July 6, 2017

Posted on July 6, 2017 by Synergis Director of Sales, Manufacturing, Roy Martin
Should you be concerned? After all, if it’s happened already, it’s too late to do anything about, right?  I’ll answer that question with a famous quote: “Those that don’t learn from their mistakes are doomed to repeat them.”
In other words, it’s never too late.
This blog is my takeaway from a presentation by one of the country’s leading futurists and entrepreneurs; John McElligott, CEO of York Exponential and The Fortress.
The presentation talks to some incredible advancements over the last 12-24 months in three key areas:

  • Robotics
  • Internet of Things (IOT)
  • Artificial Intelligence (AI)

These advancements will create significant challenges or disruption to the manufacturing industry; however, for those willing to embrace this disruption the opportunities will be endless.
John provides context to this disruption, by pointing to four key facts:

  1. The world’s largest taxi firm, Uber, owns no cars.
  2. The world’s most popular media company, Facebook, creates no content
  3. The world’s most valuable retailer, Alibaba, carries no stock
  4. The world’s largest accommodation provider, Airbnb, owns no property

These companies are all less than 10 years old, but the industries they’re impacting are thousands of years old; and nobody running these companies come from the industries they’re impacting.
This disruption is not going to slow down because it’s not just the technology; it’s the millennial mindset which showed its face as early as 15 years ago with the downloading and sharing of music via Napster.
Technology and this mindset move so quickly because it does so exponentially; not in the linear fashion that we as humans have become conditioned to think in; who could have foreseen the impact of the first iPhone, which was released less than 10 years ago.
We are at the beginning of the second machine age. The first one was powered by the steam engine and catapulted the world to civilization; we went from working seven days per week to five and industries from healthcare to education were all impacted; prosperity grew rapidly across the globe.
This second machine age will be significantly different. It will be powered by robotics, artificial intelligence (AI) and the Internet of Things (IOT).
What does this second machine age or as The World Economic Forum calls it, the Fourth Industrial Revolution, look like? What’s involved?
In short:

  • Industry 4.0 – Smart Factories and Networked Manufacturing
  • Robotics and IOT – Medical, Educational, Consumer & Industrial
  • Artificial Intelligence & Software Bots – technology that learns, adapts & “evolves” to become more efficient on its own

Today, robots sit on the factory floor, connected to a network and changes can be made autonomously. Within 12 months Robots will be working their way out of our factories into our communities, our businesses, our educational institutions and our homes. Statistics released project more than 500 Billion connected devices by 2025.
An indication of how quickly technology is moving and how even experts struggle to keep up, can be seen in the FAA’s projection back in 2010, that by the year 2020 there would be more than 15,000 drones in the air. As of March 2016, there were more than 15,000 drones being sold every month; indeed the Christmas period of 2015 saw more than 11 million drones sold.
Artificial intelligence is making huge leaps and is constantly in the headlines. In March of 2016 an historic event took place: Googles AlphaGO defeated a master GO player.
What is Go?  It is an ancient Chinese board game, that unlike Chess (which has a finite number of outcomes), has almost limitless outcomes (trillions upon trillions). As such, experts had said we were decades away from such an occurrence; because it wasn’t just about algorithms it was also about intuition and learning; and therein lies the power of artificial intelligence. Unlike traditional robots, AlphaGo was not programmed to do anything, it was programmed to learn. It watched and analyzed thousands of games on line and played millions of games against itself and in a few short months accomplished something that was thought to be decades away.
This all leads us to a conversion point and in short requires us to think in a completely different way; for example, we need to think of connected devices, such as a phone, not as a phone but as a platform.
There is no way 10 years ago, that a taxi driver thought the thing they put up to their ear, their mobile phone, would put them out of work inside 10 years.
Equally sobering was a report released by the Gartner Group in 2015 that indicated that by the year 2025, more than one third of our workforce population may be unemployable; not unemployed, unemployable. Advancements in Artificial Intelligence are moving so rapidly our communities, businesses and educational institutions cannot keep up.
These advancements are so rapid, in large part, because millennials are mass early adopters. However, businesses do not need to think only about engaging millennials; they need to think about engaging the next generation; the children of millennials. They are not early adopters, they “just are.”
A perfect example took place recently in East Palestine, Ohio (April 13th 2017), where an 8-year old boy developed a craving for a cheeseburger around 8pm in the evening; right after his parents fell asleep. Not to be deterred, the young boy took to “You Tube in order to teach himself how to drive”, took money from his piggy bank, put his sister in the car with him and drove to McDonalds. By all accounts, he obeyed every traffic law and drove effortlessly thru downtown to McDonalds to get his cheeseburger. Thankfully, a family friend recognized the children and called the grandparents and in a happy ending, the young boy and his sister were able to eat their cheeseburgers while waiting for the grandparents.
Radical change has happened and is happening and won’t slow down; what does that mean for manufacturers.
John McElligott uses a famous, but today little known plan from World War 2 to frame how this can be a very positive time and place to be a manufacturer. The plan was call the York Plan and was launched in the city of York, Pennsylvania in 1941.
To summarize John’s account of the motive behind and the formation of this plan, John points to the general feeling in spring of 1940, that the USA did not need to be concerned with World War 2; it was going on in Europe and didn’t concern Americans and everyone had gone through enough in World War 1. However, the leaders in York, PA knew that World War 2 would impact everyone.
Subsequently the Manufacturing Association of York challenged the manufacturing leaders of York, PA to create a plan based on three guiding principles. In summarizing those principles in a non-political sense, those principles spoke to putting aside differences, doing what you could with what you had and involving everyone, regardless of socio-economic background.
After six months, those leaders came up with the York Plan of 1941. It was a 15 point plan that included such radical ideas as Crowd Funding, Open Sourcing, Monetizing Excess Capacity & Accelerated Education; everything that the technology world has been doing for the last 15 years.
The plan was so successful that one third of all revenues and everything created in World War 2 came out of Pennsylvania. That success is further validated by the fact that York, PA, became the third most important target for the Japanese Air Force, after the White House and the Pentagon.
In drawing the discussion to what now, John McElligott summarizes that the last time the world changed this much, was indeed in 1941 and it was the manufacturers who led the way; and while a touch dramatic, it was the manufacturers who made the technology that saved the world.
So what now?

  1. Accept this is happening – there are still influential manufacturing leaders that believe this is far off; a future that they do not need to worry about. As John says, we won’t be prepared if we don’t accept this is the past not the future; it happened and is happening; a perfect example is the fact the Senate was meeting in early 2016 to discuss robot or self-driving vehicles.
  2. Be Proactive not Reactive – just as the creators of the York Plan were in developing that plan “before” the Nazi’s were at the doorstep.
  3. Communication, Collaboration, Coalition – these were the three main points of the York Plan; in 1941 everything in York was about the York plan; in the schools, in the businesses and in the homes of everyone(communication). It required everyone to be engaged (collaboration) and the white house knew it couldn’t just be York and Pennsylvania; it needed to be the nation (which is in fact what the White House did with the York Plan; they took it national with the help of many of the York leaders).

John has been to the White House on multiple occasions to provide his insight on this challenge; nobody has the answer but they know it’s happening.

  1. Embrace Disruptors – A survey done in 2016 by Pew Research Institute in Washington DC, surveyed approximately 2000 people of all backgrounds. One of the questions asked was, “Did they think that in the future most jobs would be done by Robots?” More than 60% of them said yes. However, when surveyed as to whether they thought it would be their job, 80% said no. John puts this down to “Optimism Bias”; i.e. it will never happen to me! Interestingly, it was not the older generation (who have seen things change rapidly over time) who thought it wouldn’t happen to them, it was the millennials (who have just grown up in this rapidly changing technology world).
  2. Embrace new technology NOW! – today, a very small part of manufacturers budgets goes to technology; the current focus is getting things out of the door now. Technology needs to become a critical and key piece of every manufacturing company’s business plan. Just as in the war, when every company was a defense company (no matter whether they were a manufacturer, an educational institution, a hospital…..) every company will be a technology company.
  3. Train for jobs that are not here yet – historically the education/training institutions have asked manufacturers what type of skilled person they need… The answer is typically around what they need right now. The time to hire people to do jobs that are and will be needed, is not when they are needed, it’s before they’re needed.
  4. Don’t waste energy on saving obsolete or near obsolete challenges

In wrapping up this blog, we can look at what John is doing with this company. In 2016 his group acquired the Western National Bank in downtown York and founded ‘The Fortress,’ one of the first exponential technology, robotics, Artificial Intelligence and IOT training and community centers. On his company’s website, he makes a simple yet powerful statement:
‘In an uncertain future there will be two types of companies; the disrupted or the disruptors.’
He leaves the reader with a choice:
Will we look at this as our history, something we’ve done; or as our legacy, embracing disruption, being a leader, embracing the change and showing the world the way forward.
The difference is ‘history’ is something you look back upon; ‘legacy’ is something you live up to.