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Cloud & Manufacturing: M2M to the Rescue?

The Idea is Great. The Reality is Hard

Manufacturing comprises 17 to 18% of the global economy, and is set to rack up about $13.5 trillion in revenues this year. China assumed leadership in the sector a few years ago and will account for about $2.5 trillion this year; manufacturing revenues in the US will approach $2 trillion.

The developed world and China continue to dominate the sector. Things are less good among developing nations. As an example, the Philippines (where I have family and an office) produces about 1% of US revenue in manufacturing, with about 33% of the US population. There are slightly more than 1 million manufacturing jobs in the Philippines, compared to perhaps 14 million in the US.

So the US, which has notoriously seen its manufacturing sector gutted since the year 2000, has roughly 14 times the number of manufacturing jobs with only three times the population of the Philippines. This provides a good illustration of the yawning economic gap that remains between a highly developed nation and a classic developing nation.

Will It Be Fashionable Again?
It's been fashionable for a couple of decades to dismiss manufacturing, instead repeating the common wisdom that we've moved into a services-oriented economy. Everybody wants to build the Knowledge Society today.

I agree with the truism that old-style 1950s labor-intensive manufacturing will neither be returning to the US nor will elevate others into the modern age. Even China is now experiencing dramatically lower economic growth, and is finally starting to grapple with the enormous pollution problems the last two decades of growth have created. Meanwhile,

But, we still have to make stuff. Even as automated processes, robots, and emerging IoT feedback loops bring about productivity increases, there remains a need by so many of us pesky humans to have a job that can feed us and our families. Not everyone will be a Java programmer or PHP jockey. Not everyone will complete four years of college.

Meanwhile, recent studies by Circle Research and Vodafone indicate that 20% of manufacturing companies have taken up M2M. On a related note, Gartner has estimated there are already about 370 "things" in use in the global automotive business alone, with an anticipated rise to 3.5 billion by the year 2020.

Reality Bites
But the actual, physical challenge in developing a global manufacturing sector for the 21st century is amazingly daunting, in my view.

When I'm in Silicon Valley, safely ensconced in my office or at an event, I hear and see the fantastical visions being created there for the future. But when I'm driving around the now-barren streets of west Rockford, IL (a former small manufacturing hub located close to one of my US offices) or walking the streets of Metro Manila (where my research institute is headquartered), I see the challenge up close. There is nothing virtual or abstracted about it.

There are constitutional and structural barriers impeding the growth of a healthy economy in the Philippines, and a legacy of obtuse thinking in much of the US Midwest.

Optimism and great vision alone cannot improve things, and Silicon Valley's optimism should be taken in certain-sized doses only. It is especially difficult to swallow when accompanied by the self-centered Randianism or invasive Fabianism that are so popular in the region.

As I ride a jeepney along MacArthur Blvd. through the barrios of slightly industrialized Pampanga Province, Philippines, where factory workers in my family make about $70 per month, I wonder how M2M and the IoT can elevate the masses here. I have the same thoughts as I drive through the burned-out, greened-in former middle-class neighborhoods of west Rockford.

Optimism may be the least bad choice available.

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More Stories By Roger Strukhoff

Roger Strukhoff (@IoT2040) is Executive Director of the Tau Institute for Global ICT Research, with offices in Illinois and Manila. He is Conference Chair of @CloudExpo & @ThingsExpo, and Editor of SYS-CON Media's CloudComputing BigData & IoT Journals. He holds a BA from Knox College & conducted MBA studies at CSU-East Bay.

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