> Furthermore, within workshops, even for positions that are technically automatable, the cost-benefit analysis often doesn't justify the investment. After a decade of rapid automation, digitization, and intelligent upgrades in Chinese manufacturing, I think we've reached a certain plateau. I personally estimate (though I could be wrong) that we might not see another wave of massive automation upgrades in production workshops in the next few years.
> The next frontier for replacement is likely Artificial Intelligence (AI), particularly impacting the service sector and knowledge-based roles. Within a factory, while production line automation might be mature, there are still many management positions, data analysis roles, sales positions, and clerical jobs. The "intelligentization" of these roles is just beginning. Many companies I visit are now exploring how to use AI in these areas: customer service/sales, data operations, etc. This seems to be the emerging trend.
This is the key question, what happens next? Can factories go from directly from digitalization to AI frontier today or is the AI technology too immature for use in industrial contexts? Where will the next set of "dark factories" be built: USA? PRD? YRD? Singapore?
I think what's partially important is that the new wave of innovation will slim down entire firms - across the entire breadth of non-manufactoring roles - rather than the manufactoring process itself. Perhaps, in the future, management will have a much smaller headcount in proportion to manufactoring roles. I wonder where all those knowledge workers end up.
Very interesting interview, thanks for bringing it to us. I just finished Factory Girls and it's a good update to that. It's good that there seems to be more service sector jobs like the "product solutions engineer" role that indicate that workers are moving up the value chain. I do worry that if China is able to automate cheaply then some other areas of the world will not be able to use light industry as a rung on the development ladder. Some parts of Africa seem to be stuck in a low-value services trap. Thanks again for bringing us this interview.
They ought to highlight what this shift will entail for the wider economy. Moreover, they should have broken-down the service sector jobs that are absorbing the industrial labor. How do these jobs compare from the perspective of income, and social security? Are these service sector jobs actually better than the industrial jobs, or are they just propping up a gig-economy.
> Furthermore, within workshops, even for positions that are technically automatable, the cost-benefit analysis often doesn't justify the investment. After a decade of rapid automation, digitization, and intelligent upgrades in Chinese manufacturing, I think we've reached a certain plateau. I personally estimate (though I could be wrong) that we might not see another wave of massive automation upgrades in production workshops in the next few years.
> The next frontier for replacement is likely Artificial Intelligence (AI), particularly impacting the service sector and knowledge-based roles. Within a factory, while production line automation might be mature, there are still many management positions, data analysis roles, sales positions, and clerical jobs. The "intelligentization" of these roles is just beginning. Many companies I visit are now exploring how to use AI in these areas: customer service/sales, data operations, etc. This seems to be the emerging trend.
This is the key question, what happens next? Can factories go from directly from digitalization to AI frontier today or is the AI technology too immature for use in industrial contexts? Where will the next set of "dark factories" be built: USA? PRD? YRD? Singapore?
I think what's partially important is that the new wave of innovation will slim down entire firms - across the entire breadth of non-manufactoring roles - rather than the manufactoring process itself. Perhaps, in the future, management will have a much smaller headcount in proportion to manufactoring roles. I wonder where all those knowledge workers end up.
Great interview!
Nice overview, some endogenous forces
- the go west industrialisation which reduced the supply of migrant worker for coastal regions (on top of demographics)
- shift to services - eg Hangzhou the financial industry back office to Shanghai, more emphasis on consumption such as tourism
- shanzai manufacturing, the small family firms transformed into more nimble supply chain value-add
Very interesting interview, thanks for bringing it to us. I just finished Factory Girls and it's a good update to that. It's good that there seems to be more service sector jobs like the "product solutions engineer" role that indicate that workers are moving up the value chain. I do worry that if China is able to automate cheaply then some other areas of the world will not be able to use light industry as a rung on the development ladder. Some parts of Africa seem to be stuck in a low-value services trap. Thanks again for bringing us this interview.
They ought to highlight what this shift will entail for the wider economy. Moreover, they should have broken-down the service sector jobs that are absorbing the industrial labor. How do these jobs compare from the perspective of income, and social security? Are these service sector jobs actually better than the industrial jobs, or are they just propping up a gig-economy.