Change is everywhere. The rate of change in technology is astounding. Part of that change is also how the cost of technology is changing, because that impacts the rate of adoption of technology. As cell phones, pad and tablet computers, and net books continue to drive down the price of interconnection, how does it change our lives? Are we increasing our quality of life by greater productivity, or are we simply spending more time with tasks that have little importance to living life.
While semiconductor technology follows a declining cost per unit with increasing volume, this is not true of all markets. Yet it seems that costs are being reduced in many markets, possibly in response to global competition. We can’t continue to compete strictly on price when labor costs in some markets may be 10 times lower than costs in the US. Interestingly, the cost of transportation seems to be declining in spite of high oil prices. Ocean and rail transportation are extremely cost effective and many products can be shipped from Asia to the US at very low prices.
And as a secondary issue, how our currency is doing in the context of the world economy has some impact as well. Devaluation of the dollar makes our goods and services cheaper to prospective customers around the world, and increases the cost of gasoline (for example) without any impact from the direct supply and demand related to the product. In fact, recent declines in gasoline consumption are the only thing holding gasoline prices down at all, as the dollar price for crude oil is soaring again.
The interesting thing about the price of gasoline was the comment from some politicians that $4 to $5 per gallon gasoline as a bargain, and how high gasoline prices would stimulate sales of electric cars. Personally, I find this kind of comment a bit scary. It would seem that people who make this kind of comment aren’t affected by gasoline prices. The rest of us are.
The tools of engineering are undergoing similar changes. Not only the design technology, but also the means of production itself. As 3D solid modeling becomes increasingly powerful, and combined with 3D printer technology that is available for around $1500, the threshold cost to innovation has been substantially reduced.
Change is all around us. There are two keys elements to consider: how do we navigate the sea of change, and what new opportunities will it bring?