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Luddites Redux?

By Ben Rand

Over the last few years, there has been a growing debate about whether technology is “destroying” jobs, particularly in the manufacturing sector. In 2011, two MIT professors published Race Against the Machine, suggesting that new digital technologies were reducing the demand for human workers, perhaps permanently. This debate seems particularly topical with the recent grand opening of Buffalo Manufacturing Works, the high-tech Buffalo Billion initiative bringing cutting-edge manufacturing technologies and know-how to our area, including robotics. Will these technologies cost us manufacturing jobs?

Fear about new technologies destroying jobs is not new. It dates back to 1779 and the dawn of the Industrial Revolution when an Englishman named Ned Ludd supposedly broke textile equipment, presumably to protect his job. This act may have given rise to the Luddites, English textile artisans who protested against power looms and other machines in the early 1800s. While the new technology may have cost these artisans their jobs, it also dramatically reduced the cost of fabrics, leading to a boom in fabric sales. This increase in demand caused the number of weavers (i.e., loom operators) to grow dramatically throughout the century, even though the labor required fell by 98% over that same period.

A similar thing happened in the early 1900s when Henry Ford introduced new technologies such as the assembly line into the fledgling automotive industry. These technologies helped Ford lower the amount of time and labor it took to manufacture his cars from 12 hours to 90 minutes. Fewer labor hours per car meant each car cost less to build. Ford passed some of those savings along to consumers in the form of lower prices. A Model-T, which originally cost $950 in 1908, ultimately dropped to under $300. Lower prices again sparked a boom in demand that saw Ford’s sales increase by an order of magnitude. That led to more hiring, culminating in Ford’s famous “$5 Day” offer in 1914, which effectively doubled the previous average manufacturing wage. Now Ford’s own workers could afford a Model-T. The modern middle class was born and, by the way, Ford’s sales went up. Again.

Clearly, new technologies can destroy certain jobs: textile artisans lost out to loom operators and skilled car mechanics were replaced by the assembly line’s division of labor. In the future, driver-less cars could put bus drivers, truckers and taxi drivers out of business. But if new technologies spark demand by lowering prices or meeting unmet needs, then other new jobs or even new industries are likely to be created.

What is not open for debate is the fact that new technologies are coming. The companies that embrace and successfully deploy technology to make their products better, faster and/or cheaper will create a competitive advantage for themselves. This has been a simple, immutable truth of manufacturing since the Industrial Revolution. Now, with Buffalo Manufacturing Works in our own backyard, WNY manufacturers have a unique opportunity to take advantage of technology with a minimum of risk, a minimum of cost and a minimum of uncertainty. Don’t be a Luddite. Embrace technology, embrace Buffalo Manufacturing Works and watch what happens to your business and WNY manufacturing.