What does this mean for advanced manufacturing?

Increasing demand for highly skilled workers

As technology progresses, developments in robotics, machine learning and artificial intelligence are contributing to the greater range of tasks and jobs becoming automated.

Technological change and automation will increase the demand for certain skills related to advanced manufacturing, with others declining. As outlined in chapter 3, the availability of people with entrepreneurial and relevant STEM (science, technology, engineering and mathematics) skills seem to be universally accepted as necessary to support future innovation and economic growth. The changing demand for particular skills in advanced manufacturing was summarised by CEDA:

… this transition will most likely mean fewer overall jobs in what is described as traditional manufacturing. However, these new jobs will be higher skill, higher paying and make a bigger contribution to the economy. (2014, p. 4)

As described above, the move towards the ‘internet of everything’ has led to the rapid collection of large data sets. This has created a demand for data scientists with skills in statistical analysis of big data. Similarly, these big data sets have also given rise to the development of machine to machine learning and artificial intelligence – increasing the demand for high level math and computer programing skills.

Creative and design skills are also becoming an increasingly important element of STEM, since creativity is an essential part of innovation. Skills associated with creativity and perception are not only important for finding novel and innovative solutions, they are also skills that are unlikely to be made redundant by automation (chapter 3). One example of

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this is in the field of 3D printing. Advanced manufacturing using 3D printing processes needs designers and engineers who are capable of using computer software for design. In addition to computing skills, it requires a different design thought process to traditional manufacturing as more complex shapes are possible and mathematical programs can be used to optimise design features:

Part of the education process involves designing for manufacturing, with previous constraints posed by designing for machining or moulding removed. For some engineers/designers who have had to create with these constraints in mind, it can take a little adjustment when additive manufacturing is introduced. … you spend years learning all of the things that you cannot do in the name of conforming to traditional manufacturing methods (Balinski 2014, p. 2).

3D printing has applications in many industries, often requiring engineering and design skills combined with knowledge of that particular industry. For example, 3D printing of health products (such as prosthetics) will require a biomedical background in order to innovate and develop new products (Angeles 2013).

Nature of production and changing capital requirements

Advanced manufacturing techniques may mean the competitive advantage of countries with low-cost production may decline in the future for some manufactured products or processes. This will be more the case for products that involve shorter production runs, more design changes, and more expensive material inputs. As described above, the distinction between industries that make things and those that provide services is diminishing, with less of the firm value added coming from the manufacturing part of the production cycle (figure C.1).

This has implications for the importance of scale in the overall production process, as well as the types of capital needed by firms and how much work will be outsourced.

• Advanced manufacturing requires highly specialised capital that is often costly and needs correctly skilled labour to operate or oversee its use.

• There may be greater scope for firms to rent the services of specialist providers, reducing the physical capital needed to support production. For example, the ability of 3D printers to produce many different products will support business models that rent or contract out the production phase. This will allow sharing of facilities across firms

— for example, the Commonwealth Scientific and Industrial Research Organisation have a $6 million metal 3D printing facility (called Lab 22) available for industry use for a fee (CSIRO 2016a). Some universities are similarly renting out scientific and computing laboratories and data analytic facilities for businesses to use (University of Melbourne 2016; University of Technology Sydney 2016).

• Digital technologies allow some firms to work more as an organising platform (researching the market, designing and testing a product, manufacturing, sales, delivery, after-sales service, and sometimes disposal). These features make entry easier for new firms, with scope to significantly increase competition.

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• 3D printing may weaken some economies of scale that exists in traditional high volume manufacturing, but this is likely to be in niche markets (Hall 2013).

Broader policy issues

Advances in digital technologies also present a range of policy issues (including cyber security, privacy and ethics) that affect the advanced manufacturing sector.

• While the IoT presents opportunities for advanced manufacturing businesses, it also raises the possibility of cyber security attacks on businesses. Manufacturing firms developing state of the art technology could become targets for cyber-attacks ,with their intellectual property stolen, used or sold (Internet Society 2015).

• Manufacturing businesses may need to devise safeguards in products with internet connectivity to provide consumers with some level of protection from cyber threats.

For example, cyber-attacks on Fitbit user accounts allowed hackers access to emails and passwords (often used for a number of online accounts), along with location information (for example, where a person lives, travel routes and exercise locations), and when Fitbit users were at these places or undertaking particular activities.

(Spary 2016).

• Large networks of sensor-enabled devices are designed to collect data about operating environments, which can include data related to people. Both the customer and the manufacturer benefit from this data. But when businesses analyse data collected or match with other data streams to provide a more detailed picture of a customer, privacy issues are often raised (Internet Society 2015).

• 3D printing currently offers many benefits in medicine but it also raises ethical issues.

A key aspect of 3D bio-printing is the personalised nature of the treatment, making it difficult test the safety and effectiveness of the treatment. The safety and effectiveness of bone replacement (such as hips or knees) with custom printed titanium are well established. But printed organs from emerging materials such as stem cells raises questions of safety and the necessary regulatory framework that would be required (Dodds 2015).

• Artificial intelligence raises the possibility of copying human biases that might be embedded in data. For example, if past human decisions for forming recruitment shortlists built in biases against age, gender or race, then machine learning that emulated human decisions could replicate those biases. Human intervention is needed to short circuit such tendencies (Prof. Alan Winfield, personal communication, 28 January 2016).

• 3D printing makes it easier to copy designs and produce replacement parts. This raises intellectual property issues and requires consideration of whether the current regulatory system will remain fit for purpose. These issues are being explored in the Commission’s inquiry into Intellectual Property Arrangements (PC 2016b).

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