There is great concern about China’s real-estate and infrastructure bubbles. But these are just short-term challenges that China may be able to spend its way out of. The real threat to China’s economy is bigger and longer term: its manufacturing bubble.
By offering subsidies, cheap labor, and lax regulations and rigging its currency, China was able to seduce American companies to relocate their manufacturing operations there. Millions of American jobs moved to China, and manufacturing became the underpinning of China’s growth and prosperity. But rising labor costs, concerns over government-sponsored I.P. theft, and production time lags are already causing companies such as Dow Chemicals, Caterpillar, GE, and Ford to start moving some manufacturing back to the U.S. from China. Google recently announced that its Nexus Q streaming media player would be made in the U.S., and this put pressure on Apple to start following suit.
But rising costs and political pressure aren’t what’s going to rapidly change the equation. The disruption will come from a set of technologies that are advancing at exponential rates and converging.
These technologies include robotics, artificial intelligence (AI), 3D printing, and nanotechnology. These have been moving slowly so far, but are now beginning to advance exponentially just as computing does. Witness how computing has advanced to the point at which the smart phones we carry in our pockets have more processing power than the super computers of the ’60s—and how the Internet, which also has its origins in the ’60s, went on an exponential growth path about 15 years ago and rapidly changed the way we work, shop, and communicate. That’s what lies ahead for these new technologies.
The robots of today aren’t the Androids or Cylons that we used to see in science-fiction movies, but specialized electro-mechanical devices that are controlled by software and remote controls. As computers become more powerful, so do the abilities of these devices. Robots are now capable of performing surgery, milking cows, doing military reconnaissance and combat, and flying fighter jets. And DIY’ers are lending a helping hand. There are dozens of startups, such as Willow Garage, iRobot, and 9th Sense, selling robot-development kits for university students and open-source communities. They are creating ever more-sophisticated robots and new applications for these. Watch this video of the autonomous flying robots that University of Pennsylvania professor Vijay Kumar created with his students, for example.... MUCH MORE
*Here is his Dec. 29, 1959 speech to the American Physical Society:
I imagine experimental physicists must often look with envy at men like Kamerlingh Onnes, who discovered a field like low temperature, which seems to be bottomless and in which one can go down and down. Such a man is then a leader and has some temporary monopoly in a scientific adventure. Percy Bridgman, in designing a way to obtain higher pressures, opened up another new field and was able to move into it and to lead us all along. The development of ever higher vacuum was a continuing development of the same kind.
I would like to describe a field, in which little has been done, but in which an enormous amount can be done in principle. This field is not quite the same as the others in that it will not tell us much of fundamental physics (in the sense of, "What are the strange particles?") but it is more like solid-state physics in the sense that it might tell us much of great interest about the strange phenomena that occur in complex situations. Furthermore, a point that is most important is that it would have an enormous number of technical applications.
What I want to talk about is the problem of manipulating and controlling things on a small scale.
As soon as I mention this, people tell me about miniaturization, and how far it has progressed today. They tell me about electric motors that are the size of the nail on your small finger. And there is a device on the market, they tell me, by which you can write the Lord's Prayer on the head of a pin. But that's nothing; that's the most primitive, halting step in the direction I intend to discuss. It is a staggeringly small world that is below. In the year 2000, when they look back at this age, they will wonder why it was not until the year 1960 that anybody began seriously to move in this direction.
Why cannot we write the entire 24 volumes of the Encyclopaedia Brittanica on the head of a pin?
Let's see what would be involved. The head of a pin is a sixteenth of an inch across. If you magnify it by 25,000 diameters, the area of the head of the pin is then equal to the area of all the pages of the Encyclopaedia Brittanica. Therefore, all it is necessary to do is to reduce in size all the writing in the Encyclopaedia by 25,000 times. Is that possible? The resolving power of the eye is about 1/120 of an inch – that is roughly the diameter of one of the little dots on the fine half-tone reproductions in the Encyclopaedia. This, when you demagnify it by 25,000 times, is still 80 angstroms in diameter – 32 atoms across, in an ordinary metal. In other words, one of those dots still would contain in its area 1,000 atoms. So, each dot can easily be adjusted in size as required by the photoengraving, and there is no question that there is enough room on the head of a pin to put all of the Encyclopaedia Brittanica.
Furthermore, it can be read if it is so written. Let's imagine that it is written in raised letters of metal; that is, where the black is in the Encyclopedia, we have raised letters of metal that are actually 1/25,000 of their ordinary size. How would we read it?...MORE