Manufacturing entrepreneurs shaking up the traditional factory

Here is a short article on the future of manufacturing from the International Economic Development Council. It speaks to where things are headed, and some of the obstacles to be overcome.

Today’s typical startup is a small tech company that requires little expensive material but demands a high skill set in its employees. The typical manufacturer is located in a large factory with expensive equipment and requires few advanced skills from its workers. Now, these two worlds are coming together with the rise of the manufacturing startup.

What has prevented more small-scale, innovative manufacturers from taking off until now? The perception has been that “The capital demands are too high. The equipment needs are prohibitive. The work of developing a product, pulling together suppliers, and then distributing a physical product to actual sellers is daunting, to say the least,” according Mark Muro of the Brookings Institution (Wall Street Journal).

The “hardware renaissance” is slowly eliminating these hindrances, as young companies are finding markets for innovative physical goods–not just software apps. 3-D printing has been a game changer, in addition to the falling price of microchips, sensors, and other components, all of which have lowered costs for small firms.

One primary problem for manufacturing entrepreneurs is finding a factory willing to make a product on a much smaller scale in which it typically operates (BBC). Some incubators connect manufacturing entrepreneurs to large factories willing to take on smaller projects as part of a long-term growth strategy. Some startups raise money through crowdfunding then have middlemen connect them with producers overseas.

Maker spacers are another tool for scaling innovative manufacturers and act much like a traditional incubator– just with more fun tools. Members typically pay a membership fee to use the shared space and equipment to experiment with new products. Marker spaces have turned many a hobbyist into a business owner. Southwest Baltimore is embracing the trend and plans to create maker spaces in vacant factories as a means to both reduce unemployment and revitalize its inner city (CityLab).

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