In the late 18th century, the Industrial Revolution started the transition from a manual-labor based economy towards an economy based on using technologies, tools and machines to significantly improve the manufacturing of physical goods. Over the next two hundred years we have seen the industrial sector of the economy achieve major improvements in the productivity and quality of manufacturing, ranging from very simple to highly complex physical objects.
A major step in that remarkable story of innovation occurred around thirty years ago. Before that time, most manufacturing plants were fairly inefficient by almost any contemporary measure, and were turning out products of varying quality. Then, driven by the huge success of Toyota and other companies around the world, the industrial sector and academia discovered the merits of applying engineering discipline as well as a holistic, systems-wide approach to manufacturing processes. Company after company embraced the Toyota Way, Six Sigma, Lean Production and similar methods in their manufacturing and logistics operations, which have brought the industrial sector of the economy to a whole new level of productivity and quality.
The Industrialization of Services, Irving Wladawsky-Berger, February 23, 2009
I think Wladawsky-Berger is correct: the next wave of digital rationalization is going to be in services, and that explains the hype and or excitement around cloud-computing. I think he’s also right that a big part of this is going to be a massive reinvention of consumer appliances.
The genius behind the CD was that you had to re-buy all of your music; it was a boon to the music industry. The next wave will attempt to get us to re-buy all of our appliances. In part this is going to be a good thing– new appliances are more energy efficient, for example– but in part it’s going to be silly.
Do you need to be able to peek into your refrigerator at home while you are sitting at your desk at work? Someone will insist that your house’s Twitter account provides an essential service to yourself and your neighborhood. What is missing from the piece, though, is some sense of how these services will change work.
Efficiency and productivity push the unemployment numbers. Usually the larger economy compensates by creating jobs elsewhere. At least that’s how things have worked in recent decades. But at some point we will either have to invent faux industries to occupy our time or shorten the work week.