Mech Manufacturers Move Up!
Humans, move out of the way. “A factory is a complex and living ecosystem where production systems efficiency is the next frontier over labor productivity.” Smart factories are coming!
No longer, according to the director of digital manufacturing at Capgemini, are “people our most important asset.” By embracing ‘smart factories’ at the expense of the working man, our global economy could be boosted by $2.2 trillion every year by 2023. What are we waiting for?
Countries leading the bionic boom are China (who knew?), South Korea and Japan (of course), Germany (effizienz!), and France (heading the research). In these regions, 67% of over 1,000 surveyed organizations claim to have “ongoing smart factory projects.”
Investors within that 67% will benefit from visible productivity increases and cost efficiencies, which should accelerate as 5G technology comes of age. By increasing factory throughput in a cost-effective way, market players will enjoy more top-line revenues and bottom-line profits on their income statements. Returns on profits reinvested back into businesses will be boosted as well. That should allow stock prices in manufacturers to grow further before dividends are eventually paid to their loyal backers.
For young investors, that’s great. However, it could mean less old codgers finding the income drip they’re looking for. In fact, there are challenges ahead for us all. Smart technology is leapfrogging the low-skilled labor force and demanding more from lab coat-wearing PhD types. Albeit verbosely, the Capgemini report concedes that smart factories’ main challenge is a lack of data readiness and specialist ‘hybrid’ skills in the jobs market!
Time is the healer, but how long will investors have to wait? Could excited stock pickers end up with a net loss for merely being too ahead of their time?