Module 5 Critical Thinking

The American manufacturing industry has had bad experiences over the last few decades. The employment rate has significantly decreased from 14% in 1996 to 8% at this time (Etzkowitz & Leydesdorff, 2014). As corporations look for low-cost labor in countries with fewer environmental and safety laws, many jobs have also been moved overseas. However, the steady introduction of technical advancements in the approaching years offers some optimism for the businesses. As stated below, these technological developments will play a variety of roles in how various sectors develop.

First, robotics and automation are becoming more prevalent in many industries. For instance, Most of car assembly companies are using robots to fix some parts and also in moving the parts that are to be used from one point to another. There is a rise in the number of robots from 2013 to 2017, and it is projected that the number will continue increasing in the coming years (Mokyr & Ziebarth, 2015). In addition to the increase in the number of robots, they are also getting more sophisticated in performing multifaceted tasks that man can take longer to complete. Increase and sophistication of robots are to the advantage of the firms as they will cut on labor cost as they increase productivity.

Secondly, cloud computing will help all sizes of industries to compete against each other. With the cloud computing, traditional software systems will no longer be necessary. Cloud computing will enable companies to share, consume, and storage resources in a straightforward way, with low cost and higher suppleness (Mokyr & Ziebarth, 2015). It is also possible that cloud computing will allow for high-performance infrastructure to be made available on mobile devices, thus earning a widespread adoption. It is also possible that cloud computing will allow for more effective and efficient business processes. For instance, cloud computing technology will reduce the time taken for transactions from the current 45 minutes to even less than 10 seconds.

Thirdly, technology will improve the connectivity between industries (Schwab, 2017). For instance, all industrial properties will be connected between factories as well as within the same factory (Mokyr & Ziebarth, 2015). Practically, there will be an exchange of data between sensors at each stage. This data will then be scrutinized to ensure that there is optimal operation. The future factory will be restructured on a network model, meaning that, it will become a connected digital platform.

Lastly, technology will make industrial workers’ jobs more flexible. Through advancements in technology, the number of people at the workplaces will reduce as those whose physical appearance is not much necessary will be working from the comfort of their homes (Schwab, 2017). This connects with the sophistication of the robots which will only require instructions and they do the physical tasks.

The graph below illustrates the effect of technological advancement on different cost curves.

AVC1

AVC

ATC1

ATC

MC1

MC

Technology

Shift depends on technological changes

As indicated on the graph, an improvement in technology results to downward movement of the cost curves. As described above, the resultant movement does not affect the shapes of and characteristics of the curves.

The nature of the shift is dependent on whether improvement in technology increases the productivity of labor or their combination.

References

Etzkowitz, H., & Leydesdorff, L. (2014). The endless transition: a triple Helix’of university industry government relations.

Mokyr, J., Vickers, C., & Ziebarth, N. L. (2015). The history of technological anxiety and the future of economic growth: Is this time different?. The Journal of Economic Perspectives, 29(3), 31-50.

Schwab, K. (2017). The fourth industrial revolution. Crown Business.