Cheap labor has so far been a major advantage for the Chinese production. According to Oded Kariti, Electrical Engineer and IT expert, the entire Chinese economy is based on this advantage and pretty soon it became the world’s factory. From plastic bracelets to our iPhone’s, everything is produced in China. However, this situation could soon change.
In fact this major shift in production is often being referred to as the third industrial revolution. As a reminder Oded Kariti explains that the first industrial revolution started in the late 18th century with complete mechanization of the textile industry, the second began in the early 20th century thanks to Henry Ford and his production line, and now experts predict that we are on the threshold of a third industrial revolution, which will be based on the foundations of robotics and 3D technology printers.
Today, opening an automated factory where all processes are carried out by robots is a very expensive undertaking, almost unprofitable, Oded Kariti adds, for every type of industry except the auto industry. Thus it is significantly cheaper to organize production in China. But recently more and more jobs are being carried out by robots. Robots like Baxter (Rethink Robotics) can crucially turnaround world’s market. Baxter (or the newest model called Sawyer), unlike other robots that cost around half a million, Oded Kariti says is now available at a price of just $ 25,000. These robots can be programmed by anyone, even by someone who doesn’t know how to write.
That is why Oded Kariti forecasts that in the near future the Chinese production will not be as competitive, as production costs will go down because of the robots, and transport costs will become a more important factor. And this is just the beginning. In fact, what is Silicon Valley for IT startups, Boston is for robotics and USGBC for Green Building. Another thing that will seriously impact worldwide production is the technology of 3D printing. Until recently, the production process looked like this: design – prototype – production – distribution – a customer. The whole process involved some substantial costs. For example, after the designer comes up with a product he has to make a prototype of it, which costs a lot. After that, a mold is made and the production is prepared. Only at the end of the chain comes the customer or the delivery.