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The internet is set to take power to the masses by turning them into manufacturers

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Makers: The New Industrial Revolution

By Chris Anderson,

Random House Business, 272 pages, £20

The internet will drive businesses, innovation and lives all over the world, a keynote speaker said at one of the sessions of the Arab Strategy Forum in Dubai a few years ago.

Although I do not recall the name of the person, I distinctly remember what then he went on to say: “However, it is not only the internet, but the experience it offers to the users that will matter and drive our lives.”

He cited a few examples. “Look at Yahoo and Google and what they do. They unfold the world of knowledge with a click. Your research is done in no time — what used to take months to accomplish. Google Maps and Google Earth present the world in front of our eyes — it shows us everything from road directions to a place, the locality and topography to the daily temperature of a place on a particular day.”

The social media revolution had not started then, although Facebook might have been just around the corner. Then we saw how Facebook and LinkedIn put more than a billion people, or a seventh of mankind, in the social media web within a few years.

It is in the past two decades that the internet has enabled people the most. From paying fees, utility bills, online shopping, making travel arrangements to bidding for tenders, it has changed the way we live and work.

From the computer, the internet has now made it to mobile phones. Now, the mobile phone controls the way we live, work, interact, and everything else.

In the book, “Makers: The New Industrial Revolution”, author Chris Anderson narrates the story of how the whole business world has changed from machine- and tool-based factory settings to the world wide web — the most powerful centre of the new industrial revolution — in a matter of just two generations.

If the first two industrial revolutions had been about machines, tools, factories and manufacturing, this one is about information — the spread of information technology that has given everyone access to almost everything.

The story revolves around Anderson’s own experiences — starting with the story of how his grandfather Fred Hauser, a Swiss immigrant in the United States, turned the garage of his California home into a fertile ground of experimentation and invention. He eventually patented a few products in his name, including the automatic sprinkler system, but due to the lack of entrepreneurial zeal or capital, he could not develop industries. Those who bought his patents made millions while he had to make do with modest royalties.

The owners of the means of production get to decide what is produced.

If Fred Hauser were born in 1998, not 1898, he would still have his workshop, tinkering with nature and his bountiful ideas. “The only thing that would have changed in his converted garage is the addition of a computer and an internet connection. But what a change!” writes Anderson, bringing readers up to speed with the present challenges.

“The past ten years have been about discovering new ways to create, invent, and work together on the web. The next ten years will be about applying those lessons to the real world.”

Those who want to know about the economy, business, debt, deficit finance, recession and why jobs are hard to come by, should read it. It explains everything in layman’s terms.

The book makes those issues so easy to understand and appealing that once readers reach the end of the 250-page monologue, they would have understood the real problems faced by the United States and the European countries without having to attend any economics classes or lectures by politicians.

Growth comes from improved productivity, by getting more output per worker. In other words, the most efficient companies hire the least. So, increased productivity and profitability comes with a price — job loss.

“Although factory output is still rising in such countries as the United States and Germany, factory jobs as a percentage of the overall workforce are at an all-time low,” Anderson writes.

Describing the present internet-driven economy as the Maker Movement, Anderson says automation is here to stay and companies will continue to increase productivity to remain profitable and sustainable. However, the role of small businesses — that hold the key to economic growth — will have to change. They will have to be both small in size and global in outlook and presence — high-tech and low-cost, and starting small and getting big.

Anderson broadly divides the global economy into atoms and bits — the hardware or the real economy and the software or the digital economy respectively.

However, the web economy is still relatively small in size compared with the real economy — about 10 per cent. This economy represents $20 trillion (Dh73 trillion) of revenues compared with the $130 trillion that comes from the economy beyond the web, according to Citibank and Oxford Economics.

In the next few decades, how this ratio changes remains to be seen. However, as web democratises information and ideas for greater collaboration, its growth is accelerating. Facebook is a very good example of how it is changing lives and businesses.

Fred Hauser could not become an industrialist with his invention despite having patented it in his name. Why? He was an inventor and not an entrepreneur. He did not possess the capital, resources or power. As Karl Marx put it, power belongs to those who control the means of production.

However, the internet has changed everything.

“The beauty of the web is that it democratised the tools both of invention and of production,” Anderson writes. “There are thousands of entrepreneurs emerging today from the Maker Movement who are industrialising the do-it-yourself (D-I-Y) spirit.

“If you do something, video it … post it … promote it.” Then comes collaboration — online ventures that are pushing the growth of the Maker Movement.

What Fred Hauser could not achieve 70 years ago, Mark Zuckerberg — a 27-year-old dropout did. The world is no long the same.

However, the digital explosion was largely limited to the screens. “We are surrounded by physical goods, most of them products of the manufacturing economy that over the past century has been transformed in all ways … Because of the expertise, equipment and cost of producing things on a large scale, manufacturing has been mostly the provenance of big companies and trained professionals.”

But that is about to change with the new revolution — the Maker Movement.

“Would-be entrepreneurs and inventors are no longer at the mercy of large companies to manufacture their ideas,” Anderson says.

The rise of the “Open Hardware” — another part of the Maker Movement — is now doing for physical goods what open source did for software, enabling online communities of programmers to create the Linux operating system and Firefox web browser.

What started as a cultural shift — a fascination with turning new digital prototyping tool into real-world impact — is now starting to become an economic shift. The Maker Movement is beginning to change the face of industry as entrepreneurial instincts kick in and hobbies become small businesses.

“Makers” is a must-read for those who want to understand the changes taking place in the global economy and how the future is shaping up, slowly but surely. If you want to know the future of global economy now — including the history of future — then this is the book you should read.