1. John Mauldin's newsletter last week had a graphic which captures what looks likely to be the primary economic challenge of our times. The paradox of increased production with fewer workers!
What makes this scary is the pace at which this is happening. The graphic below shows how the US shale industry has dramatically increased rig count over the past two years without increasing the workforce at all.
The amazing thing is that this transformation happened in two years; it didn’t take a generation or even half a generation. You were an oilfield worker with what you thought was potentially a lifetime of steady, well-paying – if dangerous, nasty, and dirty – work. And then BOOM! The jobs just simply disappeared. Your on-the-job experience doesn’t translate to any other industries very easily, and now you and your family are on the skids.
2. Ananth points to a nice Bloomberg spotlight on Fanuc, a 45 year old Japanese factory automation company, described in the article as the "planet's most important manufacturer".
The $50 billion company controls most of the world’s market for factory automation and industrial robotics. In fact, Fanuc might just be the single most important manufacturing company in the world right now, because everything Fanuc does is designed to make it part of what every other manufacturing company is doing... More and more, it’s Fanuc’s industrial robots that assemble and paint automobiles in China, construct complex motors, and make injection-molded parts and electrical components. At pharmaceutical companies, Fanuc’s sorting robots categorize and package pills. At food-packaging facilities, they slice, squirt, and wrap edibles...Fanuc manages to offer very high savings while maintaining 40 percent operating profit margins, a success... traced to the company’s centralized production in Japan, which is made possible, even though most of its products are sold outside the country, by the 243 global service centers that keep its robots operational. The company even profits from its competitors’ sales, because more than half of all industrial robots are directed by its computer numerical-control software. Between the almost 4 million CNC systems and half-million or so industrial robots it has installed around the world, Fanuc has captured about one-quarter of the global market... Fanuc’s Robodrills now command an 80 percent share of the market for smartphone manufacturing robots.
3. Finally, this New Yorker essay on the march of robots in American manufacturing has this tagline,
Once, robots assisted human workers. Now it’s the other way around.