The next manufacturing revolution is here | Olivier Scalabre

499,770 views ・ 2016-09-13

TED


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00:13
Guys, we have an issue.
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(Laughter)
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Growth is fading away, and it's a big deal.
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Our global economy stops growing.
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And it's not new.
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Growth has actually declined for the last 50 years.
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If we continue like this, we need to learn
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how to live in a world with no growth in the next decade.
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This is scary because when the economy doesn't grow,
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our children don't get better lives.
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What's even scarier is that when the pie does not grow,
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each of us get a smaller piece.
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We're then ready to fight for a bigger one.
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This creates tensions and serious conflicts.
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Growth matters a lot.
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If we look at the history of growth,
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times of big growth have always been fueled
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by big manufacturing revolutions.
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It happened three times, every 50-60 years.
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The steam engine in the middle of the 19th century,
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the mass-production model in the beginning of the 20th century --
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thanks, Mr. Ford.
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And the first automation wave in the 1970s.
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Why did these manufacturing revolutions
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create huge growth in our economies?
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Because they have injected huge productivity improvement.
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It's rather simple:
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in order to grow, you need to be producing more,
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putting more into our economy.
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This means either more labor or more capital or more productivity.
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Each time, productivity has been the growth lever.
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I'm here today to tell you
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that we are on the verge of another huge change,
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and that this change, surprisingly enough,
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is going to come from manufacturing, again.
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It will get us out of our growth slump
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and it will change radically the way globalization has been shaped
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over the last decade.
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I'm here to tell you about the amazing fourth manufacturing revolution
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that is currently underway.
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It's not as if we've done nothing with manufacturing
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since the last revolution.
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Actually, we've made some pretty lame attempts
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to try to revitalize it.
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But none of them have been the big overhaul
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we really need to get us growing again.
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For example, we've tried to relocate our factories offshore
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in order to reduce cost and take advantage of cheap labor.
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Not only did this not inspire productivity,
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but it only saved money for a short period of time,
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because cheap labor didn't stay cheap for long.
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Then, we've tried to make our factories larger
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and we specialized them by product.
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The idea was that we can make a lot of one product
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and stockpile it to be sold with demand.
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This did help productivity for a while.
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But it introduced a lot of rigidities in our supply chain.
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Let's take fashion retail.
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Traditional clothing companies
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have built offshore, global, rigid supply chains.
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When fast-fashion competitors like Zara
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started replenishing their stocks faster
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from two collections a year to one collection a month,
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none of them have been able to keep up with the pace.
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Most of them are in great difficulties today.
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Yet, with all of their shortcomings,
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those are the factories we know today.
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When you open the doors,
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they look the same as they did 50 years ago.
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We've just changed the location, the size, the way they operate.
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Can you name anything else that looks the same
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as it did 50 years ago?
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It's crazy.
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We've made all the tweaks to the model that we could,
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and now we hit its limits.
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After all of our attempts to fix the manufacturing model failed,
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we thought growth could come from elsewhere.
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We turned to the tech sector --
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there's been quite a lot of innovations there.
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Just to name one: the Internet.
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We hoped it could produce growth.
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And indeed, it changed our lives.
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It made big waves in the media, the service, the entertainment spaces.
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But it hasn't done much for productivity.
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Actually, what's surprising is that productivity is on the decline
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despite all of those innovation efforts.
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Imagine that -- sitting at work, scrolling through Facebook,
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watching videos on YouTube has made us less productive.
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Weird.
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(Laughter)
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This is why we are not growing.
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We failed at reinventing the manufacturing space,
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and large technological innovations have played away from it.
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But what if we could combine those forces?
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What if the existing manufacturing and large technological innovation
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came together to create the next big manufacturing reinvention.
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Bingo!
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This is the fourth manufacturing revolution,
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and it's happening right now.
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Major technologies are entering the manufacturing space,
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big time.
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They will boost industrial productivity by more than a third.
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This is massive, and it will do a lot in creating growth.
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Let me tell you about some of them.
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Have you already met advanced manufacturing robots?
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They are the size of humans,
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they actually collaborate with them,
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and they can be programmed
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in order to perform complex, non-repetitive tasks.
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Today in our factories, only 8 percent of the tasks are automated.
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The less complex, the more repetitive ones.
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It will be 25 percent in 10 years.
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It means that by 2025,
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advanced robots will complement workers
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to be, together, 20 percent more productive,
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to manufacture 20 percent more outputs,
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to achieve 20 percent additional growth.
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This isn't some fancy, futuristic idea.
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These robots are working for us right now.
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Last year in the US, they helped Amazon prepare and ship all the products
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required for Cyber Monday,
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the annual peak of online retail.
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Last year in the US,
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it was the biggest online shopping day of the year and of history.
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Consumers spent 3 billion dollars on electronics that day.
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That's real economic growth.
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Then there's additive manufacturing, 3D printing.
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3D printing has already improved plastic manufacturing
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and it's now making its way through metal.
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Those are not small industries.
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Plastic and metals represent 25 percent
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of global manufacturing production.
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Let's take a real example.
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In the aerospace industry,
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fuel nozzles are some of the most complex parts to manufacture,
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for one reason:
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they are made up of 20 different parts
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that need to be separately produced
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and then painstakingly assembled.
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Aerospace companies are now using 3D printing,
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which allows them to turn those 20 different parts
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into just one.
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The results?
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40 percent more productivity,
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40 percent more output produced, 40 percent more growth
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for this specific industry.
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But actually, the most exciting part of this new manufacturing revolution
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goes much beyond productivity.
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It's about producing better, smarter products.
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It's about scale customization.
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Imagine a world where you can buy the exact products you want
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with the functionalities you need,
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with the design you want,
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with the same cost and lead time
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as a product that's been mass produced,
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like your car, or your clothes or your cell phone.
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The new manufacturing revolution makes it possible.
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Advanced robots can be programmed
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in order to perform any product configuration
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without any setup time or ramp up.
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3D printers instantaneously produce any customized design.
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We are now able to produce a batch of one product, your product,
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at the same cost and lead time as a batch of many.
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Those are only a few examples of the manufacturing revolution at play.
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Not only will manufacturing become more productive,
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it will also become more flexible,
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and those were exactly the elements of growth that we are missing.
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But actually, there are even some bigger implications
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for all of us when manufacturing will find its way back into the limelight.
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It will create a huge macroeconomic shift.
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First, our factories will be relocated into our home markets.
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In the world of scale customization,
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consumer proximity is the new norm.
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Then, our factories will be smaller, agile.
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Scale does not matter anymore, flexibility does.
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They will be operating on a multi-product, made-to-order basis.
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The change will be drastic.
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Globalization will enter a new era.
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The East-to-West trade flows
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will be replaced by regional trade flows.
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East for East, West for West.
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When you think about that,
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the old model was pretty much insane.
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Piling up stocks, making products travel the whole world
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before they reach their end consumers.
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The new model, producing just next to the consumer market,
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will be much cleaner, much better for our environment.
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In mature economies, manufacturing will be back home,
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creating more employment,
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more productivity and more growth.
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Good news, isn't it?
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But here's the thing with growth --
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it does not come automatically.
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Mature economies will have to seize it.
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We'll have to massively re-train our workforce.
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In most countries, like in my country, France,
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we've told our children that manufacturing had no future.
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That it was something happening far away.
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We need to reverse that
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and teach manufacturing again at university.
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Only the countries that will boldly transform
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will be able to seize this growth.
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It's also a chance for developing economies.
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Of course China and other emerging economies
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won't be the factory of the world anymore.
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Actually, it was not a sustainable model in the long term,
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as those countries are becoming richer.
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Last year, it was already as expensive to produce in Brazil
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as to produce in France.
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By 2018, manufacturing costs in China will be on par with the US.
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The new manufacturing revolution
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will accelerate the transition of those emerging economies
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towards a model driven by domestic consumption.
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And this is good,
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because this is where growth will be created.
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In the next five years,
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the next billion consumers in China will inject more growth in our economies
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than the top five European markets together.
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This fourth manufacturing revolution is a chance for all of us.
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If we play it right,
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we'll see sustainable growth in all of our economies.
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This means more wealth distributed to all of us
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and a better future for our children.
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Thank you.
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(Applause)
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