Production of hardware is some R&D, and then actual manufacturing. Production of each physical item costs you. Production of every physical item has a chance to go wrong. Production of each physical item requires a number of humans (often a large number) to do repetitive, high-precision, high-skill work, as fast as practical. You can augment or replace some of them with robots but it also costs you, and you can't replace all the humans with satisfactory results.
So, with hardware, the cost of the workforce plays a major role, while with software it does much less. To produce physical things, you need a lot of people who are not well-off, and for whom factory work is an upgrade of their financial and social standing. A "developing country", with huge swaths of population leaving rural life for a better city life and factory work, is best in this regard. Ideally you sell your product to richer folks, maybe outside the country of production.
Of course there can be situations where the workers are highly paid, and produce very valuable things through their skilled work. Ford in 1950s famously paid the assembly line workers very well, so that they could buy the cars they produce, and valued their employment. But this does not always occur; people doing work that does not add a lot of resale value also want to live well, especially if the society does not want a flood of immigrants who are willing to work for much less. Check out how much the work of a plumber costs in Switzerland. So only high-precision, high-margin, low-volume manufacturing remains in Switzerland, such as precision optics, precision industrial and medical equipment, or premium mechanical Swiss watches. The US is in a somehow similar situation.
>So, with hardware, the cost of the workforce plays a major role, while with software it does much less. To produce physical things, you need a lot of people who are not well-off, and for whom factory work is an upgrade of their financial and social standing. A "developing country", with huge swaths of population leaving rural life for a better city life and factory work, is best in this regard. Ideally you sell your product to richer folks, maybe outside the country of production.
You don't need a lot of people who are not well-off. You can automate the entire process. The problem with automation and labor saving technology is that it is capital intensive. The higher the capital investment per job (higher capital intensity), the bigger the chunk of money that flows to capital rather than labor.
This means that the cost of the workforce in a software company plays a bigger role than in a hardware company, where financing costs to pay for labor saving technology play a bigger role.
There are mining companies in Africa, who have nothing but an army of people equipped with shovels digging a small scale open pit mine. There is no way the labor cost here is the biggest constraint. An excavator and wheel loader could accomplish more with less people, but it would mean getting a USD loan to import foreign equipment and then selling for export to pay the foreign debts, rather than local production.
Auto assembly seems like a poster child. There's wild automation going on, but the typical plant still requires thousands of employees doing things by hand. Musk tried to automate a lot more of this away with newer/better robotics, but failed. (Tesla has still achieved a lot here, but it's been more towards creating designs that are more amenable to the current state of robotics).
IMO, this problem should be solvable now. I.E. we don't need "new physics" to reach another step-function in automation. We need more investment. We're still largely in the mindset of "special-purpose" automation.
> Production of hardware is some R&D, and then actual manufacturing
Totally. And if you think deployment errors are bad, wait until you see how many production errors exist and how many items out of your line come out working and within spec
Also common is to patch around issues, when possible, in firmware. This is often lower cost/effort, but can’t fix everything.
There are similar kinds of fixes for purely mechanical parts. Depending on the part and problem, mechanical can be easier than a PCB rework (eg: modify a part in CAD and 3D print or get your local machine shop to do a run).
I briefly looked at a couple used vehicles just outside of warranty and one within warranty that had literally had two oil changers in 100,000k, that’s 60,000 miles for the uninitiated.
> You cannot release a patch for a mechanical part
It’s just a lot more expensive and labor intensive to apply.
Failing to do so would have meant these manufacturers would go under, (along with their own subcontractors) and once demand shot back up, cars would be literally impossible to manufacture as key suppliers went out of business.
Like, yes, manufacturing's % of US GDP is low (and has been decreasing for a long time) and manufacturing employment is flat or slowly increasing but we're still making a lot of stuff.
[1] https://www.nist.gov/el/applied-economics-office/manufacturi...
[2] https://worldpopulationreview.com/country-rankings/manufactu...
But because productivity is higher https://fred.stlouisfed.org/series/M0100CUSM070NNBR - which doesn’t mean the workers are working harder: a man with a shovel can work as hard as he likes, but he’s never going to compete with the business owner who invested in productivity and gave his worker an excavator.
Therefore employment in the sector is down due to increased productivity, not decreased output.
But increased productivity is a radically different thing from decreased output. A claim that manufacturing should employ more, in the face of increased productivity, That’s a claim that manufacturing should replace other endeavours in the economy which, is a complex claim at the very least.
>A claim that manufacturing should employ more, in the face of increased productivity, That’s a claim that manufacturing should replace other endeavours in the economy which, is a complex claim at the very least.
It is a complex claim but I'll make it really simple. We import most of the things we rely on. Everything from plastic toys to car parts to critical medicines are all imported. Letting yourself become totally dependent on other countries while our STEM grads are underemployed, and would-be manufacturing line workers are forced to do bullshit like driving for Uber, is no way to run a country. It is going to backfire one day unless there is a major reversal in the trend.
The technology has got a shinier interface since I started, but the fundamental problems are the same.
When it breaks, you call the service technician, unless your the one in a thousand employee who happens to be a boilermaker by trade, an IT service technician and software neonate, also handy with a soldering iron, can install and repair refraction systems, work on live mains safely, research and install additional power supply protection devices, lighting suppression, UPS, knows there way around layers 1 through 7…
And that company treated me like I was some kind of freak.
But yeah, generally a laser cutter operator pushes buttons, and empties catch trays if they’re lucky.
Engineers design the things, the operators are largely meat for the grinder.
This is easily confirmed by checking public financials of publicly listed companies. The profit margins are much higher, and the liability is much lower. The only exception is for those hardware manufacturers at the cutting edge whose products cannot be commodified, such as TSMC and ASML and the ilk.
Growth of the software industry isn't constrained by the cost of capital