MANUFACTURING advances often take time to catch on. Only later does their real significance become apparent. The flying shuttle, invented in 1733 by John Kay, a British weaver, allowed the production of wider pieces of cloth. Because its movement could be mechanised, the shuttle later became one of the innovations which paved the way for the Industrial Revolution.
In 1913 Henry Ford brought motoring to the masses by making his Model T on a moving assembly line; but it was Ransom Olds, a decade earlier, who had come up with the idea of an assembly line to boost production of the Olds Curved Dash.
Throughout the 1980s factory bosses scratched their heads over Taiichi Ohno’s Toyota Production System and its curious methods, such as the just-in-time delivery of parts. Now it is the global benchmark for factory efficiency.
What, then, to make of the potential of Chuck Hull’s invention in 1983 of “stereolithography”? Mr Hull is the co-founder of 3D Systems, one of a growing number of firms that produce what have become known as 3D printers.
These machines allow a product to be designed on a computer screen and then “printed” as a solid object by building up successive layers of material. Stereolithography is among dozens of approaches to 3D printing (also known as additive manufacturing).
Printing has become a popular way of producing one-off prototypes, because changes are more easily and cheaply made by tweaking a 3D printer’s software than by resetting lots of tools in a factory. That means the technology is ideal for low-volume production, such as turning out craft items like jewellery, or for customising products, such as prosthetics.
Dental crowns and hearing-aid buds are already being made by the million with 3D printers. Because it deposits material only where it is needed, the technology is also good at making lightweight and complex shapes for high-value products ranging from aircraft to racing cars. GE has spent $1.5bn on the technology to make parts for jet engines, among other things.
But sceptics still rule the roost when it comes to goods made in high volumes. They say that 3D printers are too slow and too expensive—it can take two days to create a complex object. Unlike the techniques pioneered by Kay, Olds and Ohno, additive manufacturing will never revolutionise mass production. Such scepticism looks less and less credible.
Some of the new methods of 3D printing now emerging show that its shortcomings can be overcome. Adidas, for one, has started to use a remarkable form of it called “digital light synthesis” to produce the soles of trainers, pulling them fully formed from a vat of liquid polymer.
The technique will be used in a couple of new and highly automated factories in Germany and America to bring 1m pairs of shoes annually to market much more quickly than by conventional processes. A new technique called bound-metal deposition has the potential to change the economics of metal printing, too, by building objects at a rate of 500 cubic inches an hour, compared with 1-2 cubic inches an hour using a typical laser-based metal printer.
As in previous manufacturing revolutions, factories will take time to be transformed. The dexterity of human hands still beats the efforts to introduce the fully automated production of clothing, for example. But automation is spreading to every production line in every country, and 3D printing is part of that trend.
As wages in China rise, some of its mass-production lines are being fitted not just with robots but the first 3D printers, too. And as global supply chains shorten, bosses will want to use additive manufacturing to tailor products to the demands of local consumers. The full consequences of the technology’s spread are hard to predict. But when they do become clear, Mr Hull’s name may well be bracketed with the likes of Kay, Olds and Ohno.
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Steve Ovett, the famous British middle-distance athlete, won the 800-metres gold medal at the Moscow Olympics of 1980. Just a few days later, he was about to win a 5,000-metres race at London’s Crystal Palace. Known for his burst of acceleration on the home stretch, he had supreme confidence in his ability to out-sprint rivals. With the final 100 metres remaining,
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]Ovett waved to the crowd and raised a hand in triumph. But he had celebrated a bit too early. At the finishing line, Ireland’s John Treacy edged past Ovett. For those few moments, Ovett had lost his sense of reality and ignored the possibility of a negative event.
This analogy works well for the India story and our policy failures , including during the ongoing covid pandemic. While we have never been as well prepared or had significant successes in terms of growth stability as Ovett did in his illustrious running career, we tend to celebrate too early. Indeed, we have done so many times before.
It is as if we’re convinced that India is destined for greater heights, come what may, and so we never run through the finish line. Do we and our policymakers suffer from a collective optimism bias, which, as the Nobel Prize winner Daniel Kahneman once wrote, “may well be the most significant of the cognitive biases”? The optimism bias arises from mistaken beliefs which form expectations that are better than the reality. It makes us underestimate chances of a negative outcome and ignore warnings repeatedly.
The Indian economy had a dream run for five years from 2003-04 to 2007-08, with an average annual growth rate of around 9%. Many believed that India was on its way to clocking consistent double-digit growth and comparisons with China were rife. It was conveniently overlooked that this output expansion had come mainly came from a few sectors: automobiles, telecom and business services.
Indians were made to believe that we could sprint without high-quality education, healthcare, infrastructure or banking sectors, which form the backbone of any stable economy. The plan was to build them as we went along, but then in the euphoria of short-term success, it got lost.
India’s exports of goods grew from $20 billion in 1990-91 to over $310 billion in 2019-20. Looking at these absolute figures it would seem as if India has arrived on the world stage. However, India’s share of global trade has moved up only marginally. Even now, the country accounts for less than 2% of the world’s goods exports.
More importantly, hidden behind this performance was the role played by one sector that should have never made it to India’s list of exports—refined petroleum. The share of refined petroleum exports in India’s goods exports increased from 1.4% in 1996-97 to over 18% in 2011-12.
An import-intensive sector with low labour intensity, exports of refined petroleum zoomed because of the then policy regime of a retail price ceiling on petroleum products in the domestic market. While we have done well in the export of services, our share is still less than 4% of world exports.
India seemed to emerge from the 2008 global financial crisis relatively unscathed. But, a temporary demand push had played a role in the revival—the incomes of many households, both rural and urban, had shot up. Fiscal stimulus to the rural economy and implementation of the Sixth Pay Commission scales had led to the salaries of around 20% of organized-sector employees jumping up. We celebrated, but once again, neither did we resolve the crisis brewing elsewhere in India’s banking sector, nor did we improve our capacity for healthcare or quality education.
Employment saw little economy-wide growth in our boom years. Manufacturing jobs, if anything, shrank. But we continued to celebrate. Youth flocked to low-productivity service-sector jobs, such as those in hotels and restaurants, security and other services. The dependence on such jobs on one hand and high-skilled services on the other was bound to make Indian society more unequal.
And then, there is agriculture, an elephant in the room. If and when farm-sector reforms get implemented, celebrations would once again be premature. The vast majority of India’s farmers have small plots of land, and though these farms are at least as productive as larger ones, net absolute incomes from small plots can only be meagre.
A further rise in farm productivity and consequent increase in supply, if not matched by a demand rise, especially with access to export markets, would result in downward pressure on market prices for farm produce and a further decline in the net incomes of small farmers.
We should learn from what John Treacy did right. He didn’t give up, and pushed for the finish line like it was his only chance at winning. Treacy had years of long-distance practice. The same goes for our economy. A long grind is required to build up its base before we can win and celebrate. And Ovett did not blame anyone for his loss. We play the blame game. Everyone else, right from China and the US to ‘greedy corporates’, seems to be responsible for our failures.
We have lowered absolute poverty levels and had technology-based successes like Aadhaar and digital access to public services. But there are no short cuts to good quality and adequate healthcare and education services. We must remain optimistic but stay firmly away from the optimism bias.
In the end, it is not about how we start, but how we finish. The disastrous second wave of covid and our inability to manage it is a ghastly reminder of this fact.