The Pan-Industrial Revolution: How New Manufacturing Titans Will Transform the World
Houghton Mifflin Harcourt (October 2018)
How to create “vast, unltrapowerful, hyperefficient production systems”
Abraham Lincoln once suggested that “the best way to predict the future is to create it.” That is even more true — and more important — now than it was then.
In order to establish a context for the abundance of information and insights that Richard D’Aveni provides, my preliminary research indicates that the first industrial revolution spans from the end of the 18th century to the beginning of the 19th century. It witnessed the emergence of mechanization, a process that replaced agriculture with industry as the foundations of the economic structure of society. Mass extraction of coal along with the invention of the steam engine created a new type of energy that thrusted forward all processes thanks to the development of railroads and the acceleration of economic, human and material exchanges. Other major inventions such as forging and new know-how in metal shaping gradually drew up the blueprints for the first factories and cities as we know them today.
Nearly a century later at the end of the 19th century, new technological advancements initiated the emergence of a new source of energy: electricity, gas and oil. As a result, the Second Industrial Revolution is remembered for the development of the combustion engine set out to use these new resources to their full potential. Furthermore, the steel industry began to develop and grow alongside the exponential demands for steel. Chemical synthesis also developed to bring us synthetic fabric, dyes and fertilizer. Methods of communication were also revolutionized with the invention of the telegraph and the telephone and so were transportation methods with the emergence of the automobile and the plane at the beginning of the 20th century. All these inventions were made possible by centralizing research and capital structured around an economic and industrial model based on new “large factories” and the organizational models of production as envisioned by Taylor and Ford.
And then in the second half of the 20th century, a third industrial revolution appeared with the emergence of a new type of energy whose potential surpassed its predecessors: nuclear energy. This revolution witnessed the rise of electronics—with the transistor and microprocessor—but also the rise of telecommunications and computers. This new technology led to the production of miniaturized material which would open doors, most notably to space research and biotechnology. For industry, this revolution gave rise to the era of high-level automation in production thanks to two major inventions: automatons—programmable logic controllers (PLCs)—and robots.
The first industrial revolution used water and steam to mechanize production, the second used electric energy to create mass production and the third used electronics and information technology to automate production. Today a fourth industrial revolution is underway which builds upon the third revolution and the digital revolution that has been taking place since the middle of the last century. This fourth revolution with exponential expansion is characterized by merging technology that blurs the lines between the physical, digital and biological spheres to completely uproot industries all over the world. The extent and depth of these changes are a sign of transformations to entire production, management and governance systems.
The genesis of the fourth and current industrial revolution is situated at the dawn of the third millennium with the emergence of the Internet. This is the first industrial revolution rooted in a new technological phenomenon—digitalization—rather than in the emergence of a new type of energy. This digitalization enables us to build a new virtual world from which we can steer the physical world. The industries of today and tomorrow aim to connect all productive means to enable their interaction in real time. Factories 4.0 make communication among the different players and connected objects in a production line possible thanks to technology such as AI, Cloud, Big Data Analytics, and the Industrial Internet of Things.
What are the defining characteristics of this latest revolution? What are the unique opportunities it creates that will have the greatest potential? How to take full advantage of those opportunities? Just about everything business leaders need to know — and understand — is explained in this brilliant book.
For example, in Part One: The Revolution Is Here (Chapters 1-6), D’Aveni
o Suggests the nature and extent of “things to come”
o Explains how expanded scope makes (almost) “anything, anywhere”
o Also explains how boundless scale makes more, “faster and cheaper”
o Explains the power of industrial platforms within the emerging digital business ecosystems
o Examines how coding the future helps to build “the world’s first industrial platforms”
o Explains how the emergence of the pan-industrials illustrates “the triumph of bigness”
D’Aveni notes that additive manufacturing (AM) is a relatively new term but the methodology is not. Of special interest to me is which new applications of AM will be developed by companies such as Cargill, GE, Jabil, Lockheed Martin, Siemens, and United Technologies. Breakthrough results can only be achieved by breakthrough thinking about how AM can establish and then sustain a competitive edge in terms of speed-and-flexibility, innovation, “deep-pockets,” and reputation. (Please see Pages 115-128.)
I agree with Richard D’Aveni: “The future that our children and grandchildren will inherit is being created now — by corporate moguls, entrepreneurs, research scientists, engineers, software developers, and other visionaries who are exploring the amazing capabilities of the new technologies and imagining new ways to use them.”
I think this is a must read for leaders in all organizations, whatever their size and nature may be. Meanwhile, they would be well-advised to consider this observation by Alvin Toffler in his classic work, Future Shock (1984): “The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn.”