Making it here

Written By: - Date published: 10:42 pm, July 1st, 2012 - 14 comments
Categories: business, Economy, employment, exports, trade - Tags:

Instead of the usual line-up  of finance-company flacks and failures that usually litter their pages, SST Business Editor Rob O’Neill wrote about something really  positive and interesting in today’s paper.  He had this to say (not on-line yet):

There is a great deal of lip-service paid to “innovation” in business. It’s become a term that is often trotted out in a knee-jerk and meaningless manner. What is not often acknowledged is how embedded innovation can be in a manufacturing. Making stuff, or being able to talk freely with the people who do, can be a source of inspiration and great ideas for companies.

He’d picked up on the fact that Google’s new Nexus tablet was made in USA – and that companies like Google and Caterpillar have decided to manufacture  new hi-tech equipment at home rather than abroad. He continued:

They tentatively report increases in quality and agility by having their manufacturing close to their design and engineering teams.

That really resonated with me because on Friday I spent the day listening to a Swedish academic, Goran Roos, talk about the importance of manufacturing to a modern economy. Roos has been engaged by Jay Weatherill, Premier of South Australia, to lead their manufacturing strategy full time from next year. He is to South Australia as Sir Peter Gluckman, the PM’s science adviser is to New Zealand. I heard Sir Peter at Te Papa a couple of weeks ago as well, and in my opinion Roos was much more relevant and  inspirational. Here is one taste of him talking about the difference between a commodity mindset and a value-added mindset. You can google and find more.

That is why O’Neill’s comment is important. Making things, manufacturing, drives innovation. So can science if it is applied, but the application will likely be in manufacturing.

And Roos is not talking about simple manufacturing, like drying milk and turning it into powder. 3-d printing has revolutionised the process of “additive manufacturing”, as the Economist outlined in a recent article, and increasingly it will make sense to bring the high end of manufacturing back closer to home.

Why is manufacturing important? It is the biggest spender of applied research and innovation, the key driver of productivity improvement, makes up the biggest share of world trade, is the largest driver of high value services. Manufacturing generates on average between 3 and 5 jobs in the rest of the economy.

That is why the US and Britain are desperately trying to rebuild their manufacturing sectors. Countries like Denmark and Sweden which have retained a strong manufacturing base in the key production cycle components can sustain a high standard of living and a high level of public welfare. It is why Germany is the strongest economy in the Eurozone.

New Zealanders pride themselves on their No 8 wire approach to innovation. We should be more proud of, and hear more about, the company that I sat next to that uses 3-d printing and titanium powder to make high-value components.

While he was here Roos spoke to and got a good hearing from a wide range of companies, business organisations, government departments, unions and politicians. IMHO we need to hear more from people like him and about those of our manufacturers who still do make innovative products in New Zealand, and less from the same of line-up of bank economists and  traditional economic institutes all trotting out their lines from the same old dog-eared textbooks of the 1970’s.

They are where the future lies. Please keep it up Rob O’Neill.

 

 

 

 

14 comments on “Making it here ”

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  1. Draco T Bastard 1
    2 July 2012 at 12:51 am

    What every society needs:
    1.) Fully automated factories capable of building anything designed (this is where 3d printing comes in)
    2.) Massive amounts of R&D – needed to maintain and update the factories and to design new products
    3.) An education system capable of supporting the R&D
    4.) A political and economic system that removes any dictatorial aspects, distributes resources wisely and sustainably, and is accountable

    Not necessarily in that order.

    Trade thus becomes a swap of ideas (R&D) rather than products.

    • Colonial Viper 1.1
      2 July 2012 at 1:36 am

      Nah mate, in a time of energy and resource depletion, human beings are the most resilient and easy to maintain production resource. Bit of food, bit of water, bit of rest, and its all go.

      Not like robotic factories which need a multitude of high tech spares sourced from around the world simply to keep going.

      People working is going to make the future, and eventually a lot of that work is going to be done in the fields, just like the old days.

      Trade thus becomes a swap of ideas (R&D) rather than products.

      Nah, energy, water and materials is what nations will want in future, not “ideas”.

      • Draco T Bastard 1.1.1
        2 July 2012 at 4:22 am

        Not like robotic factories which need a multitude of high tech spares sourced from around the world simply to keep going.

        Ah, no, they can be sourced from local resources.

        People working is going to make the future, and eventually a lot of that work is going to be done in the fields, just like the old days.

        Farming is what brought about “civilisation” or, more specifically, capitalism and what that really means is that a lot of people aren’t working in the fields. You’ve been reading too much of Greer if you think that everybody will be working in the fields with no time left over for other stuff. Hell, even hunter gatherers had massive amounts of time left over.

        Nah, energy, water and materials is what nations will want in future, not “ideas”.

        No point having the former if you don’t have the knowledge to use them.

        Yes, we need to power down and use the resources we have better but that doesn’t mean we have to go back to living in the stone age.

        • Colonial Viper 1.1.1.1
          4 July 2012 at 1:45 am

          Yes, we need to power down and use the resources we have better but that doesn’t mean we have to go back to living in the stone age.

          1940’s-1950’s with some rare and restricted access to modern-ish technology.

    • Pete 1.2
      2 July 2012 at 8:51 am

      3D printing is an incredibly interesting technology. There’s work underway to print organs for transplant from living cells using such devices.

  2. DH 2
    2 July 2012 at 10:15 am

    The 3D printing story is a good example of how NZ does it wrong IMO. 3D printing certainly has a good future but I can’t see NZ featuring in it. Anyone in the world can buy a 3D printer so there’s few, if any, long term export opportunities in it for this country. Israeli companies saw the market possibilities and started designing & making their own 3D printers, NZ ‘innovators’ just want to buy them. I want one too but I am a realist & see business opportunities that are only domestic related.

    Overseas you’ve got a whole bunch of entrepeneurial guys commercialising the open-source 3D printers. Makerbot, Bits & Bytes, Reprap & others. NZ is still discovering 3D printing, we are pretty backwards when it comes to new technology. IMO the real demand for 3D printing at the moment is for a commercial product that’s fairly inexpensive but with reasonable print quality and decent speed. The cheapest commercial products on the market all have a very high consumables cost, the cheap open-source ones have cheap consumables but poor quality printing.

    It’s the type of research & development project I reckon we need to hand more of to our ‘varsities, it’s what they’re good at.

    I agree that we need to manufacture more. It’s where the skills come from. It’s hard to innovate if you have no background in doing it.

    • Draco T Bastard 2.1
      2 July 2012 at 4:06 pm

      3D printing certainly has a good future but I can’t see NZ featuring in it.

      I take it that you’re unaware of the research being done at Canterbury University that pertains to 3D printing at the atomic level. I first heard about it a couple of years ago but can’t find the original article. Apparently we’re world leaders in this technology.

      Anyone in the world can buy a 3D printer so there’s few, if any, long term export opportunities in it for this country.

      Yep, see my first comment. A properly run economy will get people out of manufacturing and into R&D. Unfortunately, our economy is run for the capitalists instead of society thus resulting in the misallocation of resources.

  3. Draco T Bastard 3
    2 July 2012 at 8:05 pm

    Why are we working so hard?

    Yet the utopian vision of the elimination of industrial labour has in many ways come to pass. Over the past decade Sheffield steelworks produced more steel than ever before, with a tiny fraction of their former workforce; and the container ports of Avonmouth, Tilbury, Teesport and Southampton got rid of most of the dockers, but not the tonnage.

    The result was not that dockers or steelworkers were free to, as Marx once put it, “hunt in the morning, fish in the afternoon and criticise after dinner”. Instead, they were subjected to shame, poverty, and the endless worry over finding another job, which, if it arrived, might be insecure, poorly paid, un-unionised work in the service industry. In the current era of casualisation, that’s practically the norm, so the idea of skilled, secure labour and pride in work doesn’t seem quite so awful. Nonetheless, the workers’ movement was once dedicated to the eventual abolition of all menial, tedious, grinding work. We have the machines to make that a reality today – but none of the will.

    Think about it this way: If we automated everything we can using today’s technology we’d get rid of 75% of the work presently undertaken by people. This boon can be used two ways: 1) By having 75% of the working population out of work, wages decreased and the capitalists raking it in (exactly as it has been happening) or 2) by shifting those people into R&D and Arts&Culture via state supported universities/polytechnics/cooperatives. Just imagine what we could do with 50% of the population in R&D (puts to shame all the people saying that we couldn’t do it here), unfortunately, we have a system that holds profits and not paying taxes supreme and so what we could actually accomplish is degraded by the greed of the few.

  4. DH 4
    3 July 2012 at 10:49 am

    There’s no chance that even 5% of the population could ever be employed in R&D. NZ has no advantages over the world in intellectual ability, I don’t know why people think we could be some kind of R&D powerhouse.

    We need manufacturing and R&D, one supports the other. Good R&D helps bring a business idea to fruition, the manufacturing creates the wealth and employment.

    We also need to gamble, countries can win lotto too. A big breakthrough in energy would bring in more royalties than oil brings other countries. We should have been putting at least $100million a year, for at least the last twenty years, into researching solar generation and storage of electricity. It’s a gamble but a calculated one & the potential rewards are massive.

    • Draco T Bastard 4.1
      3 July 2012 at 2:05 pm

      If 75% of the work now done can be done by automated machines then what else are you going to do with the 75% of the workforce that becomes available?

      • DH 4.1.1
        3 July 2012 at 4:36 pm

        Not our problem. NZ has a population of 4 million with the potential to supply into a world market of +5 billion. We should never run out of jobs here.

        • Draco T Bastard 4.1.1.1
          3 July 2012 at 8:17 pm

          Now that ^^ is a really good example of an idiot with their head in the sand.

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    5 July 2012 at 7:01 pm

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