Necessary Friction (the fragility of today’s givens with Tim Minshall)

Every single thing that you can see right now, unless it's a plant, a rock, another person or some other animal has been manufactured. Such an obvious statement and such a trite thing to say, and yet saying it I find can be quite helpful for framing a further discussion.

So 40% of shipping containers go on ships through the Suez Canal. So we have a resilient system that can be brought to its knees by one person on one ship making one poor decision. We've made it so fragile by kind of minimizing costs and making things super efficient. There's no redundancy. There's no Plan B.

Welcome back to Policy Prompt. I'm Vass Bednar.

And I'm Paul Samson.

Vass, what are we maxxing this year? Is it protein, steps, quantum computing?

Actually, in 2026, we are friction maxxing.

Yeah. I had to look that up because I'm not as up of the trends as you are and I wondered if somebody kind of made that up when they were stuck in an elevator or bored waiting on hold or something, but ... So what is it?

Well, it's the opposite of how most of us live our digital lives right now. Right? The opposite of frictionless everything. This idea that maybe having a little bit less convenience in our day-to-day can create more meaning. So have a little bit more pain upfront, but benefits later.

For instance, if you're treating yourself to some takeout, you could still order directly with a restaurant, but you can go out of the house and go pick it up yourself. That's one of the benefits and joys that can [inaudible 00:01:44].

Okay. I get it. I get it. I like riding my bike in really extreme cold temperatures and things like that because there's a payoff at the end, so I get it.

And it kind of relates a little bit to the story of manufacturing that we're going to be talking about today that you only really notice the importance when it gets hard or there's a problem. So it does kind of fit today.

Exactly. Trade, tariffs, shipping disruptions, suddenly the supply chain, or supply chains, it's not a background hum, but it's dinner conversation. It's the fabric of our everyday lives becoming more visible.

I think everyone saw that a little bit during COVID-19. We wondered about supply chain disruption and kind of why it mattered. So now it's kind of becoming a little more mainstream, people are like, "Hey, how's it going?", and, "Is your furniture still stuck at the border? What's going on?"

Yes. And it's making the interconnected way that things get made and moved feel newly personal and politically relevant.

So this brings us to today's guest. Tim Minshall is the author of Your Life Is Manufactured, as well as some other books, a title that feels comforting and a little bit threatening and fairly technical. So we're going to spend some time unpacking what this all means.

There's this lovely quote on the book's dust cover calling it "an illuminating journey through the world of manufacturing and its transformational influence on our lives and the world around us."

Tim, reading the book, I was like, "Should I have become an engineer?" It was that engaging.

So yeah, it's heavy stuff, but it does seem to be true when it applies to manufacturing.

So Tim Minshall is a professor at the University of Cambridge. He's an engineer by training. He heads up the Institute for Manufacturing, which is an organization whose aim is simple, to help manufacture a better world. A big mandate, but he's been doing it for the past 20 years and has worked with thousands of students about learning how to manufacture; hearing it, seeing it, doing it. And a lot of those people have gone on to be significant people in the manufacturing space.

So let's talk about what we've outsourced from view and what happens when the world forces us to look a little bit closer.

Tim, hi, welcome to Policy Prompt.

Thank you very much for having me. It's a delight to be here.

Great to have you. And we'll just start off with a little bit maybe more about your background. We know you're an engineer, we know you've been teaching for a number of decades, but what's your journey been like a little bit to how you got there and what do you do on a regular basis? What's your daily activities look like?

You made me sound old there. The number of decades, I felt the weight of that one. I'm sure that wasn't your intent.

It's wisdom.

Paul's friction maxxing the questions. Yeah.

Wisdom. It's only about wisdom.

Okay. We'll go with that. Not the mileage. It's the wisdom. Okay.

So the day job is exactly as you said, Paul. Lucky enough to work at an institute with absolutely amazing people here at the University of Cambridge. We have this mission to help manufacture a better world and we do it in three ways.

We are all about learning. And so we are lucky enough to attract absolutely amazing people who want to come here as students, as visitors, other collaborators, and we work with them to help mutually develop new skills around manufacturing.

Secondly, it's very clear that the world of manufacturing, some things don't change, but as you were saying in the intro, absolutely some things are changing. And it's not just responding to crises. I guess we've always been doing that. But some of the new technologies and some of the ways in which we're making things really is pushing new challenges; not just to this strange little bubble that's sometimes regarded as separate, which is manufacturing without jumping ahead too far. It's a fundamental feature of all our lives and it's becoming ever more integrated. But maybe back to that in a minute.

And the third bit is we're here not just to help people learn and to do the research, but also to support organizations, be they startups, medium-sized companies, large companies, government agencies, to help understand what's going on and help them develop better solutions to the things they want to do.

Yeah. Great. So lots to come back to there, and we'll do that over the course of the conversation.

Vass, what's on your mind?

Well, we can pick up on some of that.

The fundamentally more integrated, I think we definitely want to dig into. The book, you offer a kind of brutally simple definition: factories turn inputs into more valuable outputs. So maybe it's worth asking just what do most public debates end up missing about that exchange across those inputs as a way to help us think better and appreciate this newish or evolving world of manufacturing?

So I think it's the idea that there's a thing called a factory and stuff is made there, and that factory is somewhere we don't really see very much, I think is where one of the roots of the problem lies.

Hmm.

But just kind of taking it up, down, back a notch, there's this very, very fundamental thing that I wrote it down and I thought, "I can't say this because it's so blindingly obvious." And yet saying it, I find can be quite helpful for framing a further discussion. So would you mind indulging me to do this?

And it's this very simple statement that every single thing that you can see right now, unless it's a plant, a rock, another person or some other animal has been manufactured.

Mm-hmm.

Someone somewhere had to say, "This thing is needed." It needs to be made from certain materials. Someone has to make the choices and design the thing. Someone has to source those materials. Someone has to find a way to make the components, to assemble the components into the thing that is needed, to get the thing to where it is going to be needed to ensure that it's supported and used appropriately, and then find another use for or dispose of in some way.

All of that is happening for every single thing we can see in our lives, unless it's a plant, a rock, or some animal. And that's just ... And as I say, it's such an obvious statement and such a trite thing to say. And I almost feel like I'm insulting people when I make that statement because it's so basic. But I find it really helpful.

Then you look at every single thing ... And when I'm doing talks now, I've ... I'm not sure it's doing my academic credibility much good, but I'll usually bring along a roll of toilet paper.

Toilet paper!

Yay.

I also do that when I give a talk. So no problem.

I'm just kidding.

I bring toilet paper on hiking trips, but that [inaudible 00:08:18].

Good. There are many reasons we could take [inaudible 00:08:21], but the reason I bring it along is something that seems so simple, right? You pick it up ... And I usually have one ...

Hmm.

Oh, here we go. But I have in my hand a roll of toilet paper. There's always one somewhere nearby me.

He does. He does.

And the reason I do this is it looks so simple. It's just some sheets of paper and a cardboard tube. You go, "Well, why is that an interesting manufacturing story?"

Well, as soon as you break it down and say, "Well, what's it made from?", it's made from wood pulp. What are the characteristics required of the product? You need something that is, without getting too graphic about it, something that is soft and strong. Right? And so the fibers required to give that dual functionality come from trees grown in different climates.

So you need a multi-decade journey of growing trees in cold climates and growing trees in warm climates to get these fibers with these different characteristics. You're chopping down the trees, you're putting them into wood chips, you're pulping them up, you're putting water in, taking water out, shipping it across oceans, re-putting the water in, reassembling it, spraying this liquid pulp onto rollers which are heated, which then leads eventually to big sheets, which are then chopped into smaller sheets, which are then wrapped up, which are then sent to a distribution center, which is then shipped off to a supermarket or to a direct retailer to your home.

All of that is happening for something as simple as a two component product. Huge amounts of energy, thousands of miles traveled, Vasst amounts of water put in, taken out. I mean, it's an incredible journey for something as simple as a roll of toilet paper.

So I like to start with that. And then you expand it up and say, "Well, so what's the equivalent journey for a car?" You know, a typical petrol or diesel car has got around not two components, 30,000 components. If it's an electric vehicle, we're down to about 15,000 components. And so you can then imagine if a journey is complicated for a two component product, what's it like, what's the manufacturing journeys that go with a car, or with an aircraft that's got at least, an airliner, two or three million components?

Mm-hmm.

Looking at an iPhone, it's not just that it's got lots of components, but these components are made in different parts of the world and assembled and moved, and suddenly you have this fantastically complicated story for every single one of those things that you can see in front of you or within your eyeline at the moment. Absolutely everything.

And to me, this is just ... Again, it seemed like giving a privileged insight into the really obvious, but I just felt I had to say it, to go ... I had not thought about that. So all I tried to do was just say, "Well, I should probably write this down." Genuinely expecting people to go, "This is so obvious. Why is this so called academic engineer telling us something so blindingly obvious?" But I was surprised that people ... Well, some of them said that. Others said, "This is helpful. This is just making it clear that we all live in this very, very, very complex world on which we massively rely, everything in our lives pretty much, and it's largely invisible." We don't really get involved in it as much as we used to, going back a few centuries.

Hmm.

And so when it goes wrong, there's this extraordinary feeling of shock.

And we saw that during COVID, right? Suddenly, I mean, I ... Yeah.

Yeah [inaudible 00:11:38].

I'd not experienced empty supermarket shelves in my life. I'd seen pictures in wartime of things happening, but in my relatively wealthy part of the world, not having stuff just didn't seem to be a thing.

Going to Amazon and finding-

That's the real reason you have so much toilet paper.

Yeah. It was the toilet paper crisis at the beginning of COVID-19.

[inaudible 00:12:01].

That was the ultimate product that everyone was worried about, right? [inaudible 00:12:04].

It became iconic, didn't it?

Yeah. Yeah, it did.

But so continuing a little bit with that theme of the invisible anyway, there's a part of the book where you talk about an analogy with the sewage system. You know, that it's essential, it's below ... Like no one really looks at it, thinks about it, they definitely don't want to go there, and it's completely out of sight and out of mind. And then something goes wrong and there's an emergency response, right?

So can you point to something specific that's gone wrong even to further prove your point here about, okay, well, everything was going well ... We just talked about toilet paper and COVID-19, but some other example of where just suddenly it went bad?

Absolutely.

So again, just ... Because the book was never meant to be a COVID book, but its genesis was there because it was, yes, the toilet paper disappearing from the shelves. But more seriously, it was significant lack of medical supplies, particularly personal protective equipment, what we'd call PPE.

Yeah.

And this was much, much more serious. We became sort of jokey about, "Oh, there's no toilet paper. What's all that about?" But that's actually quite rational hoarding behavior in the face of uncertainty. There's nothing particularly weird there. It was the hospitals, certainly in the UK and I know in other countries as well-

In Canada too. Canada too.

Same? Right.

Same.

... where we had ended up single sourcing lowest cost products from far away. And an awful lot of our personal protective equipment was manufactured, and still is, in China.

And that's absolutely fine. You know, great manufacturing, great price point. No problem at all. Until that wasn't exported. And then we'd moved to this sort of ... What's it called? The economists call it mercantilist; the idea that it doesn't matter. You don't have to make it, you can just go and buy it.

Well, pandemic, it was across the entire globe. It was a pan problem. You know, it was everywhere. So there just wasn't the supply. So then you say, "Okay, well, surely we can just make this stuff. Why can't we make it locally?" Well, we stopped making it 10, 20, 30 years ago in many cases. So you can't just switch it on again.

And there's a whole bit we can get into around manufacturing knowledge. Yes, you can buy the machines. Yes, you can look at an instruction manual. But understanding how you set up a manufacturing operation and how you have the people with the right skills, who interact with the right suppliers and all of this sort of orchestration, if it's not there, you can't just recreate it overnight.

So you need to have sort of a basic level of manufacturing capability, this idea of what's called the industrial commons; enough of it going on so that when something happens, you can repurpose it to do the right thing.

And there was a price shock as well when that happened in Canada with the hospital personal protective equipment and for food manufacturing and things. They needed subsidy from the government to be able to afford this very expensive equipment that was scarce suddenly. So there's all kinds of implications when this happens.

Hmm.

Well, and that was also a moment where we started talking about ... The phrase in Canada briefly was friendshoring.

Hmm.

You know, that we needed to boost our at-home manufacturing capacity. And policy-wise, we've sort of drifted from there.

You mentioned the supermarket, and I think people are imagining, listeners are likely imagining themselves shopping for things or going for things. And the supermarket is certainly a site where we care about ... Maybe more about composition, or at least place of origin. There's more awareness.

You've described that supply chain as being kind of a magic show. Maybe we can talk more about what that magic hides or obscures, or what we're taking for granted there when we're shopping.

Yeah, absolutely. I mean, one example I like to use ... So one of the issues that came out of COVID was this sense of, "If you can't get it, can you make it?" There's that discussion.

Mm-hmm.

But then there is this general lack of resilience in the systems we've built.

If you just pause for a second and think of the, I mean, extraordinary human and technological achievement of Amazon. Other providers exist, of course. The fact that in the middle of this call, any one of us three or any of the listeners could be quietly on their phone ordering something. And if it's not at the front door by tomorrow morning, you're pretty upset about it, going, "Hang on, I asked for 24 hour delivery. What's going on here?" And so we've become accustomed to great variety, really good price point, fast delivery. And to make that work requires a very, very, very sophisticated system.

And just one example around electronics we could talk about, but an awful lot for the UK is going to be made in China. In fact, I'm sure for Canada as well. An awful lot of electronic components made in, if not mainland China, elsewhere in that region. And for us, our side of the world, nearly all of that will be put into containers and sailed nicely across, heading west in our case, it will go through the Suez Canal.

So 40% of shipping containers go on ships through the Suez Canal, and it is about ... If you try and turn a ship sideways, it will get wedged in there. Right?

Mm-hmm.

So it's narrow enough to take one ship in one direction and it has one way traffic going through it. And so as you might recall, not that many years ago, that's exactly what happened. One of these 200,000 ton ships by one person on the bridge of one ship made one small speed correction and straightaway wedged the Suez Canal, and no traffic could get through for seven days. That's billions of revenue lost in that whole process. Absolutely extraordinary that that was happening.

So we have a resilient system that can be brought to its knees by one person on one ship making one poor decision. So that's an aspect of it that we really worry about. We love the efficiency, the low cost. We've made it so fragile by kind of minimizing costs and making things super efficient. There's no redundancy. There's no Plan B.

You've mentioned the kind of ecosystem of what's going on here with manufacturing. In some ways it can be broken up into making stuff, moving stuff, consuming stuff.

I've got two questions really. One is, where are the new technologies coming in here to be really relevant? You know, you hear about logistics, traceability. Are we kind of moving leaps and bounds on our ability to track where things are and understand?

And the second part of the question would be, where do policymakers tend to intervene? Are they more at the making end, the moving end, the consuming end, or are they kind of everywhere?

Two great questions.

So the first one about new technologies, one of the most important technologies since the ... Well, for quite a while has been the growing perVassiveness of the digitalization of so many aspects of manufacturing.

Yeah.

So I'm going to do something now which doesn't work particularly well for an audio only podcast, but I'm going to do it anyway. I'm going to have to describe what I'm holding up now. And so Vass and Paul can see this.

This is a very early generation cell phone, right? It's about the size of a large loaf of bread, weighs considerably more. That arrived back in the 80s and people went, "Wow, it's a phone, whatever." And I've now got a whole collection of these, which I'll describe.

Next one is like half the size of a baguette, I guess.

I like that one.

That's good.

That's like a classic.

That's good.

Yeah.

That should come back [inaudible 00:19:37].

It's a classic, right?

Early 90s.

Yeah.

I would rock that. That's cool.

That's the Gordon Gekko phone.

Yeah.

And then somewhere around here, I've got a nice little Nokia, the size of a candy bar.

And again, part of it is manufacturing has driven that improvement in performance, reduction in scale, development of new battery technologies. The technologies themselves have been manufactured to become ever more functional. But also, because we've got much more digital and enhanced all these communication technologies, we've made the process of making things much more integrated.

And so now the visibility as we head right into the world of what we call not just internet of things, but industrial internet of things; the fact that our mobile devices have so many sensors in that are generating so much data about the use of our technology ... We see this across our cars, we see this across air transport and power systems. Vasst amounts of data being generated, which helps at all stages of the make, move, consume journey.

By using the product, we generate data, which is fed back. When we buy anything from a ... You know, going back to the opening here about take out meals, removing friction from that.

Yeah.

It is extraordinary that in my lifetime, I can do that thing where I have a small device in my pocket, I can just go, "I want a pizza," and I can watch the entire process of production and delivery happening and payment; all of it happening on one small device in my hand with a couple of taps of my thumb.

And that's mirrored absolutely across all the supply chains; this level of data being generated to the extent where it's actually a problem, because there's so much data, what do you do usefully with it?

And then the final bit is there's the technology being deployed within factories, and there we find it very, very interesting. And if we just take a word that is sometimes misused of automation.

Yeah.

There's all this stuff to do with robotics and bringing in guided vehicles to move stuff around factory, to have robots doing the welding and all that stuff we see on the news broadcasts, but there's also ... That's physical automation. There's also the cognitive automation.

So it's taken us a few minutes, but we've got to AI. It's usually much earlier, I know, but that's a huge, huge issue. So that problem I just quoted there about so much data being generated across supply chains and supply networks-

Mm-hmm.

... well, now cognitive automation, AI can be used to help draw insights from that, to make predictions, to provide another option, a different way of thinking about things.

So that to me is ... I think the digitalization of so many aspects of manufacturing has had one of the biggest effects.

Yeah. And taking that even a bit further, there's the digitalization of things and then there's this now tokenization where it becomes even more formalized in a way that's integrated, right?

Hmm.

So that could even take it to the next level.

And I know you've got a Blackberry somewhere in your collection there of machines.

Totally do.

Yeah.

Yes.

Okay, good. Just wanted to check.

But this tokenization is going to be another wave coming, I think.

Yes. Yes. No, absolutely.

Just for the listener's benefit, I have a collection of all mobile phones, including those splendid ones produced by research in motion, the Blackberry, which was just such a phenomenon.

You know, those click keyboards are coming back. There's a product you can get to add to your iPhone to bring that satisfaction back to tactileness and friction maxxing.

The last time I saw Blackberry was actually, it was in a museum. I'm not joking. It was at a beautiful art gallery in Montreal on just like this history of industrial tech. But everything comes back in interesting ways. And I love that you brought up that digital layer and automation to processes, but also the products that we see.

I think we've established that these global supply chains are complex networks where shocks can propagate quite quickly. And to pick up on Paul's earlier question where just sort of thinking about elements going wrong, maybe we could root in one of the best recent examples of what seems like a small or minor disruption in the manufacturing process turning into something that's actually much more systemic.

Ooh, yes. So ... Well, the car industry is a great example of this.

Hmm.

And semiconductors, a great example of this, because you end up with supply networks that are so complex. And I use that word deliberately. So it's complicated, lots of stuff going on, complex, lots of things going on, and there are interdependencies between many of those things.

And so to this point about very complex supply networks, now we have several colleagues who are looking at AI as a tool for supporting visibility and resilience of supply chains in critical minerals and in food and in all sorts of things. And the charts that they produce, and a particular colleague, Alexandra Brintrup, looking at the way in which we bring visibility to some of these supply networks, you end up with these sort of charts that look like ... You know those magic eye pictures? We look at a lot of dots and suddenly a picture emerges? It's that many dots. And these are all the suppliers related to a single product, like a car or a plane.

Right.

But then you start to look at those in more depth and it'll be things like the people who provide a particular adhesive that is essential for some aspect of some part of semiconductor production, which if not done means you can't produce enough semiconductors so you can't get enough shipped to the car companies, these are the lower end semiconductors, which means you can't build your cars.

And it was just an extraordinary example of that. So I made the mistake of trying to buy a new car during COVID. Very bad decision. Very happy with the car, by the way, in the end. But it was so long being delivered because it had been built. We could see with all the data, the retailer pointed and said, "No, no, it's been built. Can't release it because there's a couple of chips missing for doing," I don't know, "The window controller," or the mirror controller.

So some tiny thing, supplier of the adhesive to one part of a supply network, multi-layers down, has a problem and it propagates all the way through. That means I don't get my car. It's delayed by three months.

It happens more and more like that. We see a lot of that happening. So this visibility is really, really important.

But then you've got to ... Coming back to the question, Paul, about policy. It's okay, great. So we have more data, we've got more modeling and simulation. We can spot where things might go wrong. What do we do about it?

Mm-hmm.

We've got another colleague working with us, Mukesh Kumar, looking at things like the resilience of the supply chains for critical minerals. So you can deploy lots of technology and lots of data analysis and AI to look at what's going on, but you've then got to make decisions about, "So what are we going to do?"

And you mentioned that example of nearshoring, and I think friendshoring is one of those versions and there's many versions of that. Well, these are strategic decisions. Who makes them? And on what basis are they making them?

Given the ... What's the polite phrase? Ever-evolving geopolitical situation that we see at the moment, you've got to make decisions, but is it a two-way door? Can you reverse it if actually tomorrow's news shows that that was the wrong decision to make?

So we're seeing more and more of that; the ability to draw data in, make complex things visible to support decision making, but someone still has to make that decision and then work out, "Is this reversible or irreversible?"

Policy Prompt is produced by the Centre for International Governance Innovation. CIGI is a nonpartisan think tank based in Waterloo, Canada with an international network of fellows, experts, and contributors. CIGI tackles the governance challenges and opportunities of data and digital technologies, including AI and their impact on the economy, security, democracy, and ultimately our societies.

Learn more at cigionline.org.

One thing that we haven't got into at all yet is, again, when you think of this incredible movement of things across the whole ecosystem, there are positives, there are negatives.

One of the spillovers, let's say, we haven't talked about is carbonization, decarbonization, carbon emissions. And you talk about how going slower drops emissions. I mean, there's still emissions problems with bunker fuels and ship transportation, but you're saying that it's much better for the carbon footprint if we use more slow moving vessels, but it's hard politically.

Is that kind of what you're saying, or what are you saying on that?

Yes-ish, if I may say.

So you're absolutely right. That example of maritime cargo shipping, there was this wonderful meeting hell apparently where they wanted to look at, "How can we reduce the emissions from all these ships moving around?" And there's all sorts of ideas around hydrogen fuel systems and attaching sails to these big ships to reduce the amount of energy required from diesel engineers.

Back to The Future. Yeah.

Back ... Exactly.

Yeah.

But one of the most effective things is just go a bit slower. It really makes a difference.

Now the strict-

Friction maxxing.

There we go.

Yeah.

But ... That's a great point, Vass, because what then happens is people will say, "No, no, no, no, no. We can't go slower because people want their product immediately."

Hmm.

It turns out there's always a trade-off, right? Yes, you're less harmful, but you get it a bit slower.

But it's not binary. It's not one or the other. So you see lots of examples where people are going, "No, no, for this project, we need this thing to arrive on time. If this doesn't arrive on time, the rest of the project can't happen." I don't know, a construction project or some big ship building project, whatever it may be. In other cases, you go, "Well, it's going to arrive a day later. Does that actually matter?" Yes, you want it as quick as possible, but if you're willing to just wait a bit, there are these benefits.

So there's always going to be a trade-off, but-

Super interesting.

... companies have to be quite courageous to do that and ... Yeah.

But people are tilting towards, "I want it now," more than ever, I think as you said earlier, right?

Absolutely.

So there's definitely a counterforce against this sensible policy in a way or a sensible reaction.

Absolutely. But also there's the reality of the number. Yes, of course we are emitting too much carbon and other gases that are causing immense problems. But everything is a trade off.

And one of the things that I found interesting when we started digging into some of the data, we're constantly beating up the aviation industry for, you know, we should fly less and [inaudible 00:30:14] more efficient engines. Absolutely. But there's also lots of benefits to flying. You know, moving people around breaks down barriers between cultures and it's good for all sorts of things.

Sure.

And if we look at total CO2 emissions from aviation, it's about two to 3% of the total.

Total emissions from cement production is about eight, 9%. So wouldn't it make more sense to put more effort into making cleaner cement because we're going to go on needing more cement for more concrete for more buildings, which has lots of benefits for hospitals, schools, roads, all these things, rather than just focusing on transport?

So everything in this space just gets into a series of wonderfully interesting, but very challenging from a policy point of view trade-offs.

I mean, speaking of trade-offs, trade is being weaponized now more than ever, I mean, I would say amid geopolitical tension, but I feel like those two words aren't doing enough work to describe the situation.

I'm not sure what you mean. Have I missed something in the news?

Yeah, exactly. Refresh. Click refresh.

Take a look. It just happened a few minutes ago.

No. Maybe.

Yeah. Check [inaudible 00:31:21].

And I think it's safe to say there will be future disruptions; also a word that's not doing enough work in that sentence.

Given the context that we're in, what does or could weaponized trade look like for manufacturing? Right? Export controls, inputs denied, standard games, shipping risks, data controls. We'd love to muddle through that merging of these complex manufacturing systems with the new geopolitical world order.

Just a, you know, simple, casual question.

Yeah, no, no. Thank you for giving me one of the easy ones.

So just a few statements upfront. One, that sounds way above my pay grade. I just wrote a nice book about toilet paper and mobile phone [inaudible 00:32:05]. The other thing is it is incredibly difficult to make any sensible statements in this space.

Totally.

And anything I do say is very much just a personal opinion and a reflection from just an average guy.

So I think maybe one way to look at this is by putting tariffs in place, it does distort things. I think that's a statement of fact. And that can be intentionally distorting things or it's an unintended consequence, but it does distort stuff. And there may be a very good reason for doing it. So your use of tariffs at different times in our mutual histories, it's been a known thing and it's done for a reason and usually we move on from that. What it also can do though is trigger other behaviors.

So one of the examples, I guess, is if you're not able to buy something from overseas and you need to make it, then that can actually give you an advantage because then you're forced to develop the capability to make it.

I'm thinking of some of the territory that's absolutely beyond my comfort zone and pay grade, which is shipping of chips to mainland China from Europe and from North America. That presents lots of interesting questions. I think I'll just say that. But what it has done, we've seen lots of huge amounts of investment in mainland China in the development of chip manufacturing capabilities.

So the tariff thing as a control mechanism has shifted the efforts from buying and building products with them to, "Well, can we make these things ourselves?" So it can have this sort of unintended second order consequence.

But whatever happens, particularly if they're done quickly, they are, as you say, Vass, they are disruptive in a way that requires an even bigger word, I think.

It's interesting right now on the tariffs, you know, the Liberation Day tariffs and all this. You know, big, big, big move. The data's just starting to come in in terms of what was the impact, like who actually bore the cost, right? And it looks like right now it's tilting very much towards the consumer paying that cost, which probably allows for ... You know, that they're willing to pay, and so therefore they're probably willing to pay for higher cost domestic manufacturing and production in some of these areas.

So it actually might lead to that shift. It's not leading to a lower cost shift and the inflation is going to stick in the system and probably pop up. So the Trump administration wants it all. They're not going to get it all, but they may get a little bit more domestic manufacturing in some areas.

Is that kind of your read of the likely evolution as well? And not just in the US, obviously.

Sure. And I think it's absolutely true that when you put a tariff on, the people who end up paying for it tend to be the end consumers because it's got to be passed. And supply chains are so lean and efficient, they can't absorb much of that cost, so it has to end up somewhere, and it very often ends up with the end user.

So yeah, I think there's something about that. I mean, there was the great case of the talk about shifting iPhone production back to the United States.

Right.

Yeah?

Nice.

And some people went, "Well, that's just never going to happen."

And there's conversations around manufacturing certain semiconductors in certain parts of the world and that being shifted away from a zone of potential high friction to one with less friction.

But these things can't happen quickly. It's back to that earlier comment about, if you want to start doing these things, it can take, particularly for advanced engineering, a generation.

I'll keep it UK focused because perhaps that's more comfortable for me, if you don't mind. But this idea that we in the UK ... And I was part of it back in the late 1990s, of shifting manufacturing to China. And that was UK manufacturing, it was a known, clear strategy. It was offshoring. It was regarded as a really good thing because these things that we had become less good at that we were not cost-effective at could be done very effectively by companies in China, and it made absolute sense. And for a while, that was fine.

And then surely, China has become one of the most sophisticated manufacturing nations in the world with extraordinary capabilities at the very highest end. And now we're realizing that perhaps we need to retain or develop more of our advanced manufacturing capabilities in the UK. We have some very strong ones, but some we're less strong at.

And so the thought that you can say, "Well, let's just start doing it again," you go, "No, we didn't just send the machines away. We didn't just send the instruction manual away. The knowledge disappeared and it's been rebuilt very effectively in China over a series of decades." So when we try and recreate it, yes, we can do these things, but it's not quick.

One of those questions you were asking earlier, Paul, about the role of policymakers in this is, so that's a long-term issue about skills development and supply chain development, and making sure that you've got these people who are going through the technical colleges, who are going through the universities, who are going through continuous professional development, to make sure we have this workforce that can do advanced manufacturing, but also that we have the suppliers who can support whatever the future of manufacturing may be.

So sometimes we think quite tactically and going, "Is there a supplier who can do X?" But it's not just, "Can they do X and is there one of them?" It's, "In the future, we're going to be doing a different thing. Will those suppliers be there who can help us do whatever the future may bring?"

Like the German skills on auto manufacturing were legendary, but now they've got to do something else to some ...

Hmm.

Right.

At least partially, right?

Right. The skills of the individuals and also the suppliers, what is being supplied now? And you've had over a century of top end metalworking and casting and machining and component at the highest level. I mean, a phenomenal achievement what Germany did, what Japan did. Absolutely amazing.

The electric vehicles, as we said earlier, half the number of components, from 30,000 to 15,000, and many of them are differently complex. There are just fewer bits that need moving around and making.

I just want to ask this next question like sort of asking for a friend, but this year, speaking of friction maxxing, it's also the USMCA joint review year, which is scheduled for July. Let's see what happens if we're still doing that.

If you were advising Canada or Canadians going into that moment, what sort of manufacturing capabilities would you treat as maybe being non-negotiable or something we need to be primed to protect?

Okay.

I reckon I would not name specific sectors.

Mm-hmm.

My knowledge of the Canadian economy is not sufficient to be able to do that.

Generically, one could perhaps think of things that have the most uniqueness and the things that have the deepest roots. Okay?

So for the UK ... That's a safe way out of this. I can talk about the UK.

So one ... We get asked the same question, "What areas should we be involved for advanced manufacturing?" And so we see the UK now has, as I know Canada does, an industrial policy which says, in the UK's case, we've picked eight sectors and they're things like, and no surprise, you know, advanced healthcare and defense and energy and all these things. But everybody's talking about healthcare and defense and energy, and there's nothing new there. So what are the segments within that that we want to prioritize?

So for example, again, UK example, advanced therapeutics. Okay? So again, I knew nothing about the pharmaceutical industry, I don't know much about it now, but I had it explained to me very, very slowly and carefully, which was good, that normal drug development, most drugs are produced in bulk on the assumption that every human is the same. And if you have this condition, you'll get the same drug. And the truth is we're all different; different physiologies, different what I think are called comorbidities, other conditions we have, all that stuff.

So there's great things going on in the world of pharmaceutical. One of them is the move from generalized solutions to personalized solutions.

Hmm.

One of those examples is cell therapies for certain types of cancer treatment where you extract ... Again, I'm hovering right at the edge of my knowledge comfort zone here. T-cells extracted from the patient, they do some clever stuff, I think is the technical term, to reprogram those cells, re-inject them into the patient; those refined T-cells zap the cancer incredibly effectively.

So it is a manufactured product based on the patient's own cells. Not based on. It is the patient's own cells, processed, re-injected back into the body. So then every single treatment is unique for an individual patient.

Now to build up capabilities in that is very advanced. And we see examples of trying to automate that process. So that's a thing that the UK is trying to do. We have specialists in cell and gene therapies as a manufacturing capability. It's very, very sophisticated. And it's taken a while to get there, and it's based on deep research routes and a very open healthcare system where we have lots of good patient data and we can run trials. It works well.

So that's an example to me of a manufacturing sector that's slightly not even regarded as manufacturing by some people, but absolutely could become a national strength if followed through with further investment, if followed through with ensuring that we can scale these activities.

So I think whatever the equivalents are for Canada, it's those things that require progressing along a trajectory that's already started, and which can't be easily just plucked out and moved somewhere else.

Again, I know I'm making very generic statements, but that personalized medicine example I think perhaps is a ...

It's a great example.

And the role of data there as the richness of health data, for example, in Canada with one of the most diverse populations in the world, to your point that one drug is not going to work for everyone; when you have this data set and you're able to unpack it, that can allow you to develop much more applicable drugs, let's say, right? And so all of these things are connected.

Mm-hmm.

It kind of takes us to another question that is, in a way, still trying to get the answer from you of what should we prioritize on. But you've criticized those that automatically just say, "Let's build it here. Let's manufacture it here," right? Appropriately so, the political reaction to anything is, "Let's do it here." Right? But of course, some things are just impossible to do.

And let me pick an example of aluminum, or aluminum, I think as you call it in [inaudible 00:43:00]-

[inaudible 00:43:00]. Thanks for the translation.

Right. Just to make sure you got it.

The US has said, "We don't need Canadian aluminum. We can do it here." But of course, you've got to have cheap energy, you've got to build up all the capacities that you're talking about. So some things are kind of not 100% impossible, but almost impossible.

But maybe the flip of that is what are the things that countries should have some basic capacity in beyond food? And what are the ones that are maybe elusive, right? That we've just kind of missed that boat, right? You can either do aluminum or you can't really. Right? The conditions aren't there.

That's a great point. And we have a similar debate in the UK about steel.

Yeah.

You know, regularly, due to the relative international cost of steel, we'll find that UK produced steel is too expensive, and so plants come under immense pressure. There's still need for massive amounts of steel for our building projects, our infrastructure, rail projects, all of these things. So we'll end up subsidizing and rescuing the production of steel in the UK and then still often importing the steel as well. So you end up with sort of different agencies sometimes not fully aligned in their goals, which happens everywhere.

I hope we would avoid this topic, but one of them rests around defense capabilities.

Hmm.

You know, when things start to go badly wrong, well, at any time, number one role of government is to keep its population safe and secure. And much as we'd hate to admit it, and certainly from a European perspective, it's not that far away across the channel and across Western Europe into Eastern Europe, there is a full scale land war going on. And that is very ... It's a war of manufacturing, right? It's the ability to build enough stuff to allow things to continue to a point where one of them can't build enough stuff.

And I don't want to get too much into that. It's not something I'm comfortable talking about.

Mm-hmm.

But it is an absolute thing. And we see that in wartime, it often comes down to industrial strength. Can you produce enough of the right stuff in the right way? If you're importing it all and you don't know how to make it, you're immediately at risk.

Now, you can't make everything. Not every nation can then build nuclear submarines and jet fighters and bombers and drones. We're all having to import and move stuff around. It's which bits become essential sovereign capabilities?

Yeah.

Hmm.

And then it comes down to ... Yes, of course we can talk about the weapons, but it also comes down to which bits of the food system, which bits of the pharmaceutical system, which bit of the transport system? And you can't do all of it, but every nation will have a different set of needs.

Mm-hmm.

Hmm.

But yes, thank you for introducing it that way, Paul, that it can't be a bring it all back. We'll just become a splendid island of isolation and every nation will do that. That's an extreme wrong answer as well. You know, it's got to be somewhere in the middle that is case by case dependent.

Well, Tim, you've been showing Paul and I your amazing items. And I don't know if you could see from before, but I have a printer. And I feel like there was also a moment where there was this idea that we were all just going to 3D print everything that we needed and just sort of download files, and obviously that's not the case.

You've helped us appreciate these systems and processes so much more as we look around our desks and our homes. And the things that we cherish and maybe haven't thought twice or thrice about, we will. So thank you so much.

Yeah, thanks a lot for your time. Real pleasure to meet with you and have this chat.

Thank you for allowing me to have this conversation.

Wow, that was great. He's such a knowledgeable person, and as an engineer who's kind of evolved in the space that he's occupying now in his thinking at interdisciplinary, you know, kind of what's really going on with supply chains.

The thing that struck me that I was thinking of, and we didn't have a chance to discuss it directly with him, but it's that proverb. And there are several. One of them goes back to the Middle Ages where it's kind of like, "For want of a nail, the horseshoe was lost."

Hmm.

And because there was no horseshoe, there was no horse; because there was no horse, there was no rider; because there was no rider, the battle was lost; because the battle was lost, the kingdom was lost. All for want of that horseshoe nail, right?

And it's kind of like he's identifying those now in the current system, I think actually in a way which is even more profound than that old proverb. Because if you think now, we've got all these choke points in systems. And we're seeing it now obviously with ocean transportation choke points, like suddenly you've got a transportation issue, but I think you also see it in the new technology space where when you think of artificial intelligence or quantum computing, or think of all those pieces that are required, whether it's chips, rare gases, energy, there's so many pieces, it's so globalized that that horseshoe nail proverb really applies to what we're seeing now.

Yeah. I'm glad you used the word profound. I mean, I was also going to add fun. Like I was struck by how Tim reveals the wild world of manufacturing, how and where things are made, where those interdependencies are.

That differential too, right? Between just the geography of where things are made, and that layer of how they're made and the associated knowhow. Right? Who has the intellectual property associated with that? I think everyone is more alive to this and curious about it and sort of hungry to learn about those stories behind the items that sometimes come to us through very kind of invisible ways, right? Where you and I are always joking about that loss of friction in our everyday lives and let's bring some of that back and make it a bit more visible than it's been historically.

Right. It also has an implication for efficiency versus redundancy in a way. Like that efficient systems drive you to not have a lot of redundancy or extra layers in a system because you're just totally optimizing, and then suddenly you need something because there's a piece missing, right? And that's coming back to be more significant as well in areas where you cannot fail, you cannot have a piece missing. You've got to have the full security and resilience around that supply chain. And so that's come back to be a bigger deal as well.

Ditto interoperability, right? And kind of elements that are more closed and more open and interchangeable. So I'm glad you honed in on that too.

Well, I think that's a wrap for today. It was a really fascinating discussion.

Talk to you soon.

Policy Prompt is produced by me, Vass Bednar, and CIGI's Paul Samson. Our supervising producer is Tim Lewis with technical production by Henry Daemen and Luke McKee. Show notes are prepared by Lynn Schellenberg, social media engagement by Isabel Neufeld, brand design and episode artwork by Abhilasha Dewan and Sami Chouhdary, with creative direction from Som Tsoi. The original theme music is by Josh Snethlage.

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