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AP-SOSC-2340 Europe and Technology

Lecture notes that focus on the digital economy in Europe
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Intermediate Business and Society (AP-SOSC-2340)

743 Documents
Students shared 743 documents in this course
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York University

Academic year: 2019/2020
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GAME-CHANGING TECHNOLOGIES FOR EUROPEAN MANUFACTURING

The manufacturing sector has always been at the forefront of technical innovation. Since the industrial revolution, its development has been punctuated by leaps driven by the successive introduction of radical technological breakthroughs. As a result, the growth of productivity in manufacturing has been consistently above that of other sectors, creating the structural foundations of the abundance of material goods currently enjoyed in advanced economies. But such a process of creative destruction also has a profoundly disruptive side, as reflected in the socio-economic difficulties historically faced by workers whose skills became obsolete by the introduction of new technologies, or by the existence of entire geographic areas scarred by the effects of industrial restructuring. It is therefore important to identify the potential effects of disruptive technologies in the manufacturing sector at the earliest opportunity. This will help us to nurture these technologies to maximise the potential benefits, but also to minimise the wider social disruptions that they may provoke. With these objectives, Eurofound (2018) recently carried out a detailed qualitative study of five technological breakthroughs, all of which are still in their infancy but have the potential to fundamentally transform the future of manufacturing in Europe. For each of these five technologies an international research team

identified and interviewed a number of key informants (mostly scientists and entrepreneurs, but also social partners and government representatives), and carried out regional and company case studies, in order to gather original information on the potential effects of these technologies on the production process, work and employment. These were the five technologies studied:

advanced industrial robotics (AIR) – involving machines designed to perform industrial tasks automatically, with high programmability and the capacity to interact with their environment thanks to the use of digital sensors •

additive manufacturing (AM) – involving digitally controlled devices that add layer on layer of material(s) to create objects from 3D digital models

  • industrial internet of things (IIOT) – the use of connected sensors attached to different objects throughout the production process to feed live data to central computers

  • electric vehicles (EVs) – vehicles whose main system of propulsion depends on (externally generated) electricity rather than fuel

  • industrial biotech (IB) – the use of biological processes of living organisms for industrial purposes, drawing on recent scientific insights such as systems genomics and metabolomics.

limits the potential further impact of AIR in this sector (in contrast with the service sector, where the degree of automation is still low).

  • IIOT can have a significant impact on all downstream stages in the manufacturing process, from inbound logistics to after-sales services. In core production activities, it can boost efficiency by massively increasing the transparency and control of the system. In marketing and services, it can expand significantly the range of possibilities because it allows for the maintenance of a remote connection to the final product.

  • AM would have a significant impact on the upstream stages, especially research and development and design, but also on logistics and production. In many ways AM can be considered the most radical of the technologies studied, since it could theoretically collapse the entire manufacturing process into a single step (that of physically rendering a 3D model).

Since the other two technologies (EV and IB) are product rather than process innovations, they cannot be linked to a particular stage of the manufacturing process.

What are the potential effects of these technologies on the manufacturing production process? According to the interviews and case studies carried out, they can be summarised around four key concepts:

  • the increasing centrality of (digital) information
  • mass customisation
  • servitisation
  • increased labour efficiency THE INCREASING CENTRALITY OF (DIGITAL) INFORMATION As previously mentioned, the five technologies studied are part of a broader trend of increasing diffusion and widespread application of digital technologies to all kinds of economic activity. As a result of these changes, information becomes the key source of value, with physical production itself becoming increasingly secondary. The clearest example of this effect is AM, which dematerialises the entire manufacturing process except for the final step of physically rendering a digital model. Similarly, it is the information provided by IIOT sensors (and the capacity to process that information) that can optimise manufacturing processes and add further services to the products, while AIR go

SERVITISATION

The studied technologies tend to reduce the importance of production and logistics in manufacturing value added, while increasing that of research and development and design on the one hand and marketing and services on the other. IIOT in particular allows companies to maintain a line of communication and even control of the product after the sale, which facilitates the provision of after-sales services (the product can end up becoming just a platform for those services). In more general terms, these technologies involve the gradual replacement of manufacturing as traditionally understood (as the physical production of things) by a type of economic activity that is closer to the traditional concept of services. This process has become known as ‘servitisation’.

INCREASED RESOURCE EFFICIENCY These technologies provide much richer info over it, which is likely to lead to a considerably more efficient use of materials and energy in production. This has the potential to provide big environmental benefits, and was identified by several interviewees as a potential driver for the adoption of these technologies in the future in Europe, in the context of growing environmental concerns. When combined, the benefits of these technologies on the production process could

multiply, so the use of any of these technologies in an industrial process makes the introduction of the others much more likely. Information on every step and aspect of the industrial process as well as more precise control

EFFECTS ON WORK AND EMPLOYMENT In the course of interviews carried out for this study, scientists, entrepreneurs and social partners confirmed that these changes to the production process were also likely to have an impact on work and employment. The prognosis for employment numbers seems relatively clear: these technologies – particularly AIR, IIOT and AM, which cut across different processes and sectors – would have labour-saving effects, and could thus contribute further to a structural decline of employment in manufacturing that has been observed in most European countries for decades. In addition, structural changes in employment can be expected (see Arnold et al. this volume). First, we are likely to see an upgrading of occupations. These technologies tend to reduce the amount of labour input necessary in production line work, but increase the amount of labour input required in (higher-skilled) engineering, such as design or research and development, and business tasks such as marketing or services. Second, the skills requirements of those occupations are also likely to change, most obviously

where human operators feel permanently monitored and controlled. It seems difficult to maintain any sense of privacy at work if every object is observing you. And while management through algorithms and big data analytics can significantly improve the efficiency of manufacturing processes, it can also lead to work intensification and the stifling of any sense of autonomy for the remaining workers. Therefore, as with the introduction of any other technological innovation in the economy in the past, there is some ambivalence over the potential consequences for work and employment of the five game-changing technologies studied. Within the European social model this can be addressed by social dialogue and collective bargaining at different levels, including the firms and establishments themselves where these technologies are introduced. As part of this study, information was also compiled on the role that social dialogue is having in this respect, and the results were not very encouraging. Social dialogue does not yet appear to be playing a major role – if any – in the introduction of Industry 4 technologies in Europe. The notable exception is Germany, where there has been an important debate with engagement of social partners and policymakers on the implications of Industry 4 on work and employment, around the concept of ‘Arbeit 4’ (see Rahner and Schönstein this volume). A

similar debate between social partners and policymakers across Europe is needed.

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AP-SOSC-2340 Europe and Technology

Course: Intermediate Business and Society (AP-SOSC-2340)

743 Documents
Students shared 743 documents in this course

University: York University

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GAME-CHANGING TECHNOLOGIES FOR EUROPEAN MANUFACTURING
The manufacturing sector has always been at the forefront of technical
innovation. Since the industrial revolution, its development has been punctuated
by leaps driven by the successive introduction of radical technological
breakthroughs. As a result, the growth of productivity in manufacturing has been
consistently above that of other sectors, creating the structural foundations of the
abundance of material goods currently enjoyed in advanced economies. But such
a process of creative destruction also has a profoundly disruptive side, as
reflected in the socio-economic difficulties historically faced by workers whose
skills became obsolete by the introduction of new technologies, or by the
existence of entire geographic areas scarred by the effects of industrial
restructuring. It is therefore important to identify the potential effects of
disruptive technologies in the manufacturing sector at the earliest opportunity.
This will help us to nurture these technologies to maximise the potential benefits,
but also to minimise the wider social disruptions that they may provoke. With
these objectives, Eurofound (2018) recently carried out a detailed qualitative
study of five technological breakthroughs, all of which are still in their infancy but
have the potential to fundamentally transform the future of manufacturing in
Europe. For each of these five technologies an international research team2

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