According to The Economist's recent special report, A Third Industrial Revolution, factories

are more efficient and will increasingly be run by smarter software. The effects are not
limited to large manufacturers, but big companies will need to stay alert to the growing power
of small and medium-sized companies and entrepreneurs.

A number of remarkable technologies are converging: clever software, novel materials, more
dexterous robots, new processes (notably three-dimensional printing) and a whole range of
web-based services. The factory of the past was based on cranking out zillions of identical
products: Ford famously said that car-buyers could have any color they liked, as long as it
was black. But the cost of producing much smaller batches of a wider variety, with each
product tailored precisely to each customer's whims, is falling. The factory of the future will
focus on mass customization—and may look more like those weavers' cottages than Ford's
assembly line.

The old way of making things involved taking lots of parts and screwing or welding them
together. Now a product can be designed on a computer and “printed” on a 3D printer, which
creates a solid object by building up successive layers of material. The digital design can be
tweaked with a few mouse clicks. The 3D printer can run unattended, and can make many
things which are too complex for a traditional factory to handle. In time, these amazing
machines may be able to make almost anything, anywhere—from your garage to an African
village.

Other changes are nearly as momentous. New materials are lighter, stronger and more
durable than the old ones. Carbon fiber is replacing steel and aluminum in products ranging
from aero planes to mountain bikes. New techniques let engineers shape objects at a tiny
scale. Nanotechnology is giving products enhanced features, such as bandages that help heal
cuts, engines that run more efficiently and crockery that cleans more easily. Genetically
engineered viruses are being developed to make items such as batteries. And with the internet
allowing ever more designers to collaborate on new products, the barriers to entry are falling.
Ford needed heaps of capital to build his colossal River Rouge factory; his modern equivalent
can start with little besides a laptop and a hunger to invent.

Many people working in factories are providing services that are crucial to manufacturing.
“In the future more products will be sold on the basis of service,” says Kumar Bhattacharyya,
chairman of the Warwick Manufacturing Group at Warwick University. “If you sell a car
with a ten-year warranty you need to make sure it will last for ten years and that you have the
services in place to look after it.” Despite high unemployment, some manufacturers say that
too few people are choosing engineering and manufacturing careers, but new technologies
like 3D printing will help, predicts Lord Bhattacharyya. “If you can build something, people
get excited about making things. Then they go and set up companies.”

One of the most successful incubators for new firms are industrial clusters, of which Silicon
Valley is the best-known and most imitated example. Firms cluster together for a variety of
reasons: the skills that are available in a particular area, the concentration of specialist
services and the venture capital from investors with a close understanding of their market.
Usually there are universities and research laboratories nearby, so the process of coming up
with new ideas and the means of turning those ideas into products are closely linked. This
relationship is set to become even more intimate with new manufacturing technologies. “We
have technologies now we are only able to exploit if we have manufacturing capabilities in
some proximity to those innovations,” says Ms Berger. You do not have to move far from her
office to find examples.

Factories and Jobs

The revolution will affect not only how things are made, but where. Factories used to move to
low-wage countries to curb labor costs. Li & Fung, a Hong Kong firm that helps companies
find suppliers in Asia, says in a recent research report that clusters like Shenzhen are “an
integral part of China’s international competence in manufacturing”. It counts more than 100
industrial clusters in China—including one, in Zhuji in Zhejiang province, that just makes
socks. It consists of more than 3,000 small and medium-sized enterprises in the production
chain for socks. As long as China’s clusters maintain their edge, these jobs, whether
producing iPads or socks, will not go back to America or Europe. Yet some jobs are returning
to developed countries. With Chinese wage costs rising, America’s productivity
improvements can help tip the balance, especially when American firms invest in more
automation. Yet robots can be used anywhere to reduce labor costs.

But labor costs are growing less and less important. Offshore production is increasingly
moving back to rich countries not because Chinese wages are rising, but because companies
now want to be closer to their customers so that they can respond more quickly to changes in
demand. And some products are so sophisticated that it helps to have the people who design
them and the people who make them in the same place.

The Boomerang Effect:

Currently, there are two tendencies taking place that may cause the shift of production back
to rich countries. Firstly, manufacturing workers in China along with workers in other sectors
are demanding higher pay, less working hours and more benefits causing the human resource
expenses to spiral.

Secondly, a series of technological breakthroughs such as the advent of 3D printing are

diminishing the extent of physical involvement of people in manufacturing processes.
Specifically, set to revolution is the area of manufacturing; 3D printing technologies enable
the construction of items of any shape and their manufacturing in any quantity with minimum
human intervention.

Combined together, these two tendencies possess considerable threat to the role of China as
the largest manufacturer in the world. To put it simply, with more extensive integration of
innovative technologies such as 3D printing in manufacturing processes it can become more
cost effective to set up operations locally in the US or Europe rather than outsourcing to
China.
Moreover, by observing the nature and extent of technological developments during the last
several decades it can be argued that there are many technological breakthrough yet to come
to further diminish the role of people in production processes with negative implications on
China’s competitive advantage.

At the same time, it is important to note that there is no guarantee that enhancing level of
integration of technology into manufacturing processes is going to shift the production back
to rich countries for sure.

There is a convincing argument that given its increasing amount of financial resources in
private and public sectors, China can succeed in catching up or even surprises the US and
European countries within specific period of time in terms of achieving cost effectiveness in
manufacturing through greater integration of technology.

Resource cost advantages, especially in relation to human resources have enabled China to
become the largest manufacturer in the world. At the same time, rapid technological
developments are impacting production processes in a way that the extent of physical
involvement of employees is being diminished. On top of that increasing level of foreign
direct investment into the country are rising the local wages in China in manufacturing sector,
as well as, all other sectors.

Today there is a significant threat to Chinese economy to experience downturn due to the
production shift back to highly developed countries in general and the US in particular. In
order to address this challenge in a successful manner more intensive collaboration needs to
be achieved between the Chinese government and the private sector so that the country’s
competitive advantage can move beyond cheap human resources to include effective and
highly innovative technological infrastructure.

As developing countries become richer and more sophisticated, they too want to make things
like aircraft, jet engines and high-performance sports cars. In some cases Western firms
subcontract part of the production work to firms in countries trying to build up the
capabilities of their industries, usually when those countries are placing big orders. But some
things are not for sharing because they are too important to preserve a product's competitive
advantage.

Manufacturing and innovation:

Only the best manufacturers successfully compete with the large multinational corporations.
This means that you need to be among the very best entrepreneurs not only to succeed but to
survive on today’s market which is marked by the cut-throat competition. There are several
important differences between successful business owners who continue to grow and those
that stagnate instead of expanding their business. And one of the main differences between
both types of entrepreneurs is innovation.

The importance of innovation in manufacturing cannot be emphasized enough. It does not

only refer to production of innovative products that are different from those offered by the
competition but it also refers to innovative and creative approach to production processes and
advertisement. In fact, innovation plays the key role in all levels of manufacturing and even
the economy itself. Globalization and tough competition force both small business owners
and multinational corporations to continue to “reinvent“themselves as well as their products
in order to retain or gain a share on the market because the customers do not easily give up
their favorite products and try something new unless they think that the new product may
offer them more value for their money. The key to success is therefore to make your product
stand out on the market which can be achieved only through innovative and creative approach
to manufacturing.

Innovation is not just about offering the customers new and quality products for the same or
even lower price but to offer something different without increasing the expenses for
production processes. For that reason innovation plays an important role in both production
processes and management. All successful companies stimulate creativity and innovation in
all their employees from product developers to workers at assembly lines because they are
well aware of the potentials of every human. There are several ways to create an innovative
and creative working environment but the most important of all is to motivate the employees
to share their ideas with the company leadership.

Additive Manufacturing:

Additive Manufacturing refers to a process by which digital 3D design data is used to build
up a component in layers by depositing material. The term "3D printing" is increasingly used
as a synonym for Additive Manufacturing. However, the latter is more accurate in that it
describes a professional production technique which is clearly distinguished from
conventional methods of material removal. Instead of milling a work piece from solid block,
for example, Additive Manufacturing builds up components layer by layer using materials
which are available in fine powder form. A range of different metals, plastics and composite
materials may be used.

The strengths of Additive Manufacturing lie in those areas where conventional manufacturing
reaches its limitations. The technology is of interest where a new approach to design and
manufacturing is required so as to come up with solutions. It enables a design-driven
manufacturing process - where design determines production and not the other way around.
What is more, Additive Manufacturing allows for highly complex structures which can still
be extremely light and stable. It provides a high degree of design freedom, the optimization
and integration of functional features, the manufacture of small batch sizes at reasonable unit
costs and a high degree of product customization even in serial production.

Collaborative manufacturing

Collaborative Manufacturing is a strategy by which supply chains can effectively compete. It

is a way for a company to become more efficient and agile both internally and in the way it
works with its suppliers, partners, and customers. It is a way to improve the performance of
existing company metrics and to enable measurement of new ones that cover the
effectiveness of many functional entities together. Implemented with the appropriate
manufacturing enterprise solutions, Collaborative Manufacturing improves decision-making
processes and increases the speed by which adjustments and appropriate corrective actions
are made. These processes tie together demand, design, sourcing, production, and service in
ways that reflect their inter-relationships and financial impacts.
We are in the early stages of a convergence of Internet communication technology with a
new form of energy that is by nature distributed and has to be managed collaboratively and
scales laterally. We’re making a great transition to distributed renewable energy sources. And
we distinguish those from the elite energies—coal, oil, gas, tar sands—that are only found in
a few places and require significant military and geopolitical investments and massive
finance capital, and that have to scale top down because they are so expensive. Those
energies are clearly sun setting as we enter the long endgame of the Second Industrial
Revolution.

Distributed energies, by contrast, are found in some frequency or proportion in every inch of
the world: the sun, the wind, the geothermal heat under the ground, biomass—garbage,
agricultural and forest waste—small hydro, ocean tides and waves.

As online services and software spread more widely, they will also allow customers to take
part in the production process. For instance, Assault Systems, a French software firm, has
created an online virtual environment in which employees, suppliers and consumers can work
together to turn new ideas into reality.

Just as digitization has freed some people from working in an office, the same will happen in
manufacturing. Product design and simulation can now be done on a personal computer and
accessed via the cloud with devices such as smart phones, says Mr Rochelle of Autodesk, the
Silicon Valley software company. It means designers and engineers can work on a product
and share ideas with others from anywhere. What does this do for manufacturing? The way
Mr Rochelle sees it, “it means the factory of the future could be me, sitting in my home
office.”

Making the future

Many of the new production methods in this next revolution will require fewer people
working on the factory floor. Thanks to smarter and more dexterous robots, some lights-out
manufacturing is now possible.FANUC, a big Japanese producer of industrial robots, has
automated some of its production lines to the point where they can run unsupervised for
several weeks. Many other factories use processes such as laser cutting and injection molding
that operate without any human intervention. And additive manufacturing machines can be
left alone to print day and night.

Yet manufacturing will still need people, if not so many in the factory itself. All these
automated machines require someone to service them and tell them what to do. Some
machine operators will become machine minders, which often calls for a broader range of
skills. And certain tasks, such as assembling components, remain too fiddly for robots to do
well, which is why assembly is often subcontracted to low-wage countries. The next
generation of robots will be different. Not only will they be cheaper and easier to set up, they
will work with people rather than replacing them. They will fetch and carry parts, hold things,
pick up tools, sort items, clean up and make themselves useful in myriad other ways.
That would make things easier for start-ups, but scaling up is notoriously difficult because the
capital costs of equipping a factory are often too high for investors to stomach, or the
payback period is too long. In some businesses advanced production technologies could bring
down those costs, reckons Martin Schmidt, an electrical-engineering expert at MIT. Mr
Schmidt has started a number of companies that make tiny devices such as miniature sensors.
He thinks that the production equipment for such devices might be shrunk too, even to
tabletop size, cutting capital costs. “In industries where that happens”, says Mr Schmidt, “I
think we will see some disruption.”

New Era

Manufacturing revolutions never happen overnight, but this one is already well under way.
There is enough transformative research going on in the biological sciences and in
nanotechnology to spawn entirely new industries, like making batteries from viruses. And if
the use of carbon-fiber composites were to spread from sports cars to more workaday models,
the huge steel-stamping presses and robot welding lines would vanish from car factories.

Additive manufacturing, like anything else digital, is already becoming both cheaper and
more effective. The big breakthrough would be in workflow. At present 3D printers make
things one at a time or in small batches. But if they could work in a continuous process—like
the pill-making machine in the Novartis-MIT laboratory—they could be used on a moving
production line. The aim would be to build things faster and more flexibly rather than to
achieve economies of scale. Such a line could be used to build products that are too big to fit
into existing 3D printers and, because the machine is digitally controlled, a different item
could be built on each platform, making mass customization possible. That would allow the
technology to take off.

Like all revolutions, this one will be disruptive. Digital technology has already rocked the
media and retailing industries, just as cotton mills crushed hand looms and the Model T put
farriers out of work. Many people will look at the factories of the future and shudder. They
will not be full of grimy machines manned by men in oily overalls. Many will be squeaky
clean—and almost deserted. The manufacturing jobs of the future will require more skills.
Many dull, repetitive tasks will become obsolete: you no longer need riveters when a product
has no rivets.

Consumers will also have little difficulty adapting to the new age of better products, swiftly
delivered. Governments, however, may find it harder. Their instinct is to protect industries
and companies that already exist, not the upstarts that would destroy them. They shower old
factories with subsidies and bully bosses who want to move production abroad. They spend
billions backing the new technologies which they, in their wisdom, think will prevail. And
they cling to a romantic belief that manufacturing is superior to services, let alone finance.
Effects of Technological changes on global business environment:

Technological changes affect almost every part of our lives. Thanks to the advances in
communication and computer science, nearly anything you can imagine is only a few clicks
away. Making a video call to your parents living overseas, for instance, or watching a movie
with a mobile device even when you are travelling is possible with the technology that we
have today.

Besides these changes in our personal lives, technology has also changed the face and the
pace of how we do business. Business processes have been modified and organizations are
now working much more efficiently than ever. At the same time, technology has opened a
new way of communication, allowing businesses to communicate and collaborate beyond
borders.

It is for sure that the technology has changed organizations in an astonishing way. Mobile
devices like smart phones and tablets combining with the power of internet have
revolutionized the way we work. E-mail communication has replaced nearly all written
memos, phone calls, and faxes. Smartphone’s and tablets can connect you to your business
network while you are out of the office, allowing you to respond quickly. Storing the
important files on a cloud computing system rather than your PCs, for instance, has made
information easily accessible at anytime and anywhere.

Finally we can say that technology is changing so rapidly for organizations and the ability to
adopt new technologies is becoming a vital mechanism. This is certainly true in the world of
global business. The coming years will definitely show up new technologies that will surely
continue to change the way we do business even one step further.

Effects of technological changes on Bangladesh business environment:

Before 1948 Bangladesh had certain technologies/industries like Muslin, Silk, Jute, and Tea
etc. During 1948-72 some industries were established to start an industry based country, but
did not make any measurable impact compared to the other nations. Since 1972 private
initiatives have paved the way to some of our current industry-base, mainly in: agriculture,
fishery/poultry, garments, pharmaceuticals, construction etc. In most cases these industries
have acquired knowledge and implemented the technologies that are available elsewhere to
meet the internal demand and export in some cases.

Development will come not from anything new, but from the application of what is already
known to local circumstances. Which means that our economic and development policy isn’t
to try to push forward the boundaries of human knowledge but rather to just give those
practical people the room to apply what is already known to our problems.