

Britain poised for third phase of industrial revolution - J3L2404
http://www.bsr-russia.com/en/economy/item/1097-britain-poised-for-third-phase-of-industrial-revolution.html

======
iuguy
I don't know what this article is really trying to say, if it's saying that a
zero cost labour force will drive a third industrial revolution, then I'd
disagree. The economy here in the UK is on the brink of collapse, as is our
government. While the coalition looks solid on the outside the two parties
involved are both undergoing an internal identity crisis, with some members of
the lib dems leaning to the right and some tories leaning towards the centre.
It's not really a radical government in any other concept than it's doing what
is the only option left - to stop spending money.

I don't see this revolution in the UK. There's a fair old bit of unemployment,
nobody wants to spend money and interest rates are so low that any savings are
being pretty much destroyed. Add rising prices for common things like food and
petrol and you're not really creating the conditions for an industrial
revolution.

~~~
fauigerzigerk
What the article is trying to say is that Britain is once again leading the
world thanks to the far sighted, determined and wise leadership of the
Conservative Party.

It's a little comical considering that Germany, Switzerland and many others
are much further along the way towards a knowledge driven re-emergence of
manufacturing that doesn't depend on cheap labour.

Britain is a glorified hedge fund with no manufacturing to speak of.

~~~
iuguy
I'd say that the concept of our economy as a glorified hedge fund is going a
bit too far. Ireland is a glorified hedge fund due to it's tax policies and
financial investments. Britain is able to trade on it's asset base which is
actually pretty large compared to the likes of Ireland. The manufacturing of
which you speak has gone downhill, but given the country's history as the
manufacturing powerhouse of the world initially, followed by the dissolution,
renaissance and redissolution of it's base I don't see that as a huge problem.
The British economy these days is largely a value-add services-driven economy.
We don't manufacture because it's cheaper to get other countries to
manufacture then develop services on top and make money through arbitrage on
the difference. I'm not suggesting this is sustainable but it's the only thing
we can do for now to remain competitive.

~~~
fauigerzigerk
Of course "glorified hedge fund" is an exaggeration and the UK does have
pockets of innovation in industries like biotech. Services is 75% of GDP, 10%
of GDP is financial services in the narrowest sense. That's compared to 7.5%
in the US and 3.8% in Germany. How much of that huge services sector is linked
to financial services? My own observation is that about half of all IT jobs in
the UK are related to finance. I think it's fair to say that the value Britain
adds to the world economy is dominated by investment banking.

There are historical reasons for that, but the extremely lax approach to
regulation plays a huge role as well. The UK is where hedge funds and
investment banks from all over the world go to do the most daring kinds of
gambles. AIG was the biggest insurer in the world. Their small London office
bankrupted the entire company. Why was that office in London instead of New
York?

But my point is that any claim that the UK is leading the world in terms of a
new type of knowledge driven, highly automated manufacturing model is
completely delusional. It just doesn't exist outside of a few speeches David
Cameron gave during the election campaign. Britain is not even on the map when
it comes to technology.

I don't know if this is a big problem. Maybe the world can sustain a few
bloated financial centres and will do so for a long time to come. But if it
turns out that finance as a share of world GDP has peaked, then the UK is in a
very dire situation, arguably the worst outside if Iceland.

------
iwr
The idea is that robotic manufacturing would be the next stage of the
industrial revolution. Meaning that lost manufacturing jobs are not
necessarily a bad thing, but rather a natural procession to more advanced
division of labor. Indeed, the focus on "keeping jobs" at all costs may be
harming development.

But we could also say robots are a means to evade the uncompetitive nature of
the labor market. By adding restrictions, politicians are forcing businesses
to shift their manufacturing to automatic processes rather than human
laborers. So we have lower skilled people prevented from working (and
sometimes from ever gaining employment), expensive high-skilled technicians
and engineers and expensive technology. The free market will route against
barriers, often with unintended consequences. For now at least, Chinese
laborers are a better alternative to autonomous robots.

------
exit
> _Such has been the success of computer technology that whole swathes of
> industry (such as book printing, but there are many others) no longer need
> any workers at all. Everything is computer-controlled, computer-driven.
> Suddenly there are NO labour costs, so the former advantages of the Third
> World are being rapidly wiped out once again._

i don't follow how the article goes from this to looking forward to everyone
being involved in a 3rd industrial revolution. the conclusion i would draw is
that there is an unprecedented unemployment crisis looming.

~~~
kiba
_i don't follow how the article goes from this to looking forward to everyone
being involved in a 3rd industrial revolution. the conclusion i would draw is
that there is an unprecedented unemployment crisis looming._

Yes, it does seem that there will be unprecedented unemployment crisis.
However, who will buy all the goods that the robot produce?

Moreover, it does seem time and time again that people manages to find work.
Some people say there's alway works to do.

Thus, it is imperative that entrepreneurs find new uses for the unemployed
masses, educators to reacess how they teach, and so on, to ease the growing
pain. Let face it, we don't want to get another Luddite rebellion.

~~~
exit
> _However, who will buy all the goods that the robot produce?_

absolutely, that's part of the problem.

> _Moreover, it does seem time and time again that people manages to find
> work. Some people say there's alway works to do._

the vast majority of unemployed people will not "find work". they will be
"given work" by other people who are in a position to take advantage of them.

if the benefits of automation aren't socialized you can count on increasingly
sadistic ways of "putting people to use".

~~~
kiba
>the vast majority of unemployed people will not "find work". they will be
"given work" by other people who are in a position to take advantage of them.

That's of course, when only industrialization is the _only factor_. When you
factor in all the other technological factors and social trends, the picture
will begins to look different, if not radically so.

~~~
venkat01
Please to elaborate on these "other technological factors and social trends."
If there's too much panic on one side by those who are losing their jobs,
there seems to be a great deal of hand waving and talk about "other factors"
by those who are less affected by these "trends".

~~~
kiba
The Flynn effect trend seem to indicate that the population is getting smarter
over time. However, it would probably only slow down the loss of jobs. Unless,
IQ increase dramatically.

Than there's the emerging invisible economy in which everything is determined
by supply & demand, but also contracts that are per se, not "enforceable", and
where reputation matters. That where people can find jobs in spite of the
structural deficiency in the wider economy that forbid the price floor for
labor to drop to where it needs to be. They are happening _now_.

But there's the past record in which new jobs are created out of jobs being
eliminated by robots. There are demands for humans to program them, probably
repair them, and so on. It might happen again with this process of
industrialization.

There's another factor: prosthetic that effect a superhuman attribute or
merging of humans into machines. It seem to take forever right now, though.
This could be simply be our linear point of views, but not the actual
development rate.

But then again, whether or not we have jobs in the future is not determined by
what arguments I make, but of the facts.

~~~
konad
> Unless, IQ increase dramatically.

100 IQ is defined as the average in the population under study, therefore
increase / decrease is impossible.

~~~
kiba
>100 IQ is defined as the average in the population under study, therefore
increase / decrease is impossible.

By our standard, most people 100 years ago would be classified as retarded.
Thus, what I meant by increase in IQ is in relative to past populations.

An errors? Perhaps, but that's nitpicking.

~~~
konad
I would say that "smarter over time" is the wrong conclusion of the Flynn
effect.

------
gregpilling
I used to own one of these <http://www.panasonicfa.com/?id=TAWERS> and it did
not replace the worker. It did make him twice as productive with better
quality, but he still had to load and unload it. The machine cost $1600 per
month on a lease, so it wasn't 'free' either. It also took someone with
programming skills to get it going, which again was not free. So while I am a
big fan of automation, the thought that it is free and requires no workers is
a fantasy.

------
wazoox
I disagree. It very much looks like most or all western countries are about to
follow Japan's track of long decline.

An important missing part is also energy availability : See this for instance:
<http://netenergy.theoildrum.com/node/7069>

~~~
nodata
What was the winning strategy in Japan? Can you recommend something to read
about how the people who _are_ succeeding in Japan are doing it, and which
strategies they are following?

~~~
wazoox
Anyone who would know what would be a winning strategy for Japan right now
would be rich quick :) Japan after roaring 80s and a huge real estate boom,
crashed in 1990 and never recovered. The last numbers are really frightening,
see
[http://dl.dropbox.com/u/6010227/Webshare/China%20Japan%20Pre...](http://dl.dropbox.com/u/6010227/Webshare/China%20Japan%20Presentation%20v3%20-%20By%20Vitaliy%20Katsenelson.pdf)

------
chadp
The first 40% of the article started out OK actually.

Then it goes to pot and turns into some sort of political rant which some
point I don't understand.

Also, what BS about worker-less automated factories. Has he even seen high
tech factories? They will still need workers for many years to come. And
anyway, these factories are more likely to be in the BRIC and other low cost
countries still.

A flurry of these factories firstly are not coming to the UK and secondly (if
they did) are not likely to bring the UK back to relevancy.

------
pjscott
If Britain can drive costs down by automating factories, then I'm sure China
can, too. They have a lot of skilled people, they've proven their willingness
to invest big money on manufacturing, and unlike Britain, China actually has a
credible plan to deliver cheap electricity over the next two or three decades.
Oh, and they have cheap labor to fill in the gaps where you still need people,
which is another plus.

~~~
Nick_C
I get what you're saying about energy costs, but I'm not as convinced. We
(first-world) got a lot of cheap manufacturing inputs because we ignored (i.e.
passed on to next generations) some of the costs of energy, namely pollution
and water use in coal. One of the reasons we were able to do that in the 50s
and 60s is that we hadn't really convinced ourselves it would be as bad as the
environmentalists said, so we ignored it.

China won't be able to pass those externalities on to future generations as we
did. The reason is that we serve as an example of what happens when you do
ignore the full cost of energy generation, and there is already significant
local concern about pollution from unrestricted manufacturing and energy
generation.

I think China will not have the luxury that we had of several decades of
ignoring some hidden input costs. They will be forced to implement full
environmental impact controls which will drive up energy costs.

They do have some dam projects for hydropower generation left to bring online,
but I can't see any really major projects being implemented after that. Then
there's nuclear, about which I don't know.

------
junkbit
He would have made a better argument by using ARM as an example of developing
British IP and licensing it to others to manufacture.

