Software is eating manufacturing right in front of us.
One of the simpler stories we tell about the global economy involves still-industrializing markets taking over much of the world’s manufacturing, while advanced economies provide the design, software architecture and innovation. It’s a useful framework, but it doesn’t take into account innovation coming from emerging markets, and perhaps more importantly, it doesn’t account for the ways that making software can help make physical things.
Marc Andreessen, internet investor and visionary, says that software is eating the world, and while his investment advice doesn’t always make a ton of sense, he has a point about the way the economy is changing. One piece of evidence is the decision by Siemens, the German industrial giant, to open a factory in North Carolina last year to manufacture gas turbines for power plants. While there were lots of reasons to do this, including investments in local infrastructure and sales financing from the US Export-Import Bank, another reason is the highly skilled workers clustered around the state’s “research triangle” of universities and high-tech industry.