8 June 2023 9:15 am

The Industry of the Future & the Future of the Industry

Jul 9, 2017

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Believe in the industry of the Future and the Future of the Industry is a Report to the French Government on the impact of the Fourth World Economic Revolution and is believed to be as relevant to the new Algerian growth model as global geostrategic challenges of 2030 as it is to that of France itself. 
Hoping for a concrete application and meaning for the well-being of Algeria, I have with few experts worked free of charge, on what I was and still am advocating the reasonable solution of deep reforms, as always taking into account the social reality.

Several international media have recently asked me about Algeria and its economic choices that affect its future sustainable growth, taking account all of the geostrategic changes that lie ahead between 2020 and 2030. My reply was that I have discussed the very topic between 2010 and 2016.  Would these be applied by the new Government, I wondered ?

So, instead of indulging in the installation of yet again other commissions or to rush to other expensive consultancies, I would with all due respect recommend to the Government to study so as avoid the mistakes of the past and in order to adapt it to the country’s reality the important and useful white paper titled “Believe in the industry of the future and the future of the industry”; a report addressed to the French Government (2017) in 84 pages based on a survey of French industry leaders.  It is as a matter of fact, the backbone of the economic program of the French president Emmanuel Macron (1).

This report first recalls that industrial history would without doubt that the formalization of the concept of industry of the future was born in Germany under the heading “industry 4.0”as of a will to drive upmarket the German machine tool industry in the face of competition from Asia. But with the gradual rise in power of the processing of industrial data and acceleration of innovations, the concept took a whole other dimension.

Meanwhile, the avalanche of new technologies that occurred in recent years has indeed an important potential for transformation and improvement of the performance of the industry which could make the assumption of re-industrialization of our country credible again.

The goal is to customize mass production that has not yet been reached, the ecosystems that will be the first to provide a “digital continuity” will also be those that help get production that much closer to the final customer.

The report is structured as follows:

Part I – Industry of the future: framing, context and issues

  1. Framing and context
  2. What economic issues?

Part II – The five challenges of the industry of the future:

  1. How to think the transition?
  2. L’ industry of the future must be thought of in terms of performance, not technology.
  3. Do not underestimate the emergency, nor the competitive pressure
  4. Make transformation a matter of skills and organization
  5. Adopt a broader vision of the value chain
  6. Place the internal operational model and the ecosystem management at the heart of transformation plans.

Part III – different degrees of mature businesses: an industry of the future with variable geometry

  1. Introduction and definition of the criteria taken into account
  2. Variable maturities
  3. Putting into the perspective the model

Part IV – threat or opportunity of the industry of the future

  1. What are the prospects for French industry?
  2. The French specificities
  3. What decisions are at stake? –

Conclusion

  1. Business leaders
  2. Public leaders
  3. A shared vision?
  4. Survey methodology and assumptions of the model.

It must be said that the majority of the experts including those of the Economic and Social Council of Algeria use to always say the opposite of what is proposed today by the Government. How then can they be now that credible?

In several of my contributions from several years ago, I drew the attention of the Government that hydrocarbons price will be low and for a long-time; refer my conference before the Prime Minister and the members of the Club of the Pines of Algiers on November 4, 2014, and before the senior executives of the National Security Department on May 15, 2015

I elaborated on the policy of widespread subsidies that together with the current industrial policy could lead Algeria right against a brick wall.  Short of ideas, the country must avoid living on the illusion and outdated patterns of development, such as conventional mechanical industries of which car assembly of very low capacity, highly capital-intensive with Algeria taking on all costs with the rule of 49 / 51% is at the forefront.

Without a serious shift in economic policy, based on good governance and the development of knowledge, Algeria may end up deadlocked by 2018/2020 with the risk of depletion of its foreign exchange reserves when foreign operators, not getting remunerated, may decide to leave it altogether.

As far as the “emergence of an economy” and a globalized product of development of today’s capitalism is concerned, the process is not yet complete, and since the end of the Cold War and the disintegration of the Soviet Union, questioning on the one hand of the ability of nation States to do in the face of these changes.

This is no longer the time where the wealth of a Nation identified with its major firms, large firms having been modelled on military organization and have been described with the same terms: chain of command, job classification, the scope of control with their leaders, operating procedures and standard guidelines.

All jobs were defined in advance by rules and pre-established responsibilities. As in the military hierarchy charts determined internal hierarchies and great importance was attached to the permanence of control, discipline and obedience. This rigour was necessary in order to implement plans with accuracy to benefit from economies of scale in mass production and to ensure strict control of prices in the market.

As in the operation of the army, strategic planning required a decision on where you want to go, followed up by a plan to mobilize the resources and troops to get there. In the totally outdated mechanical era, the production was guided by predetermined objectives and sales by pre-determined quotas. The innovations were not introduced by small progress, but by technological leaps due to the rigidity of the organization.

At the top, large bureaucracies occupied the rectangle of the chart, halfway up middle managers and right at the bottom of the workers. Education, from elementary to upper education through high school, was only a reflection of this process, orders being transmitted by the hierarchy, the schools and universities in large sizes to ensure economies of scale as well.

These analyses have also been widely developed between 2012 and 2017 in the Algerian press and internationally under the titles as shown below.

A new organization is currently taking place showing the limits of the old organization with the emergence of new dynamic sectors in order to adapt to the new global configuration. We are seeing the successive passage of the so-called Taylorism organization marked by integration, the Divisional, matrix organization that are intermediary organizations and finally to the recent organization in networks where the firm focuses its strategic management on three segments: research and development (heart of value added), marketing and communication and under the Treaty all the other components.

And with more and more oligopolistic organizations of a few companies controlling the production, finance and marketing networks are no more national. Even those said small and medium-sized enterprises connected as networks of subcontractors to large ones could be among these.

Jobs in current production tend to disappear involving mobility of workers, the widespread use of temporary employment, and therefore permanent flexibility of the labour market with the permanent recycling training called upon in the future.

Thus, other types of jobs appear including the breakthrough of producers of symbols whose conceptual value is higher than the added value from the classic economies of scale, questioning the ancient theories and economic policies inherited from the mechanical age era like the old political “industrialising industries” based on the model of the old Soviet Union while the 21st century is characterized by the dynamism of large firms but especially those linked in networks to them SMIs/SMEs all devoting a good portion of their budget to research and development.

With the predominance of services that have a more and more merchant character contributing to the increase in the added value, the firm turns into a global network, and it is impossible to distinguish between individuals affected by their activities that as a consequence would be a large, diffuse group, around the world. In this global village, there exist only consumers/producers cross networks.

This will have implications for the future organization at all political, economic and social systems levels.

Finally, this analysis raises the issue of national security. Since 2012, I did not do enough warning the Government on the inconsistency of its policy of subsidies, the inconsistency of its industrial policy and against a policy of hidden import of car assembly plants as well as other industrial segments living off a certain rentier situation.

Two lessons are to be learned.

  • First, the money capital does not create wealth; it is only a means to an end. In fact it’s the work and intelligence that are the source of permanent and sustainable wealth of a Nation.
  • Second, globalization is a reality and time is never caught back in economics. There is an urgent need for a strategic vision as an adaptation to this unstable and turbulent world, a Nation that does not move forward, would necessarily step back.

I would not remind enough that the engine of any development process lies also in research and development and that without the integration of the knowledge economy, no industrial and economic policy would have a future in the 21st century, where technological innovations would inevitably have a constantly changing feature.

Algeria would be best in investing in democratic institutions than in segments where it can temporarily have some comparative advantages: agriculture, tourism major deposit, new technologies and in sub-segments of industrial sectors taking into account the profound technological changes. I would suggest a Monitoring Committee coordinate the investment policy which must synchronize with the dialectical relationship between the complementary roles of the State and the market, put an end to the present distortions which may cause losses, due to lack of visibility and strategic coherence. ademmebtoul@gmail.com

(1) « Croire en l’Industrie du futur et au futur de l’industrie » as translated by “Believe in the industry of the future and the future of the industry” – white paper – report to the French Government – (2017) in 84 pages – A survey of French industry leaders with (1) to Ernst Young by Opinion Way between September and October 2016 directed by Alain Galloni and Olivier Lluansi associate, Ernst & Young Advisor (Paris 2017) . The same report in PDF format is at

http://www.ey.com/Publication/vwLUAssets/ey-resultats-enquete-industrie-du-futur/$FILE/ey-resultats-enquete-industrie-du-futur.pdf

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