In January of 1995, Nicholas Negroponte wrote a book that changed my life: “Being Digital.” In the book, Negroponte, who founded MIT’s Media Lab, wrote that the future of our economy was going to be based on bits rather than atoms, and that this shift from physical manufacturing to digital engineering was going to create one of the most profound jumps in human technological and social evolution. Of course, he was right, at least when it comes to the developed world.
Today, much of what we do in the developed world has a digital component. We wake up and read the news, often digitally. We contact our friends online, we prepare our work on our computers, we collaborate with our teams through various technologies, and in the evenings we watch our television or movies or listen to our music, all digitally. Many of the products and services we use are either digitally based, or they rely on digital components that are a critical part of the value chain. In other words, bits, not atoms, are becoming the basis for 21st century life.
Israel has benefited greatly from this shift from atoms to bits.
As a small country with a negligible local market, atom-based manufacturing couldn’t scale well in Israel due to the fact that, until now, atom-based manufacturing required production of a large quantity of products in order to be profitable. Due to the structure of the assembly line (the 20th century’s most defining element), the more one produced, the less expensive the labor, the cheaper each individual product, and the more competitive the business. Because Israel couldn’t compete at manufacturing, with its lack of natural resources (human as well as material) and lack of home market, we focused on bit-based engineering to manufacture products that could be shipped anywhere in the world in an instant. Code only requires one main natural resource we have a lot of: our high-value human capital. See “Start-Up Nation” for more on that, of course.
But the biggest jump has yet to come. The past decade has birthed a number of world-changing technologies, many of which (Facebook, tablets) have deeply changed our lives. One of the biggest changes has been the ability to personalize everything digital: one’s own iPod plays the songs one likes, one’s smartphone is set up exactly to one’s preferences, one’s email is customized, and one’s social network profile is optimized. This personalization is a wonderful thing, as individuals are empowered to create their world in their own image, to experiment and share, to shape their daily experience. But until now, it was limited to bits.
The next big thing will be the personalization of atoms, and all that atoms do when they’re brought together into physical objects. Thanks to the rapid advances in what is known as additive manufacturing (a.k.a. 3D printing), one can print a chair that is to the exact specifications of one’s liking, or a cup that is personalized in shape as well as design, or a car that is more efficient than anything built on an assembly line. The materials used to print can be shipped in bulk, and are easily recycled, making location ever less important in manufacturing. But most importantly, 3D printing breaks the century of tyranny of mass-production by centering production around the individual, enabling the individual to do to the physical world what she’s grown used to doing in the digital world — personalize.
Much needs to be done before the promise of additive manufacturing is fully realized. New chemical compounds need to be developed to serve as the “stuff” things will be built out of. New massively parallel printing technologies will need to be developed, and new standards will need to be set to ensure safety and quality for objects produced. But all of that is around the corner, and the country that has the most to gain, and the most to lose, from the growth of this new technology is Israel.
Israel has the most to gain because this brave new world of manufacturing does not depend on raw materials, cheap labor or direct transport routes — all things Israel lacks, and which have worked against Israel when it came to competing in the field of consumer products.
Israel has the most to gain because with this new technology, products can be designed in Petah Tikva, over networks secured by coders from Haifa, using quality assurance software and scanning developed in Holon, fraud prevention scripts maintained in Herzliya, even as they are “produced” locally in Wichita, Kansas. Israel is already leading the world in terms of prototype printing (with global leaders such as Objet, which recently merged with a US firm), but we are yet far away from developing an ecosystem for consumer product manufacturing that will include all of the high-value elements of the 21st century made to order manufacturing process.
Israel has the most to lose because Israel’s only competitive advantage in manufacturing has to do with high-value machined products, such as those created by ISCAR. That competitive advantage will soon be lost as metallic substrates become standard in high-value 3D printers, a technology that exists already today, even if for the moment it is a bit too expensive to put a dent in today’s manufacturing orders. If Israel does not invest today in the technologies, skills and academic insights needed to lead the field of consumer-oriented additive manufacturing, it will be behind the curb for years to come, and will lose not only the potential for future employment in this sector, but also the real manufacturing jobs that make up so much of our current economy.
If we want to successfully make the jump from start-up nation to maker nation, we’ll need a new breed of public-private partnership, one that not only learns from what the government did to kickstart the venture capital industry in Israel, but also recognizes that the investment in innovation in manufacturing will require a lot more academic participation, deeper pockets for primary research, and a new paradigm for entrepreneurship. We can learn a lot from the fund created by the US government in doing so — but we need to bring our Israeli entrepreneurial flavor into the mix.
And we need to do it fast.
In the last month alone, the US government and the Pentagon have made $1 billion available to US firms to ensure the US has a headstart in the race to become the 21st century manufacturing superpower. And China is not far behind.