On Exponential Growth

When Technology Goes Viral, a post to this blog from May 2015, is reprised below. That post describes technologies that grow at such rates that they disrupt, or at least redefine, entire industries – or create new industries. When Technology Goes Viral, however, didn’t mention the element of surprise that so frequently accompanies viral growth. Take LEDs for example, which are currently disrupting the lighting industry. Or Facebook and other on-line media which just this month redefined American elections process. Take a fresh look at When Technology Goes Viral, this time with the element of surprise in mind.


 When Technology Goes Viralfrom 23 May 2015

Going Viral

Most of us have heard of a Facebook post or a YouTube video that “went viral” on the internet. Like a virus multiplying, one person sees the Facebook post or watches the video, then sends it on to several friends, who see the post or video, then … exponential growth. [1] Contrast that with the incremental way we normally expect growth to occur.exponential Growth Graph

This graph shows just how dramatic exponential growth can be. >>>

It’s not just videos. It is not uncommon for entire technologies to grow in an exponential manner for years or even decades. Here are some examples:

20th Century Examples

>> Electrification: In the United States, the first public electric generation and distribution facility began operating in New York City in 1882. By 1950, electrification was essentially complete across this country, serving a population of about 150 million people. Electric lighting was the original application, followed by a multitude of manufacturing opportunities like toasters and vacuum cleaners. Factories switched from prime movers and leather belts to electric motors.

>> Automobiles: Only a few hundred true automobiles existed in the entire world at the beginning of the 20th century. A century later, about 226 million were registered in the U.S. alone. [2] Ubiquitous personal rapid transportation redefined lifestyles and spawned more business models and value chains than I can count.

>> Cell Phones: The first cellular telephone was invented in 1973. Less than four decades later, in 2012, the number of cell phones in the U.S. alone was about 310 million, [3] a figure which approximated the total U.S. population.

>> Moore’s Law: In 1965, Gordon Moore, one of the founders of Intel, observed that the number of transistors on an integrated circuit every year. Ten years later, he raised that to doubling every two years. That amounts to 50 years of exponential growth – 50 years of relentlessly increasing computing power and 50 years of plummeting cost. Good-by IBM 1620. Hello iPhone 6.

Current Prospects

Abundance: The Future Is Better Than You Think, a recent book that one reviewer called “a godsend for those who suffer from Armageddon fatigue”, [4] describes eight technologies that may be on exponential growth paths just now. I’ve chosen a few of those technologies as examples that appear to be especially relevant to manufacturers:

>> Biotechnology: The current issue of Fast Company magazine named their choices for the 100 most creative people in business. Fast Company chose Charles Arntzen as the #1 most creative. Arntzen is a professor at Arizona State University. Using DNA structuring technology, he “engineered” a variety of tobacco plant to produce the medicine that successfully fought the Ebola outbreak in Africa in 2014. [5] Bio-based technology promises new and innovative routes to new fuels, industrial feedstocks, and agricultural products, not to mention medicines. The Department of Chemical Engineering where I trained has been renamed The Department of Chemical and Biomolecular Engineering. Biotech and its potential is that important.

>> Networks and Sensors: The internet of things is really coming. In manufacturing, that means real time information on all equipment and all work in process. Then, connect across the entire value chain so that everybody (man and machine) has actionable information on the current status of everything. Defect rates vanish. Efficiency soars. Inventories shrink.

>> Digital Manufacturing: I have heard 3-D printing described as “neat, but not really useful”. Hmmm. 3-D printing allows products to be manufactured “hands off”, directly from AutoCAD drawings, with no materials waste. Today, cycle times are too long and equipment costs are too high for most routine production – although that is changing fast. For prototypes and complex special orders, not so; especially when exotic materials are involved.

SpaceX Dragon

This photo shows the Space-X Dragon manned space flight vehicle and two of its Super Draco rocket motors. The rocket motors are produced by 3-D printing. >>>

So What?

Exponential technologies offer untold opportunities to create new products, new efficiencies and new markets. At the same time, exponential technologies disrupt. Case in point: cell phones have exploded, while hardwired telephone services are wondering what happened to their market. These opportunities and threats of disruption apply all along your value chain. That’s one more reason why today’s manufacturers need to maintain a fully zoomed out assessment of the entire globalized context within which your business operates.

Chinese character - Crisis

 

<<< The Chinese character for “crisis” combines the characters for “opportunity” and for “danger”.

 

Chuck at the PacificThoughtful comments and experience reports are always appreciated.

…  Chuck Harrington (Chuck@JeraSustainableDevelopment.com)

This blog and associated website (www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome.

Image credits: Exponential growth graph – creative commons via Wikipedia, Dragon spacecraft photo – SpaceX (creative commons), Chinese character – creative commons via Wikipedia


 

[1] For more on exponential growth, see http://en.wikipedia.org/wiki/Exponential_growth

[2] Automotive stats from http://www.statista.com/statistics/183505/number-of-vehicles-in-the-united-states-since-1990/

[3] Cell phone stats from www.pewinternet.org/fact-sheets/mobile-technology-fact-sheet/

[4] Diamandis, Peter and Steven Kotler, Abundance: The Future Is Better Than You Think, Simon & Schuster (2012), especially Part 2, page 49f

[5] “The 100 Most Creative People in Business in 2015: #1 – Charles Arntzen, For Fighting Ebola With Tobacco”, Fast Company, June 2015 issue, page 47f

The People Puzzle

A Master Plan

“… so that we can imagine far into the future and life is still good. That’s what ‘sustainable’ means. It’s not some silly hippy thing – it matters for everyone.”

That’s how Elon Musk defines “sustainable” in Tesla’s recently released Master Plan, Part Deux. [1] The Master Plan goes on to outline Tesla’s approach to making a sustainable (solar) energy economy a reality. A solar powered economy is a key component of a future where “life is still good” – for everyone. But it is only one component. This post looks at another component – the future of employment, meaning how people might produce their livelihoods as the future unfolds over the coming decades.

Pieces of a Puzzle

Robot businessman imageUntil the middle of the 19th century, the great majority of Americans worked in agriculture. Then, the advent of railroads and the American Civil War marked a profound change — from a nation of farmers to a nation of industrial workers. A couple of decades more than a century later, the smoke stacks stopped belching and America began morphing, then rushing, toward a post – industrial economy, whatever “post – industrial economy” means for the American workforce.

Frankly, “post – industrial economy” isn’t very well defined, especially from the perspective of the millions of diverse individuals that constitute the American workforce – all of whom want a “future where life is still good”. While that future is far from clear, there are some pieces that, like a jigsaw puzzle, can be examined and fit together.

Here are a few of those pieces:

>> The Age of Oversupply: Daniel Alpert’s 2013 book, The Age of Oversupply, posits that the economic emergence of formerly iron curtain countries and of export oriented Asian countries has resulted in a global glut (billions!) of under-educated workers and of capital looking for higher returns.

>> Demographics: There are dramatic changes evident in the demographics of economically developed countries, including the U.S. Birth rates are declining and populations are aging. In Japan and a few western European countries, populations are actually shrinking. Changes of this magnitude have significant social, economic and political repercussions.

>> Jobs and Education: A recent Bloomberg article entitled Educated Americans have taken almost every job created in the recovery [2] maintains that the U.S. economy has added (or recovered) about 11.6 million jobs since 2010. Of these, about 99% of those jobs were filled by people with at least some college education. Only 80,000 – less than 1% — were filled by people with a high school diploma or less. (Note: The population of the U.S. increased by about 12.3 million between 2010 and 2015).

>> Coal Miners and Re-education: There has been much talk about the demise of coal as a fuel. Of course, that means displacement for those who make their living in the coal mining industry. Re-education comes up frequently. Exactly what these people might be retrained to do does not come up so often.

>> Poorer Kids: A recent McKinsey & Company article informs us that:

“Most people growing up in advanced economies since World War II have been able to assume they will be better off than their parents. For much of the time, that assumption proved correct: except for a brief hiatus in the 1970s, buoyant global economic and employment growth over the past 70 years saw all households experience rising incomes, both before and after taxes and transfers. As recently as between 1993 and 2005, all but 2% of households in 25 advanced economies saw real incomes rise.”

“Yet this overwhelmingly positive income trend has ended. A new McKinsey Global Institute report, Poorer than their parents? Flat or falling incomes in advanced economies [3] finds that between 2005 and 2014, real incomes in those same advanced economies were flat or fell for 65 to 70 percent of households, or more than 540 million people.”

>> Robotics and Automation: Tesla’s Master Plan, Part Deux, mentioned earlier, provides other insights on employment and the future. The Master Plan suggests that advanced manufacturing techniques could accelerate production rates between 5 and 10 times on a roughly 2 year iteration cycle. That means many more vehicles per employee. The Master Plan also mentions vehicles without drivers.

Closer to home, my local grocery and hardware stores are installing more self – checkout aisles. The bank that I use now has ATMs inside as well as outside. Retail stores (and their employees) are being thumped by on-line shopping. The beat goes on.

Robotics and automation, fueled by advances in artificial intelligence, are proliferating rapidly. Good for product costs and (presumably) prices. Not so good for people needing jobs.


What Next?

This essay is about finding (or creating) a future where “life is still good” for everyone, in a post – industrial economy. What that entails is, indeed, a puzzle. The few pieces of that puzzle mentioned here seem to fall into three areas: demographic changes, advances in technology and education. The next post to this blog, The People Puzzle – Part 2, will begin to fit together the pieces of this puzzle and attempt to draw some insights as to what that future where “life is still good” might consist of. Stay tuned.

Chuck - VancouverThoughtful comments and experience reports are always appreciated.

…  Chuck Harrington

(Chuck@JeraSustainableDevelopment.com)

This blog and associated website (www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome.

Image credit: robot / puzzle graphic via www.dreamstime.com


[1] https://www.tesla.com/blog/master-plan-part-deux

[2] www.bloomberg.com/news/articles/2016-06-30/americans-with-more-education-have-taken-almost-every-job-created-in-the-recovery

[3] www.mckinsey.com/global-themes/employment-and-growth/poorer-than-their-parents-a-new-perspective-on-inome-inequality

When Technology Goes Viral

Going Viral

Most of us have heard of a Facebook post or a YouTube video that “went viral” on the internet. Like a virus multiplying, one person sees the Facebook post or watches the video, then sends it on to several friends, who see the post or video, then …exponential Growth Graph exponential growth. [1] Contrast that with the incremental way we normally expect growth to occur.

This graph shows just how dramatic exponential growth can be. >>>

It’s not just videos. It is not uncommon for entire technologies to grow in an exponential manner for years or even decades. Here are some examples:

20th Century Examples

>> Electrification: In the United States, the first public electric generation and distribution facility began operating in New York City in 1882. By 1950, electrification was essentially complete across this country, serving a population of about 150 million people. Electric lighting was the original application, followed by a multitude of manufacturing opportunities like toasters and vacuum cleaners. Factories switched from prime movers and leather belts to electric motors.

>> Automobiles: Only a few hundred true automobiles existed in the entire world at the beginning of the 20th century. A century later, about 226 million were registered in the U.S. alone. [2] Ubiquitous personal rapid transportation redefined lifestyles and spawned more business models and value chains than I can count.

>> Cell Phones: The first cellular telephone was invented in 1973. Less than four decades later, in 2012, the number of cell phones in the U.S. alone was about 310 million, [3] a figure which approximated the total U.S. population.

>> Moore’s Law: In 1965, Gordon Moore, one of the founders of Intel, observed that the number of transistors on an integrated circuit every year. Ten years later, he raised that to doubling every two years. That amounts to 50 years of exponential growth – 50 years of relentlessly increasing computing power and 50 years of plummeting cost. Good-by IBM 1620. Hello iPhone 6.

Current Prospects

Abundance: The Future Is Better Than You Think, a recent book that one reviewer called “a godsend for those who suffer from Armageddon fatigue”, [4] describes eight technologies that may be on exponential growth paths just now. I’ve chosen a few of those technologies as examples that appear to be especially relevant to manufacturers:

>> Biotechnology: The current issue of Fast Company magazine named their choices for the 100 most creative people in business. Fast Company chose Charles Arntzen as the #1 most creative. Arntzen is a professor at Arizona State University. Using DNA structuring technology, he “engineered” a variety of tobacco plant to produce the medicine that successfully fought the Ebola outbreak in Africa in 2014. [5] Bio-based technology promises new and innovative routes to new fuels, industrial feedstocks, and agricultural products, not to mention medicines. The Department of Chemical Engineering where I trained has been renamed The Department of Chemical and Biomolecular Engineering. Biotech and its potential is that important.

>> Networks and Sensors: The internet of things is really coming. In manufacturing, that means real time information on all equipment and all work in process. Then, connect across the entire value chain so that everybody (man and machine) has actionable information on the current status of everything. Defect rates vanish. Efficiency soars. Inventories shrink.

>> Digital Manufacturing: I have heard 3-D printing described as “neat, but not really useful”. Hmmm. 3-D printing allows products to be manufactured “hands off”, directly from AutoCAD drawings, with no materials waste. Today, cycle times are too long and equipment costs are too high for most routine production – although that is changing fast. For prototypes and complex special orders, not so; especially when exotic materials are involved.SpaceX Dragon

This photo shows the Space-X Dragon manned space flight vehicle and two of its Super Draco rocket motors. The rocket motors are produced by 3-D printing. >>>

So What?

Exponential technologies offer untold opportunities to create new products, new efficiencies and new markets. At the same time, exponential technologies disrupt. Case in point: cell phones have exploded, while hardwired telephone services are wondering what happened to their market. These opportunities and threats of disruption apply all along your value chain. That’s one more reason why today’s manufacturers need to maintain a fully zoomed out assessment of the entire globalized context within which your business operates.Chinese character - Crisis

<<< The Chinese character for “crisis” combines the characters for “opportunity” and for “danger”.

 

Thoughtful comments and experience reports are always appreciated.

…  Chuck Harrington (Chuck@JeraSustainableDevelopment.com)

P.S: Contact me when your organization is serious about prospering in the globalized 21st century … CH

This blog and associated website (www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. New blog posts are published weekly.

Image credits: Exponential growth graph, creative commons via Wikipedia;  Dragon spacecraft photo – SpaceX (via Flickr), Chinese character – creative commons via Wikipedia


[1] For more on exponential growth, see http://en.wikipedia.org/wiki/Exponential_growth

[2] Automotive stats from http://www.statista.com/statistics/183505/number-of-vehicles-in-the-united-states-since-1990/

[3] Cell phone stats from www.pewinternet.org/fact-sheets/mobile-technology-fact-sheet/

[4] Diamandis, Peter and Steven Kotler, Abundance: The Future Is Better Than You Think, Simon & Schuster (2012), especially Part 2, page 49f

[5] “The 100 Most Creative People in Business in 2015: #1 – Charles Arntzen, For Fighting Ebola With Tobacco”, Fast Company, June 2015 issue, page 47f

The Importance of Expanding Bandwidth

The Business of “Bandwidth”

“Bandwidth” is a communications term that refers to the rate at which information can be conveyed through a given channel. It’s roughly analogous to a pipe – the larger the diameter of the pipe, the more fluid it can carry. [1] Business borrows the term “bandwidth” to refer to flows of information into, within and out of the firm.

The internet sparked a change from a condition where access to timely information was limited to a condition where enormous quantities of information threaten to overwhelm us. The challenge for managers is more than how to gather more information. Rather, the challenge is how to order that information in such a way that it can be assimilated and made useful. This poses two situations: (1) choosing which content streams to admit into awareness, and (2) providing sufficient context for each content stream to make it truly understandable, hence actionable.

To make the term “context” clear, consider, for example, a Metropolitan Opera performance, presented as an AM radio broadcast, a stereo FM broadcast, and a high definition, enhanced sound quality color television broadcast. In each case the content may be the same. The increased aural and visual context, however, results in a much richer, more meaningful signal.

“Bandwidth” and Management

When the term “bandwidth” is applied to management, it raises several concerns:

>> How to assure access to all relevant information streams that might affect the business in today’s globalized economy?

Four Change DriversPragmatically speaking, a business needs to establish many “listening posts” that follow information sources, extract relevant bits and forward it to management in an organized fashion. The scope of “listening” is indeed daunting. The list extends from familiars like customer information, market information and information on new regulations to include the entire scope of 21st century business – a scope that this blog rather arbitrarily classifies as Globalization, Sustainability, Technology and Demographics & Trends.

>> How to decide which signals (information streams) should be admitted to management’s attention?

Establishing “listening posts” and defining the scope of each is management’s responsibility.

>> How to decide how much context is necessary for each signal?

One approach is to “headline” information items, then link to related information, so that management can expand the context of each “headline” as the manager deems appropriate. Exception reporting offers another, usually complimentary approach.

“Bandwidth” in Manufacturing

Applying “bandwidth” specifically to the factory, “bandwidth” can be thought of as the capability of a manufacturing facility to produce. Capability to produce involves the availability of productive resources, including equipment, technology, talent and money. Those resources can be deployed only to the extent that they are available at any given time. The effective available “bandwidth” can be improved through prudent management practices. For example, the productive capability of equipment can be improved through appropriate maintenance. Talent can be fostered through training and mentoring. Time and money can be extended through reduction of wastes.

Absent sufficient “bandwidth”, a manufacturing organization cannot adapt to abnormal circumstances, nor can it readily accommodate change. A lack of sufficient “bandwidth” helps explain why many improvement initiatives don’t succeed. “Bandwidth” also helps explain the usefulness of focusing on a small number of manufacturing activities. [2] It is almost always necessary to increase “bandwidth” in order to move to the left on the Performance Curve. [3] On the other hand, excessive management emphasis on cutting cuts often has the unintended effect of impairing “bandwidth”, hence the organization’s intrinsic ability to compete.

Chuck - California Coast 2Thoughtful comments and experience reports are always appreciated.

…  Chuck Harrington (Chuck@JeraSustainableDevelopment.com)

P.S: Contact me when your organization is serious about pursuing Sustainability … CH

This blog and associated website (www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. New blog posts are published weekly.


[1] See: http://www.businessdictionary.com/definition/bandwidth.html#ixzz3RGjdlg5i

[2] See the Harvard Business Review’s classic article: Skinner, Wickham, “The Focused Factory”, HBR May–June 1974

[3] For more on the Performance Curve, see Operational Excellence – The Performance Curve, this blog: http://jerasustainabledevelopment.com/2012/05/24/operational-excellence-the-performance-curve/

Jera, Pragmatism and Sustainability

Manufacturing in the 21st Century

Everyone watched, astonished, as the global price of petroleum plunged by more than half since May 2014. The global price of petroleum and its derivatives – especially fuels and process feedstocks – affects just about all manufacturers, some to a significant degree. The question before manufacturers right now is how to respond. Are today’s lower prices the new normal? Or will petroleum prices rebound toward last summer’s level? Is this a strategic matter? Or a welcome windfall (or transient disaster, depending on your business)?

This change in petroleum prices is neither the first nor the last seismic – scale change to affect manufacturers, especially since the millennium. Since then, tens of thousands of American factories have closed and millions of manufacturing jobs have disappeared as consequences of those changes and manufacturers’ reactions to those changes.

Four Change DriversThe causes for changes like the global petroleum price meltdown can be found in major disruptions in an expanded global business environment. “Global business environment” means the context within which manufacturers must operate. As context expands, so must the scope of management attention. The expansions in the context within which manufacturers must operate can be loosely categorized as Globalization, Sustainability, Technology and Demographics & Trends.

In short, managers need a significantly more zoomed out [1] scope of awareness in order to anticipate and adapt to a continuing barrage of changes.

Jera and Pragmatism

Jera Sustainable Development exists as management’s resource for determining and understanding those factors within the 21st century business context that are most likely to cause significant changes for smaller manufacturers. Zoomed out understanding of context allows managers to anticipate and to effectively adapt to change as it develops.

As management’s resource, Jera maintains an attitude of pragmatism, meaning a focus on desired outcomes – especially that of survival and prosperity within the realities of the 21st century. 3P Diagram with captionMany important 21st century issues are, unfortunately, emotionally charged, or, worse yet, substantially politicized. Pragmatism means respecting sincerely held positions while emphasizing actions most consistent with desired outcomes. Jera’s view of the Triple Bottom Line [2] provides a framework for structuring objectives – desired outcomes – that accommodate the zoomed in present and zoom out into the future.

What Jera Does

Weekly Essays: This blog now consists of over 180 essays on topics related to Globalization, Sustainability, Technology and Demographics & Trends, all from the perspective of smaller manufacturers. New essays will continue to be posted weekly, as they have since 2011.

Commentaries: Commentaries are longer, more in depth discussions on timely topics. The first of these will look at the rapidly changing petroleum industry as it affects smaller manufacturers. Look for it sometime in February. An editorial schedule for later commentaries is still under consideration.

A Book: There is a book on 21st century manufacturing currently in the works. More on this as work progresses.

Individual Firms: Jera is available to assist individual firms with specific concerns in their pursuit of sustainability in the 21st century.

S/W Ver: 97.04.30RThoughtful comments and suggestions are always appreciated.

 

…  Chuck Harrington

(Chuck@JeraSustainableDevelopment.com)


 

[1] Zooming Out means smoothly transitioning from a tight focus on a specific to a wide angle perspective, like a zoom lens on a camera. For more on zooming, see Zooming Again!, this blog,   http://jerasustainabledevelopment.com/2014/08/07/zooming-again/

[2] For more on Jera’s view of the Triple Bottom Line, see Double Take on the Triple Bottom Line, this blog, http://jerasustainabledevelopment.com/2012/10/04/double-take-on-the-triple-bottom-line/