Why did the USA and UK dominate advanced manufacturing in the early 20th Century? Why did it shift to Germany and Japan in the late 20th Century? And how come China dominates it now?
The answer is the industrial stack. Every few generations, the stack changes. It began with steel, steam, and railroads, moved to complex pistons, combustion, and hydraulics, and is now composed of batteries, software, artificial intelligence, semiconductors, and electric motors. Every industrial product is built on these stacks.
And so China’s mastery of the latest stack, through its deep supply chains, vertical integration, and human capital, translates into being world-class at phones, drones, humanoid robots, and electric vehicles. China makes the best batteries, the best electric motors, and is increasingly getting better at software and semiconductors, and so it makes these great widgets.
Source: International Organization of Motor Vehicle Manufacturers
Ford and Volkswagen were organizations built on the old industrial stack, so they do poorly with EVs. Tesla was built on the new stack, so it can do everything it does today: EVs, robots, and even solar. Every old company inevitably becomes irrelevant as it fights against inertia, shackled by its past. New companies, natives in the new industrial stack, take their place and reimagine everything.
This stack may be our final stack. This is the stack on which superintelligence will be built. Building superintelligence will use copious amounts of energy (renewables with battery storage can scale fast), millions of semiconductors, cutting-edge knowledge of software and artificial intelligence, and potentially robots for constructing datacenters.
Therefore, the mastery of this stack is a prerequisite for building humanity’s final invention. This makes it not just an economic imperative, but a political one. A country without mastery of this new industrial stack cannot create or run its own artificial intelligence, and so it is merely a vassal of those who can. It cannot make its cities vertical, as new-age mobility is built on that same stack. A country without this stack simply cannot live in the future.
Therefore, every country must master this stack. Countries like India are in a position to achieve exactly that. It has domestic demand, cheap energy, and capable conglomerates which can make the capital expenditure necessary to develop world-beating operations in the new industrial stack. As the world searches for stability, the chaos in China and America benefits the new challengers.