From 'it to bit': 3D printing, the approaching intellectual revolution and marketing

It’s not clear who first coined the phrase, “If you aren’t paying for a product, you are the product” [The consensus points to this MetaFilter comment. -Ed]. But it clearly applies most appropriately to Facebook.

This year, the company is on track to achieve revenues north of $6 billion dollars, all on the back of the data that its users contribute for free. In his new book Who owns the future?, virtual-reality pioneer Jaron Lanier paints the picture of a dystopian future in which everyone has access to free or cheap goods and services but not to jobs. Wealth and employment will be concentrated in the hands of the high priests of technology, such as Google, Amazon and Facebook. They are the new landowners and industrialists, who don’t exploit our labour to get rich, but our data—which they get for free.

Lanier’s answer to this imbalance is a micropayment distribution system, in which every piece of data contains data on its origins, and every time the data is used in a commercial transaction (such as targeting a Facebook ad), the data contributor is paid a small fee. Lanier’s ideas are, however, neither new nor practical. Ted Nelson, the sociologist who coined the term hypertext in the 1960s, has been working on Project Xanadu for nearly 40 years. Two decades before the Web was invented at CERN by Tim Berners-Lee, Nelson envisaged an interconnected universe of data in which everyone is a publisher, but one with version control, the ability to trace all documents back to their source, and a micropayment/royalty scheme to encourage other people’s work to be quoted, used and redistributed. With some financial backing from Autodesk, Nelson did manage to a release a version of Xanadu in the late 1980s, but the Web soon killed any commercial future for the project. There is simply not space in the world for two parallel webs.

On one level, both Lanier and Nelson have a point. The system isn’t fairly rewarding people for the value they create. At Facebook, roughly 5,000 people write code, maintain servers and manage the business. But its 900 million users do most of the work inputting the data that make the company worth $65 billion—more than China Mobile, Toyota, Samsung and the Commonwealth Bank of Australia. At its peak, Kodak employed 140,000 people; Facebook bought Instagram, a company of 13 people, for $1 billion last year. Again, it is Instagram’s users who create the real value, and they’re paid with a free app. Instagram’s value lies in the redistribution of its users’ content.

John Merakovsky is managing director for Experian Marketing Services in Asia-Pacific.

We should, however, pause for a reality check. The effects of industrial revolutions aren’t simply to produce a new class of robber barons. We all have something to gain. The first industrial revolution, which began with the spinning jenny in 1776, changed the world in many ways. One of its most profound impacts is the doubling of human life span, at least in developed countries.

The second revolution (digital) in fact had its earliest origins in 1671 when the mathematician Leibniz designed a machine that could perform all four mathematical operations simultaneously. But it was the threat of Nazi Germany that brought the digital revolution to life, documented in George Freeman’s book Turing’s Cathedral. Inspired by the abstract ideas of Alan Turing, whose work enabled Britain to crack the Nazi Enigma code, John von Neuman (himself an exile of Nazi persecution) led a team of scientists and engineers who built the first modern computer in the late 1940s. His breakthrough idea was to have a machine where both data and the instructions for manipulating the data could be stored in the same place using a common binary language (first envisaged by Leibniz). This concept of a stored program is the basis of every computer in the world today.

The digital world was democratized by the web; and it has given the billions of us with Internet access the potential to reach 7 billion people. In parallel to the digital revolution, globalization has resulted in the migration of manufacturing to low-cost labour sources, mostly in the east. In the process, it has transformed Western economies from agricultural and manufacturing, to design, intellectual property and service industries.

There are signs that another revolution is coming, and it promises to bring an entirely different world envisaged by Lanier. The physicist John Wheeler once said that the essence of the universe could be boiled down to the phrase "it from bit". In other words, this is the creation of matter from information. And that is the basis of our third industrial revolution—digital manufacturing, which combines the power of the first two revolutions.

In next few years, mainstream 3-D printers will be sold in their millions once HP, Canon and Epson enter the market. Manufacturing will go desktop. This doesn’t mean large-scale production in Chinese factories will cease, but there are many advantages to digital manufacturing. Designers will be able to make their own products, without having to tie up their cash in factory production. Manufacturing will be local, which means faster and more cost-effective. The time from design to production will be dramatically reduced, which will power faster innovation. Products will be much more readily customized, and production runs much more flexible. 3-D printing will bring automated processes and quality to the smallest batches.

Small entrepreneurs will not have to rely on manufacturing in China to be competitive. Local factories, powered by 3-D printers and cheap factory robots, will run in the dark, 24/7, closer to the designers. Low-cost labour will cease to be a differentiator.

All differentiation will be intellectual in nature—ideas, science, design and marketing. Without price as a differentiator, this technological shift will mean an even more strategic role for marketing. Whilst design will continue to address the functional positioning of products and services, companies that fall behind in their symbolic (brand) and experiential positioning will fail. Companies that fail to implement CRMs and cross-channel platforms that truly enable one-to-one targeted and real-time marketing will lose their customers to savvier competitors. Those who implement a holistic brand experience coupled with programmatic marketing campaigns informed by the best analytic models will be best positioned to win.

The other change ushered in by this technological shift is the re-emergence of local as a major differentiator. Much like the ecological niches opened up for small furry mammals by the asteroid-driven demise of the dinosaurs, this third industrial revolution will open niches for innovative local businesses that embrace the power of both manufacturing and marketing technologies.

To succeed in this new world, we will more than ever need to invest in the education of our children. The future prosperity of families, companies, and nation-states will be dependent on a healthy symbiosis between human and machine, but one which we still control.

I don’t subscribe to Lanier’s new world vision. But the next time you use GPS for directions to a place you’ve driven before, or Google a fact you really should already know, consider this question from George Freeman: "What if the price of machines that think is people who don't?"

Main image: Screenshot of 3D-printed jewelery by Virtox taken from MixeeLabs.