We are on the brink of technological disruption for society and business. Artificial Intelligence is already impacting some service industry sectors such as banking. These changes are “self-initiated” to reduce operating costs and they also accompany recruitment of employees with “new” skills. There is a skills churn happening. It is likely to be the fastest churn we have seen yet, as skills become outdated increasingly quickly by the use of AI. These changes are going to have a major impact on SME manufacturing.
The service sector processes that generate products and services that are of a purely digital nature will be at risk of becoming fully automated, eliminating the need for human integration into the process. We predict greater challenges will come from the unforeseen disrupters that could be swift and overwhelming for many SME businesses.
SME Manufacturing: Rise of the Machines vs Experience Capital
What will be the impacts on SME manufacturing?
Whilst onshore manufacturing in Australia has taken a battering in recent years, niche manufacturers are still able to thrive. The advent of AI could be perhaps far more of a benefit to these SME manufacturers than for service sector businesses. Physical products cannot be substituted easily. Machine learning will bring the opportunity for new manufacturing methods and physical products. There could even be a resurgence of micro-manufacturers.
For many SME manufacturing companies, the shear rate of change ahead seems daunting, as they struggle to keep up with the current digital pace, let alone a pace set by machine algorithms. Many owners are working hard to run their existing business and cannot begin to comprehend what changes lay ahead. How could they, when the experts can’t comprehend it either?
I have no doubt there needs to be a balance between the AI skill set of new employees and more traditional business experience.
Experience is a human condition that is a function of time and exposure to a variety of situations. The more you have of both, the greater the experience capital accumulated.
Blending accumulated Experience Capital and AI is the best route for our SME manufacturers to take to achieve the optimum benefit from changes that are coming.
By following a sound Business Philosophy, looking for AI opportunities will build trust to blend a balance of AI and Experience Capital to achieve an optimal outcome.
If you are an SME manufacturer and would like to review you own business situation in more detail, please call Brendan Barrow on 0401018282 or send an email to brendan@lindfieldpartners.com.au.