Sunday, April 4, 2010

Black Swan Approaching

I'm going to pick up on a thread from over at Tam's VFTP about how the US is pushing China to re-value their currency in a way we like.  I'm not going to talk about the hypocrisy of the US telling other people how to manage their economies when ours is a certifiable basket case.  I'm going to point out the error of linear thinking, that we get cheap plastic junk from China, Inc. and we don't make things here.  There is a black swan coming. Since the book by that name, the term "black swan" is used by a lot of people for events that go largely or completely unpredicted and that come along changing everything.  An example might be the 9/11 attacks, or the Christmas tsunami.  You rarely get to see the black swan events before they hit, but this one is 100% predictable.  (BTW, I don't get anything if you click on that link to the book at Amazon or buy it - this blog is entirely self-funded.  No handout cups here). 

The black swan is desktop 3D printing.  See for example a video from Electronic Design magazine.  
from this years' Consumer Electronics Show, about a kit version (2 video parts) or the Rep Rap project for an open source project that has been going for years. 

Right now, you can buy a 3D printer that will make plastic parts in a 4x4x6 envelope for under a k-buck.   High end industrial systems go in tens of k-bucks.  Yeah, for a thousand dollars it's a kit and the only ones playing with them are hardware geeks, but it's entirely open source and that means all the forces that make digital stuff half the price and twice the performance in a couple of years are at play. 

That means that in a few more years, the price will be $500 and the envelope bigger.  That means all the stupid plastic junk that comes from China will be made at your home, cutting out a massive chunk of the trade imbalance.  It will progress from there.  If the TEOTWAWKI doesn't come along and complicate things, I'll guess that by no later than 2020 when you need a toaster or other small home thingy, you'll either download a freeware set of plans or buy the plans like you do other intellectual property, (maybe from an iPrint store - yo Apple, I said it first - I'll sell you the name!) then print it out at home.  Some assembly certainly required. 

Closest thing to a Star Trek replicator on the horizon.

In the meantime, if China were to suddenly shut us off in retaliation, virtually everything is made in the US in some quantity except the cheap crap these printers can make.  (What?  No more bamboo umbrellas for our drinks??)  Heck, there's something like 25,000 people with a home/hobby CNC machine shop that could start a cottage industry making pretty much anything.

And you know what?  Shutting us off may be harder on China than on us.  We lose our source of the bamboo umbrellas in our drinks and plastic crap, but they have millions of people trying to move out of the crushing poverty of subsistence farming in the countryside into the cities.  Get a day job (instead of the life job of subsistence farming).  Enjoy just a touch of western prosperity.  Personally, I have always believed that this phase of cheap products was a stopgap for China; it gets them jobs building things, gives them practice and a place to ship their education, and gets them set for when their great middle class takes over buying their national production.  

As you might gather from my profile, I'm an electrical engineer.  I've worked in the manufacturing sector here in Florida for 35 years, and I'm tired of everyone saying we don't manufacture things in the US.   Yes, our leviathan has taxed the bat crap out of manufacturing and just about driven it all overseas, but there is a lot made in the US.  Electronic systems of all kinds - largely industrial and military for sure, but there is a big, vibrant sector here.  Spend some time at the National Association of Manufacturers and look at their videos from manufacturers all over the US.  

It's not often you see a black swan coming.  Even more rare that you can find one to invest in.  No, I have no connection with these folks or anyone in that business.  My work depends on you flying somewhere for vacation or business or just to go somewhere.

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