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August 17, 2017 | by Steve Lawrence

A High Tech, Clear-Eyed Look at Manufacturing’s Future:

Robotics, AI and the digital revolution are just getting started.

When it comes to artificial intelligence, robotics and machine learning, super-consultant Neil Jacobstein seems to have worked for everybody of any significance. General Electric, Boeing, General Motors, Ford and the full government alphabet soup, from DARPA to NASA are all on his client list.

Jacobstein, a keynote speaker at the MSCI Economic Summit, Sept. 18-19 at the Renaissance Schaumburg Convention Center Hotel, will explore the dramatic developments in store for the industrial metals supply chain over the next five to 10 years and beyond.

“Computers have transformed our relationship with every form of information,” Jacobstein said in a pre-Summit interview. “Manufacturing is all about manipulating matter and we are already able to do that with atomic precision in lab settings. But what we are seeing today is just the beginning.

“The world of AI and advanced manufacturing today is mostly about creating sensors for pattern recognition in warehouses and on the factory floor, for predictive and more effective equipment maintenance,” he said. “We are now moving into making factory machines more responsive for more rapid turnover and more customization.

“Eventually we will have very customized manufacturing, a ‘run of one’ so to speak.” But he predicts that we are easily more than a decade away from doing that on a commercial scale.

“Already GE and others are making their processes more flexible with more precision, more reliability and better quality,” Jacobstein said. “And eventually we will have something far more precise than today’s 3-D printing with wildly better materials.”

Jacobstein said he fully understands that for many MSCI members with five year investment windows there may be a lot of skepticism about how immediate the impact of all this might be. But, he argues, you don’t get a revolution with five-year investment windows.

Even so, he emphasized, there is a lot for middle and smaller metals companies to think about and consider investing in. “Today there are advanced digital tools for diagnosis, planning, quality control, and increased flexibility all made possible by layering in sensors and machine learning on the factory floor. These are investments that can be made now.”

They will undeniably have a powerful impact on employment opportunities and industrial productivity, he said. “Yes AI and robotics will create new jobs. But the important thing is the ratio to new and displaced jobs in the unemployment picture. For the near future there will be more jobs lost than gained.

“There are three solutions to this,” he said. “Free education and retraining, access to advanced industrial tools and some kind of universal basic income supplement. These will be big adjustments for the society, but the alternative is those with jobs having to walk home each night looking over their shoulders. It is no fun being well off in a society of increasing poverty.”

One somewhat hidden benefit from this new world of truly advanced manufacturing will be a continuing increase in U.S. productivity. Since the recession, productivity as measured by the government has been all but stagnant and the economy has responded with sluggish sub 2% growth rates. “The metrics for productivity in the economy are not now geared to capture the positive impact of AI, machine learning and the rest on the economy,” said Jacobstein. “But can you get more work from the average factory worker today than before? Absolutely yes.”

Hear more about this trend and how your firm should prepare at MSCI's Economic Summit.