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Dr. Robert D. Atkinson Keynote at Manufacturing Perspectives — Innovation in Manufacturing: Driving Growth and Competitiveness
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Dr. Robert D. Atkinson Keynote at Manufacturing Perspectives — Innovation in Manufacturing: Driving Growth and Competitiveness

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Presentation from the Manufacturing Perspectives 2011 event in Chicago: Innovation in Manufacturing: Driving Growth and Competitiveness, presented by Robert Atkinson, President, Information Technology ...

Presentation from the Manufacturing Perspectives 2011 event in Chicago: Innovation in Manufacturing: Driving Growth and Competitiveness, presented by Robert Atkinson, President, Information Technology and Innovation Foundation

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    Dr. Robert D. Atkinson Keynote at Manufacturing Perspectives — Innovation in Manufacturing: Driving Growth and Competitiveness Dr. Robert D. Atkinson Keynote at Manufacturing Perspectives — Innovation in Manufacturing: Driving Growth and Competitiveness Presentation Transcript

    • Manufacturing Perspectives 2011Copyright © 2010 Rockwell Automation, Inc. All rights reserved.
    • November 15, 2011Innovation in Manufacturing: DrivingGrowth and CompetitivenessPresentation at Rockwell AutomationManufacturing PerspectivesChicago, IllinoisDr. Robert D. AtkinsonPresidentInformation Technology and Innovation Foundation
    • The Information Technology and Innovation Foundation (ITIF)is a Washington, D.C.-based think tank at the cutting edge ofdesigning innovation policies and exploring how advances intechnology will create new opportunities to boost economicgrowth and improve quality of life. ITIF focuses on:  National economic competitiveness;  Innovation processes, policy, and metrics  E-transformation (e.g., health, commerce, e-government)  IT and economic productivity  Science and technology policy  Innovation and trade policy 3
    • Today’s Presentation1 Where Are We in U.S. Manufacturing?2 Why Innovation is Key to Manufacturing Renewal3 Why is IT Driving Manufacturing Innovation? Key Trends in IT Evolution and Intersection with4 Manufacturing5 What Should Washington Do?6 Why Hasn’t Washington Done More? 4
    • Manufacturing is a Key Driver of U.S. Economic Growth Had U.S. manufacturing grown at the same rate as the overall economy over the past decade, the economy would have as many as 8 million more jobs. Manufacturing jobs pay 9% more than jobs in the overall economy. Manufacturing accounts for 57% of U.S. exports. A 10% increase in sales due to exports produces twice as many jobs as a 10% increase in domestic demand. 5
    • U.S. Manufacturing Job Growth Was the Worst of A Sample of OECD Nations100%90%80%70% United States Canada60% Australia50% Japan France40% Germany30% Italy20% Netherlands Sweden10% United Kingdom (1) 0% 6
    • U.S. Manufacturing Jobs Fell Precipitously in the Last Decade25000200001500010000 5000 0 7
    • But Not Principally Because of Productivity2000018000 56 % - 1990s1600014000 61 % - 2000s1200010000 8000 6000 4000 2000 0 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 8
    • Real Manufacturing Value-Added As Share of GDP14.0%12.0%10.0%8.0% Manuf6.0%4.0%2.0%0.0% 1987 88 89 1990 91 92 93 94 95 96 97 98 99 2000 01 02 03 04 05 06 07 08 2009 Source: Bureau of Economic Analysis 9
    • Real Manufacturing Value-Added As Share of GDP14.0%12.0%10.0%8.0% Manuf6.0% Nondurables4.0%2.0%0.0% Source: Bureau of Economic Analysis 10
    • Real Manufacturing Value-Added As Share of GDP14.0%12.0%10.0%8.0% Manuf Durables6.0% Nondurables4.0%2.0%0.0% Source: Bureau of Economic Analysis 11
    • Real Manufacturing Value-Added As Share of GDP14.0%12.0%10.0%8.0% Manuf Durables6.0% Nondurables Computers4.0%2.0%0.0% Source: Bureau of Economic Analysis 12
    • Real Manufacturing Value-Added As Share of GDP14.0%12.0%10.0%8.0% Manuf Durables Durables - computers6.0% Nondurables Computers4.0%2.0%0.0% Source: Bureau of Economic Analysis 13
    • Real Manufacturing Value-Added As Share of GDP14.0%12.0%10.0% Manuf Manuf -8.0% computers Durables Durables - computers6.0% Nondurables Computers4.0%2.0%0.0% Source: Bureau of Economic Analysis 14
    • Today’s Presentation1 Where Are We in U.S. Manufacturing?2 Why Innovation is Key to Manufacturing Renewal3 Why is IT Driving Manufacturing Innovation Key Trends in IT Evolution and Intersection with4 Manufacturing5 What Should Washington Do?6 Why Hasn’t Washington Done More? 15
    • We Are Competing With Developing Nations for Cost-Based Manufacturing 2008 Hourly Compensation Costs in Manufacturing (U.S. = 100)160 150140 131120 111 100100 86 86 80 58 60 50 40 27 26 19 20 4 0 16
    • Easier to Compete in High-Tech Manufacturing 100 90 80 70 60 50 40 30 20 10 0 Australia Canada Germany Japan Korea United Kingdom United States Low-technology Medium-low technology Medium-high technology High-technologySource: Stephen Ezell and Robert Atkinson (2011), International Benchmarking of Countries Policies and Programs Supporting SME Manufacturers. Washington: DC: Information Technology and InnovationFoundation, September. Data from OECD, “Industry and Services STAN Database: “Value-added shares relative to manufacturing,” http://stats.oecd.org/index.aspx?r=228903 17
    • Today’s Presentation1 Where Are We in U.S. Manufacturing?2 Why Innovation is Key to Manufacturing Renewal3 Why is IT Driving Manufacturing Innovation? Key Trends in IT Evolution and Intersection with4 Manufacturing5 What Should Washington Do?6 Why Hasn’t Washington Done More? 18
    • Because Moore’s Law Has Not Slowed DownTransistor Growth in Intel Computer Processor Chips 19
    • How much would 5 GBs of storage have cost using 1995 technology?1) $5.502) $553) $5504) $5,500 20
    • How much would 5 GBs of storage have cost using 1995 technology?1) $5.502) $553) $5504) $5,500  5 GBs cost $1.5 billion in 1960. 21
    • ICT Doubling (or Halving) Times Total bits shipped 1.1 years Microprocessor Cost per Transistor Cycle 1.1 years Magnetic Data Storage 1.3 years Dynamic Random Access Memory (RAM) 1.5 years Average Transistor Price 1.6 years Processor Performance in MIPS 1.8 years Modem Speeds 1.9 years Transistors in Intel Microprocessors 2.0 years Microprocessor Clock Speed 2.7 years
    • Rapid Growth in Bandwidth Capacity The capacity of the network backbone has increased by 18 million % in the past decade. By 2020, average network speeds are likely to be 3 million times greater than they were in 1990. 23
    • But Not All Due to Computing Solving a complex linear programming model:  1988: 82 years  2003: 1 minute An increase in efficiency of 43 million. Of this, a factor of roughly 1,000 was due to increased processor speed, whereas a factor of roughly 43,000 was due to improvements in algorithms.  Source: Ed Lazowski, University of Washington, Computer Science Dept. 24
    • Today’s Presentation1 Where Are We in U.S. Manufacturing?2 Why Innovation is Key to Manufacturing Renewal3 Why is IT Driving Manufacturing Innovation? Key Trends in IT Evolution and Intersection with4 Manufacturing5 What Should Washington Do?6 Why Hasn’t Washington Done More? 25
    • U.S. Manufacturing Has Lagged Behind in Using IT Ratio of Industry IT Spending to Value Added, 2009.14.12.10.08.06.04.02.00 26
    • But Manufacturing is About Atoms and Bits A part is information. What its characteristics are is information. Where it is information. What its condition is information.
    • New IT Capabilities are Enabling Smart Manufacturing• Smart sensing and instrumentation• Faster, more reliable networks• IT-enabled micro-controllers• Design and visualization software• High performance modeling and simulation programs• Machine vision
    • A Shift to the Cloud In 2011 44% ofmanufacturing companieswere either implementing orevaluating clouddeployments; and 22%already have implemented.(Source: IDC) 29
    • Near Infinite Internet Addresses IPV6 can provide multiple IP addresses to every grain of sand on the planet
    • Today’s Presentation1 Where Are We in U.S. Manufacturing?2 Why Innovation is Key to Manufacturing Renewal3 Why is IT Driving Manufacturing Innovation Key Trends in IT Evolution and Intersection with4 Manufacturing5 What Should Washington Do?6 Why Hasn’t Washington Done More? 31
    • Get the 4 T’s Right Tech Talent Flickr: marzzelo Trade Tax Flickr: Nedral Flickr: Alan Miles NYC
    • Today’s Presentation1 Where Are We in U.S. Manufacturing?2 Why Innovation is Key to Manufacturing Renewal3 Why is IT Driving Manufacturing Innovation4 Key Trends in IT Evolution and Intersection with Manufacturing5 What Should Washington Do?6 Why Hasn’t Washington Done More? 33
    • Economists Don’t “Get Manufacturing”“America’s role is to feeda global economy that’sincreasingly based onknowledge and servicesrather than on makingstuff.” (Larry Summers) 34
    • Economists Don’t “Get Manufacturing” “Any economist can tell youthat this decline (inmanufacturing) is notnecessarily a cause forconcern…We have become anideas economy.”(Kevin Hassett, American EnterpriseInstitute) 35
    • Nor Competitiveness “The notion that nationscompete is incorrect…countries are not to anyimportant degree incompetition with eachother.” (Paul Krugman) 36
    • Nor Competitiveness“Potato chips, computerchips, what’s thedifference.” (Bush Ieconomic advisor, MichaelBoskin) 37
    • Thank YouRobert Atkinson ratkinson@itif.org Follow ITIF: Facebook: facebook.com/innovationpolicy Blog: www.innovationpolicy.org YouTube: www.youtube.com/user/techpolicy Website: www.itif.org Twitter: @robatkinsonitif
    • Manufacturing Perspectives 2011Copyright © 2009 Rockwell Automation, Inc. All rights reserved.