I recently traveled to Suzhou, China to attend Advantech’s IoT Co-Creation Summit. The trip was my first to the People’s Republic, and exposed me to several cultural nuances. The most obvious of these was employment.

In Suzhou and Shanghai, it appeared that everyone has a job. The official Chinese unemployment rate stands at 3.95 percent as of October 2017, so that’s of course not true. But consider that Suzhou, just a farming community on the southern floodplains of the Yangtze River at the turn of the century, is now home to more than 6.5 million people and dozens upon dozens (upon dozens) of skyscrapers.

For some perspective, that would make Suzhou the fifth- or sixth-most-populated metropolitan area in the U.S. There, workers sweep public areas with brooms made of thatch, while others in waterproof boots fish litter out of streams and canals. At the Shanghai Pudong Airport, every single parking kiosk is staffed with an attendant.

MAGA and the price of rice in China

In an economy based on communism it’s essential that everyone, or almost everyone, has a job. So although Westerners may not be accustomed to this mindset, the Chinese are just as apprehensive of U.S. economic policies as we are of initiatives like Made in China 2025. So much so, in fact, that  Chaney Ho, Executive Director of the Board at Advantech, presented on the topic at the Summit (in English and, I assume, separately in Chinese).

As the world’s leading manufacturer, China’s industrial manufacturing sector accounted for roughly 40 percent of the country’s GDP in 2015. It should therefore come as no surprise that the Trump administration’s “America First” edict presents a direct threat to their goal of becoming the world’s largest economy. In addition to trade tariffs, Trump plans to invest $115 billion in smart manufacturing and another $40 billion in vocational training, which he estimates will generate an extra $500 billion in GDP and close the manufacturing gap with China in two years.

Thanks to tax incentives, Chinese companies like Fuyao Glass and CRRC Corp. are now investing billions in manufacturing facilities in the U.S. Western-led globalization helped establish China as a dominant manufacturing center, and now a wave of Western-led nationalism may dismantle it.

Industry 4.0: Volume production to mass customization

Another factor working against China’s traditional manufacturing prominence is the emergence of Industry 4.0 and the IoT. These technologies correlate beautifully with de-centralized manufacturing, as intelligent factories distributed in the most sensible geographic regions can still be connected and make collective decisions.

Rather than volume production, these more specialized, interconnected factories can focus on mass customization and on-demand manufacturing to better satisfy market needs. Of course, such facilities require enabling technologies that can be deployed, updated, and modified quickly and at scale.

As it turns out, this is a somewhat complicated ask. Especially for regulated and safety-critical industries like manufacturing, speed and agility can do more harm than good.

Co-creating Industry 4.0 and de-centralized manufacturing

In response, Advantech has developed an enablement strategy called “IoT Co-Creation” that addresses the requirements of distributed manufacturing. The technical approach of Co-Creation is based on technology components like Advantech’s WISE-PaaS middleware and embedded systems and modules, which the company then integrates into “Solution-Ready Packages” tailored for specific industries or applications.

The intent of an SRP is not to provide a complete system, but rather offer building blocks upon which organizations can innovate. In an industrial manufacturing context, for example, an IEC 61131-3-compliant equipment connectivity SRP enables real-time data acquisition, visualization, and machine control. The solution comes with all the requisite hardware, a Microsoft Windows 7 operating system, and the CODESYS runtime environment. As shown in the previous figure, Advantech is also developing industry-specific cloud infrastructure.

Users “co-create” by applying domain expertise, programming skills, and additional hardware components to build products more quickly because the infrastructure design has been abstracted away. This partnership enables co-creators to add more value around their core competencies, which, in a way, is its own type of “distributed manufacturing.”

SRPs are already in production for factory, retail, healthcare, logistics, smart city, energy, and other environments.

Back to employment

The concept of de-centralized manufacturing is still fledgling, but has economic and technical merit. Where that would leave China’s workforce, I don’t know. Perhaps the Chinese could emigrate to these distributed manufacturing centers, populate foreign lands, enhance our cultures with their influence, and soften the divides between East and West.

Or, perhaps, all of this would lead to more polarizing nationalism. Food for thought.

In the meantime, view below to find out how Advantech executives feel about other industry megatrends. Linda Tsai, President of the company’s Industrial IoT business discusses Moore’s Law, the engineering workforce, and other topics, while Miller Chang, President of Embedded IoT at Advantech reveals how real artificial intelligence (AI) already is.