Insight

Book Review: The New Industrial Revolution

16 Nov , 2015  

Joseph Walker, content manager for Control Techniques, casts his eye over The New Industrial Revolution.

The New Industrial Revolution, written in 2012 by Peter Marsh – a former manufacturing editor at the Financial Times, is a fascinating look at the past and future of manufacturing.

The book begins in an unconventional fashion – with a poem by Rudyard Kipling, and some arresting statistics about iron and steel:

‘Gold is for the mistress – silver for the maid –

Copper for the craftsman, cunning at his trade.’

‘Good!’ Said the Baron, sitting in his hall,

 ‘But Iron – Cold Iron – is master of them all’

Marsh tells us that half of all the 43 billion tons of iron created throughout human history has been made since 1990. He also tells us that there is enough easily accessible iron to keep the world’s steel plants supplied for the next billion years at 2011 rates of output.

The initial focus is on iron and steel because Marsh views them as essential to manufacturers. And it is clear from the outset that he is optimistic about the future of the manufacturing sector. What is more unusual is that he is also optimistic about the future of manufacturing in the advanced economies, such as Britain and the USA.

The fifth industrial revolution

Marsh sketches a history of industry that identifies four previous industrial revolutions. The first was characterised by steam power, steel and textiles; the second by railroads and steam ships; the third by electricity and chemicals; and the fourth by computers.

He believes that a fifth industrial revolution is happening right now, and that is the subject of this book. According to Marsh, the fifth industrial revolution has several defining characteristics. These include using new technologies to produce personalised goods on a mass scale, the globalisation of the manufacturing supply chain, and an increasing tendency for firms to be set up to exploit very specific niches.

Marsh argues that the fifth industrial revolution will provide an opportunity to reinvigorate manufacturing in the developed west. His argument is refreshing because he makes his case through a lively tour of advanced manufacturing and export firms.

One example is in Poole, an English seaside town on the south coast, which is home to the world’s two largest producers of ‘air spindles’ – small specialised electric motors used by the electronics industry. Air spindles are particularly important in the manufacture of printed circuit boards and, in 2010, the two companies in Poole accounted for 80% of this $100 million industry.

Another example is in Paris, France, home to the world’s biggest maker of glass lenses which manufactures over 300 million lenses a year – more than a quarter of world demand.

Marsh also believes that a key part of the new industrial revolution is what he calls the ‘environmental imperative’, and he argues that ecological considerations will be of great concern for manufacturers of the future. Here he turns to Emerson – which manufactures electric drives and motors in Wales and France – saying “producers of electric motors such as Emerson are devising new forms of digital devices [drives] that use 20-30 per cent less energy than previous generations”.

The book is packed with such case studies, and together they provide convincing evidence that it is perfectly possible for manufacturers to not only survive and thrive in high cost locations, but also to export from them.

Production and the value chain

One issue with the book is that the way Marsh defines a western manufacturing business is not likely to chime with all his readers. Many readers, in particular politicians, will be interested specifically in production, and in whether the fifth industrial revolution will result in more ‘re-shoring’, i.e. the return of factories (and factory jobs) to western Europe and north America (or indeed to Australia or Japan). But Marsh attaches equal importance to the whole value chain within manufacturing firms. Many of his examples look at businesses which only conduct activities such as research and development in the west, while locating production in the east. Such firms are of interest, but they are a more familiar story.

One example that will resonate with UK readers will be Dyson, a UK domestic appliance firm based in the English county of Wiltshire. In 2002, all production was controversially shifted from Wiltshire to Malaysia resulting in 590 job losses in the town of Malmesbury. Since then, Dyson has consistently expanded but, by 2011, the company had created only 400 new jobs in Malmesbury to replace the 590 it had shed nine years earlier. Marsh pitches Dyson as a staggering UK success story. And so it is. But it will not be a tale that inspires all of his readers.

The growth machine

It is well documented that the manufacturing sector is unusually productive relative to other sectors – Marsh calls it ‘the growth machine’ and sees it as essential to the world economy, saying “put simply, one person in a manufacturing job has delivered more economic benefits than people in other sectors”. He refers to workers in manufacturing firms as “economic shock troops”. But he also acknowledges that employment in manufacturing has declined radically in the last 50 years, and that the manufacturing sector is unlikely to ever again be the mass employer in the west that it once was.

Overall, the book has a positive, realistic message: that globalisation has created opportunities as well as problems for western manufacturers. That the rising nations of Asia, Africa and South America can provide huge markets for the advanced products of western manufacturing firms. And that many of these products can be profitably manufactured, as well as designed, in the rich world.

Peter Marsh is a contributor to the website MadeHereNow.com which showcases UK manufacturing success stories and contributes to the ongoing debate about the factories of the future.

 

 

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One Response

  1. […] for the economy as a whole grew by only 0.2%. In his book, The New Industrial Revolution (reviewed here) Peter Marsh, the Financial Times’ former manufacturing editor, describes manufacturing […]

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Joseph Walker

Joseph Walker