domingo, abril 22, 2012

VACACIONES GONZALORAFFOINFONEWS.COM MAYO 2012

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VACACIONES MAYO 2012

Abril 21, 2012
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Queridos amigos,


Les escribo para informarlos que estaré dos semanas de vacaciones a partir del próximo lunes 30 de abril. Por lo tanto, tendré acceso limitado a mis correos y al Internet. Estaré nuevamente de regreso a su gentil disposición a partir del miércoles 16 de Mayo próximo.


Lamentablemente, nada ha cambiado en el panorama económico global desde mi última carta de marzo pasado (ver aquí).


Excepto quizás, habría que resaltar que el trillón de euros (US$1.3 trillones aprox.) de papel moneda sin respaldo, inyectados por el Banco Central Europeo en Diciembre y Marzo pasados, otorgando financiamiento y liquidez ilimitadas al sistema bancario europeo a un plazo de hasta tres años, a una tasa de interés obviamente negativa, evitó transitoriamente el costo inmediato de un ajuste caótico y descontrolado en los dos últimos trimestres.


Pero no ha tenido el efecto esperado por mucho tiempo. Más aun, las tasas de interés de España, Portugal e Italia, especialmente, ya han comenzado a elevarse otra vez.


Recientemente, en España acaban de romper nuevamente la barrera del 6% en la última emisión de deuda, ni siquiera 60 días después de la última inyección del Banco Central Europeo.


Estos costos son insostenibles para mantener el servicio de la deuda de los gobiernos en el mediano y largo plazo y no evitarán el "default" ni la quiebra financiera de estos países.


Este escenario también nos demuestra la poca o nula credibilidad actual de los mercados financieros y los inversionistas en las políticas fiscales, monetarias y económicas de los bancos centrales y los gobiernos del mundo desarrollado.


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Finalmente así, ello obligaría a todo el sistema financiero y bancario internacional al gran ajuste que se viene difiriendo desde el 2008. Y con ello, se podría producir el temido dominó, que los arrastrará a todos, ó a casi todos, a una restructuración.


Todo esto tendrá obviamente consecuencias políticas, económicas y sociales enormes, que son cada vez más impredecibles. Mas aún, si tenemos en cuenta la burbuja financiera y económica adicional, alimentada a partir del 2008 y sostenida por los cuatro trillones de dólares adicionales de papel moneda sin respaldo, que se calcula han sido emitidos e inyectados a los mercados financieros, tanto por la Reserva Federal Norteamericana como por el Banco Central Europeo, en los últimos 4 años.


En vista de las próximas elecciones este año en los Estados Unidos de Norteamérica, Europa, China, Francia, entre otros, no tenemos esperanza que se produzcan cambios importantes en el "statu quo".


Es ya obvio que los gobiernos mas importantes del mundo y sus elites, aun no encuentran ni el liderazgo, ni la visión, ni la determinación, ni la convicción, para llevar a cabo los ajustes fiscales y económicos necesarios e indispensables para corregir el rumbo e iniciar el camino de producir un crecimiento económico real y sostenible a mediano y largo plazo. Para que el necesario ajuste sea posible, al mismo tiempo habría que dictar políticas fiscales y monetarias de promoción de la inversión productiva y del empleo, haciendo el ajuste viable socialmente en el corto plazo.


Los analistas y economistas mas prestigiados ya están especulando nuevamente sobre las inevitables futuras emisiones de papel moneda sin respaldo (QE3, QE4, etc.), en un esfuerzo desesperado de las elites por seguir difiriendo el costo económico y político de los ajustes, manteniendo los precios de los activos financieros en niveles artificiales, mientras sea posible.


A pesar de todo ello, la bolsa norteamericana aún no recupera el nivel máximo nominal alcanzado en el 2008, antes que reventara la burbuja inmobiliaria; ni la bolsa peruana tampoco. No hay mas que compararlas con el precio de una onza de oro en el 2008 y el precio actual alrededor de US$1650/oz., una moneda dura y real, para ver como han perdido una gran parte de su valor real, es decir, de su poder adquisitivo.


La pregunta que ya nos hicimos anteriormente y que nos tenemos que hacer nuevamente ahora, es:


De mantenerse este curso equivocado, ¿por cuánto tiempo más podrán seguir los mercados y las sociedades involucradas, soportando y aceptando sin rebelarse, el  costo injusto del engaño de esta gran burbuja financiera, esta pirámide financiera globalizada que nos afecta desde hace tiempo, pero que nos afectará mucho más gravemente aún cuando esta llegue a su fin, tan pronto el ciclo se agote y el ajuste final se torne inevitable y caótico?


La respuesta: no por mucho tiempo más.


Cordiales saludos,
Gonzalo

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Comparative advantage
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The boomerang effect
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As Chinese wages rise, some production is moving back to the rich world
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Apr 21st 2012

THIRTY YEARS AGO Shenzhen was little more than a village, abutting the border of Hong Kong’s New Territories. When China’s first Special Economic Zone was established in the early 1980s, workshops started to grow and glistening skyscrapers began to rise up. Its population is now around 12m, including perhaps 6m migrant workers. They often live in dormitories close to the factories that have helped make this city one of the richest in China.


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Countries that make things more cheaply than others are often accused of running sweatshops, and labour in China was undoubtedly cheap: that was why Hong Kong’s clothing and toy factories moved to the mainland. But with increasing prosperity Chinese workers want more pay, shorter hours and more benefits, just as Taiwanese, Japanese and South Korean workers did before them. Labour costs in China have recently been growing by around 20% a year.



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Some labour-intensive businesses are now moving from the coastal regions to inland China, where costs are lower, though the infrastructure may not be up to the mark. A number of firms, especially those making clothes and shoes, have upped sticks and moved to Bangladesh, Cambodia, Indonesia and Vietnam. Nike, for instance, used to make most of its trainers in China, but many of its big suppliers have moved elsewhere, and in 2010 Vietnam became the company’s biggest production base worldwide. Unless some way of making shoes and clothing without manual labour emerges (which, as this report will suggest later, is entirely possible), these businesses will move again in the future; Myanmar looks tempting, provided that reforms there continue.



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Yet for some manufacturers low wage costs are becoming less important because labour represents only a small part of the overall cost of making and selling their products. Researchers for the Personal Computing Industry Centre at the University of California, Irvine, took apart an iPad and worked out where all the various bits inside came from and what it had cost to make and assemble them (see chart 3). They found that a 16-gigabyte 2010 iPad priced at $499 contained $154-worth of materials and parts from American, Japanese, South Korean and European suppliers (Apple has more than 150 suppliers in all, many of which also make or finish their parts in China). The researchers estimated the total worldwide labour costs for the iPad at $33, of which China’s share was just $8. Apple is constantly tweaking its products so the figures shift all the time, but not by much.



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If China accounts for such a small share of the overall labour costs, surely Apple could afford to make iPads in America? It turns out that low wages are not the only attraction. What Shenzhen has to offer on top is 30 years’ experience of producing electronics. It has a network of firms with sophisticated supply chains, multiple design and engineering skills, intimate knowledge of their production processes and the willingness to leap into action if asked to scale up production.



What Shenzhen provides, in other words, is a successful industrial cluster. It works for Apple because many of the electronic parts it uses are commodities. The real innovation lies in designing the product and creating smart software, which is the speciality of another successful cluster, in Silicon Valley, where Apple is based.


.Where China scores


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Li & Fung, a Hong Kong firm that helps companies find suppliers in Asia, says in a recent research report that clusters like Shenzhen are “an integral part of China’s international competence in manufacturing”. It counts more than 100 industrial clusters in China—including one, in Zhuji in Zhejiang province, that just makes socks. It consists of more than 3,000 small and medium-sized enterprises in the production chain for socks. As long as China’s clusters maintain their edge, these jobs, whether producing iPads or socks, will not go back to America or Europe.



Yet some jobs are returning to developed countries. With Chinese wage costs rising, America’s productivity improvements can help tip the balance, especially when American firms invest in more automation. Yet robots can be used anywhere to reduce labour costs. For example, Terry Gou, Hon Hai’s boss, says he is planning to use more robots for assembly work in China. He is also setting up factories in some of the inland provinces.



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Again, wage costs are not the only consideration in transferring production from China back to America. Chesapeake Bay Candle used to ship its scented candles for the American market from China, and then from Vietnam when America raised import tariffs on Chinese-made candles. In June 2011 the company opened a highly automated factory near its base in Maryland, partly because of rising labour costs in Asia and increased shipping charges, but also because having a research and development facility in the American factory allows the company to respond to new trends much faster.

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The candle-maker is keeping its factory in China to serve the vast domestic market there. Many firms are adopting this “China plus onestrategy, usually putting an additional production base in a lower-cost country in Asia. The idea is now being extended to repatriating manufacturing facilities to rich countries. This also saves companies from having all their eggs in one basket. A string of natural disasters in recent years has shown that lean supply chains can snap all too easily.




For Peerless AV, a company based in Aurora, Illinois, moving production back from China began with worries about protecting its intellectual property. Peerless makes metal brackets and stands for all sorts of televisions, ranging from screens hung in offices to information displays at railway stations and the giantvideo wallsused at music and sporting events. To make lighter, better-looking supports for the thinner screens it saw coming, the company decided in 2002 to produce a range made from aluminium instead of steel. Unable to find an American firm to supply suitable extrusions and castings at the right price, it turned to China. As the flat-screen boom took hold, sales soared—but then the company began to find copies of its products turning up all over the world.


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It was these knock-offs that led to a decision to bring production back to America, says Mike Campagna, the firm’s president. Other benefits were to follow. By chance the car industry had gone into a slump and the company was able to pick up the manufacturing equipment it needed at low cost. It also managed to track down people with production experience. For the first time since its launch in 1941, the firm took on debt: $20m-worth to build and equip a new factory, which opened in 2010 to house all its operations under one roof.



“The total cost of manufacturing in China is not as cheap as it might appear to be,” says Mr Campagna. Shipping costs have been rising, containers are expensive and staff have to be maintained in both countries to manage the operation. It is also difficult to react quickly if the market changes.


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Typically there would be 30 days or so of inventory at each stage of the supply chain: the stock held by the suppliers to the Chinese factory, that factory’s inventory, the content of a shipping container on its way to America, and so on. A design change could take at least six months to implement. Now the company can get a prototype to a customer in a couple of weeks.



Mr Campagna would be happier if the economy were brighter, but says that making 95% of its products in America instead of 65% has transformed the firm’s business. The company used to have 250 workers in America and 400 in China; now it has 350 in America and robots doing hot and dirty jobs, like pouring molten aluminium and laser-cutting steel. The new arrangement, Mr Campagna reckons, “makes us very nimble”.


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That not only speeds up the production of customised brackets, it also helps with the standard stuff. The company’s standard products used to have a ten-year life cycle, but with new televisions appearing at an ever faster rate its stands and brackets now need replacing every 18 months or so.

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Sunshine and silicon
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Can repatriation work for commoditised goods too? Until a decade or so ago most of the world’s solar panels were made by American, European and Japanese firms. Then Chinese manufacturers piled into the business, helped by various government-backed incentives. China has now captured more than half the world market for the most widely used solar panels, which rely on photovoltaic cells made from crystalline silicon. But that could change again.


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Partly because of China’s onslaught, the bottom dropped out of the market: the price of silicon-based solar panels fell from $1.80 per watt at the start of 2011 to 90 cents by the end of the year, according to GTM Research, a market-research firm. This clobbered some firms that used different solar technologies. One of those casualties was Solyndra, a Californian firm, which manufactured photovoltaic panels in the form of thin-film coatings inside arrays of transparent tubes. Although more expensive than the silicon-based panels, the tubes were able to capture sunlight more effectively at different angles throughout the day. But Solyndra could not compete against the glut of Chinese panels. It filed for Chapter 11 bankruptcy last year, despite having (controversially) received $535m in federal loan guarantees.



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The solar-panel producers are slogging it out, often losing money, in anticipation of a huge market to come when solar panels reach grid parity”—that is, the ability to match fossil fuels in supplying power to national grids without subsidy. Zhengrong Shi, the boss of China’s Suntech Power, which has become the world’s biggest producer of solar panels, thinks that the market is now showing signs of picking up and that China could attain grid parity within three or four years.



.What chance, then, for solar-panel producers in Europe and America? For a start, it is not an all-or-nothing choice. To make a solar panel, the silicon is cut into wafers onto which photovoltaic cells are fabricated. The cells are then wired up, encased in frames and covered with glass.


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Turning the cells into panels might be done more economically in the country where they will be used to save on shipping costs. And fitting the panels to buildings, which accounts for most of the cost of putting in solar power, is always going to be a local business. The installation price in America is currently around $6.50 per watt for a house.


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So Western firms could import solar cells from China and make a good living installing them. But there are manufacturing advances in the pipeline that might level the cost of producing silicon-based cells in America and China, says Tonio Buonassisi, head of the Photovoltaic Research Laboratory at MIT.
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.It is possible to work out from publicly available data that the cost of making a complete solar panel in America is around 25% higher than making it in China and shipping it to the west coast of America. Much of China’s cost advantage is thought to come from cheaper raw materials, lower wages and the lower cost of capital. Doug Powell, a researcher at the Photovoltaic Research Laboratory, is undertaking a detailed analysis of production costs in both countries. After factoring in the manufacturing advances already in the pipeline, the cost of an American-made solar panel will fall by more than half to around 50 cents per watt within a decade (see chart 4). Solar panels that can be made for 40-75 cents per watt are expected to provide grid parity in America. The variation reflects regional differences in the amount of sunshine and the price of electricity.


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There is nothing to stop China from adopting the same manufacturing breakthroughs, and Mr Powell is investigating the effects of that too. But it is already clear that many of the production innovations now under way would chip away at China’s advantages. For instance, new production methods involve thinner wafers, reducing the amount of silicon required. Cells will become more efficient, simplified production will reduce capital costs and more automation will cut labour costs. “You only really need one breakthrough in each area of innovation to work and we are back in business,” says Mr Buonassisi.


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Although Solyndra and others have stumbled, the thin-film technology they used remains attractive. GE, for one, is betting on it. As part of a $600m investment in solar businesses it is completing America’s biggest solar-panel factory near Denver, Colorado. It will use thin-film technology to make larger and lighter panels which it reckons will cut installation costs by about half. Employing just 350 people, the GE facility will be capable of producing enough panels every year to power around 80,000 homes.

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Factories and jobs

Back to making stuff

Manufacturing still matters, but the jobs are changing

Apr 21st 2012



FOR OVER 100 YEARS America was the world’s leading manufacturer, but now it is neck-and-neck with China (see chart 1). In the decade to 2010 the number of manufacturing jobs in America fell by about a third. The rise of outsourcing and offshoring and the growth of sophisticated supply chains has enabled companies the world over to use China, India and other lower-wage countries as workshops.



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Prompted by the global financial crisis, some Western policymakers now reckon it is about time their countries returned to making stuff in order to create jobs and prevent more manufacturing skills from being exported. That supposes two things: that manufacturing is important to a nation and its economy, and that these new forms of manufacturing will create new jobs.

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There has been plenty of research to show that manufacturing is good for economies, but in recent years some economists have argued that there is nothing special about making things and that service industries can be just as productive and innovative. It is people and companies, not countries, that design, manufacture and sell products, and there are good and bad jobs in both manufacturing and services.
But on average manufacturing workers do earn more, according to a report by Susan Helper of Case Western Reserve University, Cleveland, for the Brookings Institution, a think-tank in Washington, DC (see chart 2).



Manufacturing firms are also more likely than other companies to introduce new and innovative products. Manufacturing makes up only about 11% of America’s GDP, but it is responsible for 68% of domestic spending on research and development. According to Ms Helper, it provides better-paid jobs, on average, than service industries, is a big source of innovation, helps to reduce trade deficits and creates opportunities in the growing cleaneconomy, such as recycling and green energy. These are all good reasons for a country to engage in it.



Despite China’s rapid rise, America remains a formidable production power. Its manufacturing output in dollar terms is now about the same as China’s, but it achieves this with only 10% of the workforce deployed by China, says Susan Hockfield, president of the Massachusetts Institute of Technology (MIT) and co-chair of President Barack Obama’s Advanced Manufacturing Partnership, an initiative recently set up with business and universities to create jobs and boost competitiveness.



The “Hammering Mancatches a nostalgia for the kind of manufacturing employment which in the developed world barely exists any more. Factory floors today often seem deserted, whereas the office blocks nearby are full of designers, IT specialists, accountants, logistics experts, marketing staff, customer-relations managers, cooks and cleaners, all of whom in various ways contribute to the factory. And outside the gates many more people are involved in different occupations that help to supply it. The definition of a manufacturing job is becoming increasingly blurred.

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Yet America’s productivity strides raise questions about how many manufacturing jobs, particularly of the white-collar variety, will be created. And some of the manufacturing breakthroughs now in the pipeline will bring down the number of people needed even further. “It is true that if you look at the array of manufacturing technologies that are coming out of MIT, many of them are jobs-free, or jobs-light,” says Ms Hockfield. “But that is no reason not to want to do that type of manufacturing in America, because feeding into jobs-light processes is a huge supply chain in which there are lots of jobs and large economic benefits.”



Companies are also optimistic about a manufacturing revival. “We are standing in front of a potential revolution in manufacturing,” says Michael Idelchik, head of advanced technologies at GE Global Research, the R&D arm of one of the world’s biggest manufacturers. The ideas that will make this happen can come from anywhere, which is why his laboratory, based in bucolic Niskayuna in upstate New York, also has research centres in Bangalore, Munich, Rio de Janeiro and Shanghai. As for the jobs likely to be created, Mr Idelchik thinks people have a myopic view of manufacturing employment: “If you look at everyone who contributes, it is a very large occupation.”



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Ghost in the machine


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A lot of the jobs that remain on the factory floor will require a high level of skill, says Mr Smith, Rolls-Royce’s manufacturing boss. If manufacturing matters, then we need to make sure the necessary building blocks are there in the education system.”

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His concern extends to the firm’s suppliers, because companies in many countries have cut down on training in the economic downturn. To get the people it wants, Rolls-Royce has opened a new Apprentice Academy to double the number of people it can train each year, to 400.


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In America firms have cut back on training so savagely that “apprenticeships may well be dead,” reckons Suzanne Berger, one of the leaders of a new MIT research project, Production in the Innovation Economy, which is looking at how companies compete. Many firms feel that it is not worth training people if they are likely to leave to work for someone else. Ms Berger and her colleagues think one promising alternative to apprenticeships is a collaboration between community colleges and local firms to develop training programmes. Sometimes the firms donate manufacturing equipment to the colleges.



The digitisation of manufacturing will make training easier. Companies cannot justify halting production equipment which may be running 24 hours a day so that trainees can play around with it.

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But computers can simulate production systems in a virtual environment, and products too. At Warwick University in Britain, a room with giant high-resolution screens is used as a virtual-reality chamber to simulate products under development, such as cars, in three dimensions.



Raw materials are put into one end of a machine full of tubes, cogs, belts and electronics, and pills pop out of the other end.
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A new vehicle today is likely to be drawn up as a three-dimensionaldigital prototypelong before it is actually built. It can be walked around, sat in, test-driven in a simulator, taken apart and placed in a virtual factory to work out how to build it. And the same software can be used by others in the company, including advertising staff who want to market the vehicle. The images generated from digital prototypes are now so good they are often used to produce brochures and television ads before a new car is built, says Grant Rochelle, a director of Autodesk, a Silicon Valley software company.



Many people working in factories are providing services that are crucial to manufacturing. “In the future more products will be sold on the basis of service,” says Kumar Bhattacharyya, chairman of the Warwick Manufacturing Group at Warwick University. “If you sell a car with a ten-year warranty you need to make sure it will last for ten years and that you have the services in place to look after it.”



Despite high unemployment, some manufacturers say that too few people are choosing engineering and manufacturing careers, but new technologies like 3D printing will help, predicts Lord Bhattacharyya. “If you can build something, people get excited about making things. Then they go and set up companies.”



Come closer

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One of the most successful incubators for new firms are industrial clusters, of which Silicon Valley is the best-known and most imitated example. Firms cluster together for a variety of reasons: the skills that are available in a particular area, the concentration of specialist services and the venture capital from investors with a close understanding of their market.


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Usually there are universities and research laboratories nearby, so the process of coming up with new ideas and the means of turning those ideas into products are closely linked. This relationship is set to become even more intimate with new manufacturing technologies. “We have technologies now we are only able to exploit if we have manufacturing capabilities in some proximity to those innovations,” says Ms Berger. You do not have to move far from her office to find examples.



Boston’s biotechnology cluster consists of pharmaceutical companies big and small, attracted in large part by the research being carried out in the region’s hospitals and universities. In the biological sciences the development of manufacturing capabilities is closely linked to that of the product, says Phillip Sharp, a Nobel prize-winner and co-founder of what is now called Biogen Idec, a Massachusetts-based biotechnology firm with annual revenues of $5 billion. What currently excites the industry, says Mr Sharp, is nanotechnology. This takes its name from the word for a billionth of a metre. When materials are measured at the nanoscale they often have unique properties, some of which can be used in beneficial ways.



Nanotechnology makes it possible to manufacture, on a tiny scale, new therapeutic substances carrying information on their surfaces that can be used to direct them to particular cells in the body.


The drugs delivered by such substances could be valuable in treating diseases like cancer. They are being made in small quantities now, says Mr Sharp; the challenge will be to scale up those processes once clinical trials are completed. And that, too, he adds, will depend on both product and manufacturing innovation working together.




Making drugs for the most part remains an old-fashioned batch-manufacturing process. This involves assembling ingredients, often from different countries, processing them in a chemical plant into a batch of drug substance, then turning that substance into pills, liquids or creams in another factory, which might be in yet another country. All this involves a lot of moving around of drums and containers, and plenty of inventory sitting idle. It is time-consuming and expensive.
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But in a laboratory in Boston another way of making drugs is being developed. Raw materials are put into one end of a machine full of tubes, cogs, belts and electronics, and pills pop out of the other end.



This pilot production line, a joint venture between MIT and Novartis, a giant Swiss-based drugs company, is pioneering a continuous manufacturing process for the pharmaceuticals industry. It is producing a copy of a standard Novartis drug, although not for use yet because the system is still five to ten years away from commercial operation. It relies on a combination of chemistry and engineering, speeding up some processes and slowing down others to make them work together.



The results are encouraging, says Stephen Sofen, the project’s director. The number of discrete operations involved in producing the drug has been cut from 22 to 13; the processing time (even excluding all the moving around of materials) has been shrunk from 300 hours to 40. And instead of testing each batch of material, every pill being made is monitored to ensure it meets the required specification.




Continuous manufacturing could transform the pharmaceuticals industry. Instead of a giant, purpose-built plant to supply the global market, you could imagine smaller, regionalised plants,” says Mr Sofen. Such factories could respond more rapidly to local demand, especially if a pandemic were to break out. The pilot line in Boston will fit into a shipping container, so it could be deployed anywhere.




It can make 10m tablets a year, working around the clock. It might also be used to make customised doses of drugs for particular patients. Continuous manufacturing could make more treatments commercially viable.