'Modest doubt is call'd, the beacon of the wise', Peter Thorne

Manufacturing is changing, not evaporating. And a "productivity explosion" could be about to confound IT's critics.

Cambashi Partner Peter Thorne delivered this assessment at the Cambashi 2002 Seminar on April 23: "It's an upbeat message," he says, and warns UK manufacturing IT suppliers against measuring the health of the engineering sector to predict their own fortunes.

True, the traditionally defined 'manufacturing' sector is in recession. But, "The market for manufacturing solutions extends beyond manufacturing and engineering," he asserts, pointing to the IT and telecommunications manufacturing sector. Equipment manufacture grew from £9bn to £13bn between 1992 and 1999. But value added in the whole sector almost doubled, from £30bn to £55bn, over the same period.

The difference was in the services supplied on top of the equipment: "Business issues, companies, and IT solutions can span the boundary," Thorne told the seminar. "The channels to market are capable of speaking to both equipment and services."

Thorne acknowledges 1980s economist Robert Solow's observation that, "You can see the computer age everywhere but in the productivity statistics." But he counters the widespread scepticism about the benefits of IT: "These productivity explosions are yet to come. We are right on the edge of them."

He cites the work of Paul David, of Stanford and All Souls, and more recent analysis by Nicholas Crafts at the London School of Economics. "Despite use of electricity doubling between 1899 and 1904, the impact on productivity was small. It wasn't until 15 years later, when electricity accounted for half of all industrial power, that productivity surged."

Turning to technologies, Thorne picked out learning points from the experiences of ASP and public exchange providers before looking at web services and the issue of single sign-on. With regard to software product development, Thorne identified the natural evolution of software applications to incorporate higher-level data models to capture more semantics and provide more automation. Coupling this with user demand for step-by-step enhancements allowed Thorne to speculate on the medium-term way forward for software applications - "Some technologists see autonomous software components as the only way to build truly robust systems in the face of the spectacular complexities of an intimately connected supply chain. On the user side, it's certain that companies prefer to avoid 'big-bang', 'bet-the-company' projects. Software components will model higher-level information and provide the type of automation needed to reliably support extended enterprise design and manufacturing functions and interaction".

These components will be deployed on the desktop, in the data centre, or accessed as a utility "according to the user view of where the data should be" asserts Thorne.

"We're possibly at the dawn of a new age," Thorne concludes. "All we need is a latter-day Henry Ford or Alfred Sloan to drive the changes that make the applications do twice what we thought they could."

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