, and that’s completely unsustainable if you want to go into a production environment. The reality is that transformation that you see in Minecraft still isn’t as simple as it could be, and the importance of combining those parts becomes evident. Andre then goes on explaining some of the converging technologies that he thinks are running into the additive manufacturing sector, for example sensing (Google Tanger project, 3D additive and subtractive machining in the same machine Combining those four different trends and you have a very cheap sensors detecting whether a part has broken ten years after it was produced, you take that data into the cloud and you use machine learning to identify why it was broken, you take that data and push it into a generative design tool that and redesigns the tool, including the microstructures to give more strength to the part, and finally pushes that whole thing into a “factory in a box”. We can combine the full production system in a much better way than we could in any previous manufacturing time. What’s important is that we are switching between a control loop that was just in the machine, to one that is across the entire value chain, from the IOT space into the design space. Andre reinforces there’s a lot of work for us to do, and as we’re doing that tend to realize that it’s not only our engineers that will be affected. If we look at the entire production landscape, we’re integrating this whole thing to make a production much more efficient, and of course is going to be impacting absolutely every part of every organization. We are beginning to realize that the layers of value are the startups that are operating in the space of specializing, Imax does the same for the gaming industry and allows you to print objects right out of your computer game. Andre’s realization was that actually because of the integrated nature of additive we are a sandbox; we are a digital lightning rod for what additive or what the digital manufacturing landscape might become. It’s important because manufacturers need to become more agile. Li & Fong recently, as you know, met massive trading house between Asia, the US and Europe but they only lost five percent of their sensinginthephone;inoneyearwewill be generating more 3d content than the previous 10), or design as another example of technologies changing radically, from one where the human designs where the human issues the constraints and designs based on those constraints, to generative design tools coming into the market that are going to make additive manufacturing even more exciting. Another example Andre gives is about architected materials: materials that aren’t driven by chemistry but they’re driven by design. You can influence of microstructures and have a part that has completely converse characteristics from what you used to imagine. Or even hybrid manufacturing, Andre talks about a “factory in a box” where you have
  34. 34. 34 THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar production because they were able to switch between different production facilities very quickly. Toyota, who’s East Coast operations were washed out with a tsunami, wasn’t able to adjust so quickly and lost the crown of the most car sold. There are many other ways in which manufactures aren’t yet agile enough, and Andre thinks this is exactly where this digital thread and the coalition of additive manufacturing with other digital manufacturing technologies comes in. We’ve gone from an environment that is a multi-step process to one that in certain segments is already fully digital integrated and allows us to explore what the limits of digital manufacturing or digitally integrated manufacturing really look like, that’s why additives important not only as a manufacturing technology but as a sandbox for digital manufacturing environments as a whole. *** Para profundizar recomendamos VIDEO DE LA CHARLA https://www.youtube.com/ watch?v=bD9w7DdYhF0 ARTÍCULOS Andre Wegner 3d printing will change 20% of manufacturing https://www.youtube.com/ watch?v=zW1vv8gwX5M How 3D Printing is killing manufacturing http://www.biznews.com/ innovation/2015/05/28/andre- wegner-3d-printing-meets- formula-1/ HERRAMIENTAS http://www.3dsystems.com/ https://glowforge.com/ http://www.stratasys.com/
  35. 35. 35THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar THE BIG SHIFT: THEN, NOW AND TOMORROW John Hagel. Co-Chairman, Deloitte’s Center for the Edge. Our global economy is rapidly shifting to a new set of rules, and industries are being fundamentally reshaped. Few arenas are as affected as manufacturing, which is re- inventing everything from the ways that products are envisioned, to the ways they are delivered. What does this Big Shift mean for manufacturing in the future? John says his speech will focus on some of the business implications of all exponential technologies. “Where is the money in all of this?” he says. When we talk about exponential manufacturing it implies there are some boundaries there that are important and relevant, and at one level we are, but another level one of the challenges and opportunities of this exponential world is all those boundaries that were so familiar with are blurring, and we need to think beyond the boundaries. In that context it was mentioned that John has been doing work at the center for the edge about what they call the big shift, which is a view about how the business world on a global basis is transforming over a period of decades. His belief is that this big shift actually isn’t out in the future, it’s not even today, it’s been going on for at least 50 years. The big shift is going to be profoundly disruptive to all businesses, all businesses will have to change in some pretty significant ways, not just manufacturing. One of those ways is recaptured around the notion of push to pull. Traditional businesses that have been built up and been very successful to date, have been built around a model of push as a resource mobilization. The key in push models is that you develop a forecaster prediction of demand, and then you push all the relevant people and resources into the right place, at the right time, to meet that demand. Hugely efficient way of organizing and mobilizing resources, if those forecasts and predictions are accurate. In an increasingly uncertain world, in an increasingly exponential world, their belief is that the companies that will succeed in the future are those that master scalable pull platforms. When we talk about scalable pull platforms, we’re talking about platforms that involve tens of thousands, hundreds of thousands, and an increasing number of cases millions of participants that can be drawn out, pulled out, when needed and where needed as needed. A very different approach to mobilizing and organizing resources, and requires significant changes in all our business practices. Based on John’s research, the leading edge companies in terms of scalable pull platforms are not in the United States, or Western Europe, they’re actually in China and India. There are companies that area doing some very interesting things around scalable pull platforms, in industries as diverse as apparel, motorcycles, agricultural products, financial services. John then talks about a chinese company called Li & Fung. They are in the clothing apparel Industry, their customers are the brand apparel designers that we all know and love such as Calvin Klein and Taylor. They JOHN HAGEL co-chairman for Deloitte LLP’s Center for the Edge with nearly 30 years of experience as a management consultant, author, speaker, and entrepreneur. He has served as senior vice president of strategy at Atari, Inc., and is the founder of two Silicon Valley startups. Author of “The Power of Pull,” “Net Gain,” “Net Worth,” “Out of the Box” and “The Only Sustainable Edge,” John holds a B.A. from Wesleyan University, a B.Phil from Oxford University and a J.D. and MBA from Harvard University.
  36. 36. 36 THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar organize all the activities required, from sourcing of raw materials through all the stages of production, all the logistics, to deliver to whatever retail distribution center you specify anywhere in the world. The really interesting thing about Li & Fung is that they do none of that themselves. They operate through a global ecosystem network of over 15,000 business partners who do all that activity. Li & Fung is the orchestrator of all that activity but they don’t do the activity, they have created scalable global pull platform involving 15,000 partners at a time. When Western companies are steadily shrinking the number of partners in their global supply chains in the name of efficiency, Li & Fung is adding more partners every day, they’re expanding. We’re in the early stages of a big shift that is going to be profoundly disruptive, and one of the key questions that we would put on the table is: Where should I position myself in this big shift, in this new global business landscape? There’s a debate that’s been going on in Silicon Valley for decades, and it has two sides that are very passionate about their beliefs. There’s one side of the debate which argues that the impact of all this digital technology is to fragment everything, we’re all going to become free agents, independent contractors will loosely affiliate when we need to around specific projects, but basically companies are dinosaurs, we’re going to fragment down to the individual. The gig economy to the max. There’s another side with equal passion and conviction that argues actually because of network effects, digital technology is creating a winner-take-all economy, where there will be a very few global entities highly concentrated that will capture the vast bulk of the economic wealth and everybody else is going to be marginalized. John’s team came up with the answer: both the right. It just depends on which part of the economy you’re talking about. Their belief is there will be fragmentation in certain parts of the economy, and there will be concentration consolidation in other parts of the economy. If they’re right about that, if you are a large company today or have aspirations to be a very large company, you sure would like to be positioned in the parts of the business landscape that are going to concentrate and consolidate, because if you’re in the fragmenting part of the landscape life is going to get harder and harder for you as a large company. Fragmentation is going to occur largely. Product innovation/ commercialization businesses coming up with creative new products, getting them into market quickly and accelerating the adoption of those products. A variety of forces that we see driving this, one force is the notion that the means of
  37. 37. 37THE FUTURE OF MANUFACTURING 2016 For more information: contacto@inpeople.biz | ciel@iae.edu.ar production are becoming more and more accessible, in part because of these technologies used to be that if you were going to create a music record, you needed to go into an extraordinary expensive studio to produce that record. Now you can do it in your garage with equipment that’s affordable by virtually anyone, so the means of production are becoming more accessible, and if they’re not affordable, they’re available increasingly on a rental basis. I don’t need to have a chip facility; I can rent capacity in somebody else’s facility if I got an interesting chip design. On the other side you have platforms that are emerging everything, from funding platforms to talent platforms, to market platforms, that can help provide a small business with access to whatever it needs to create and commercialize that product. In digital media, from music to video to software, there is increasingly fragmentation of product businesses, because more and more people can participate at much smaller scale. John’s belief is there are certain variables that you would look to to assess the vulnerability and fragmentation, part of it has to do with regulation, part of it has to do with product complexity, size and weight, and issues around just functionality of the product that can be digitized. How much of the product today that’s physical can be digitized and delivered in digital form? The concentration and consolidation will occur in a different part of the economy, according to John. In several areas they’re already seeing significant concentration and consolidation in infrastructure service. There’s a second part of the economy that they believe are concentrating and it has to do with aggregation platforms. Aggregating resources that are value to a lot of participants and making those more readily

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