This piece titled “Software eats manufacturing (and manufacturing gains)” by Mark Muro, Kelly Kline and Bruce Katz was posted on the Brookings Metropolitan Policy Program website on February 5, 2016.

It’s been five years since the venture capitalist Marc Andreessen quipped that “software is eating the world,” meaning that all of the digital tools and platforms needed to transform industries through software finally worked and were doing that. To prove his point Andreessen ticked off a long list of mostly consumer-facing service industries like bookselling, music, telecom, and air travel that were being productively disrupted. Though he noted that the global economy would soon be “fully digitally wired” he didn’t have as much to say about the manufacturing sector.

However, waves of digitization have been coursing through the manufacturing sector as well, creating new opportunities. Digital technologies are rapidly transforming the design, production, operation, and use of items as diverse as cars, workout clothes, and light bulbs. The changes have huge implications for industries and places, workers, and entrepreneurs.

To explore these implications, the Metro Program, in partnership with the city of Fremont, Calif., convened its second advanced industries regional workshop last week in Silicon Valley—the world focal point for the digitization of everything.

Such digitization is now so ubiquitous as to practically define the nation’s critical advanced industries sector, including manufacturing.

Therefore, the session brought together two dozen industry executives, entrepreneurs, investors, scholars, and economic development officials to tour an emblematic factory (Tesla Motors); discuss the latest trends in the Silicon Valley manufacturing ecosystem; and parse their implications for companies, regions, and the U.S. economy. Many, many trends were raised and assessed during the day’s discussions on the campus of Seagate Technology, in the former Solyndra solar factory, but a short list of compelling conclusions with broad implications came into focus.

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