The advances in microelectronics and communications will greatly accelerate the automation of the production of goods and services. In one sense automation using microelectronics and communications advances is simply the continuation of a trend to increase the amount of capital per worker to obtain higher labor productivity. In another sense the new type of automation is fundamentally different. Human skills are being incorporated into software. To consider the advances in automation we will first survey the current state of automation in manufacturing. Then we will consider how international competition is creating incentives to automate. Advances in automation are innovations. The final aspect to consider is the problems in this type of innovation.