Notes

First Drafts, Conversations, Stories in Progress

Does the Maker Movement Matter?
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In posts in the American Futures series, James Fallows argued that the “Maker Revolution” offered new opportunities for American entrepreneurs, inventors and designers, customers, and workers. Readers report their experiences with this part of the new digitally transformed economy. (If you’d like to add examples, please write us here.)

Show 2 Newer Notes

The Surprising Problem With U.S. Manufacturing: It's Creating Too Many Jobs

9th grade student Franke Le, left, telling other students about the advanced manufacturing equipment on which he had already received a special-proficiency certificate, at Indian Springs High School in San Bernardino, California, last year. (James Fallows)

An ongoing theme of our reports from “career technical” schools—like this high school in Georgia and this community college in Mississippi and these high schools and tech-training centers in California and South Carolina, and these colleges in Vermont and Maine—is that for people with appropriate training, medium-wage skilled jobs actually exist:

  • At this moment in U.S. economic history, the demand for people who can work as high-end repair technicians, in construction trades, in manufacturing factories, in high-end shipping and logistics jobs, and in other fields is relatively strong.
  • And at this moment in technical and economic history, the “maker tools” that have democratized the process of hardware innovation are fostering the growth of the new companies that (according to the important Kauffman foundation report, discussed here) account for nearly all the net job creation in the country. 

That’s background for an interesting new column by Conor Sen in Bloomberg View. The title is the sobering-sounding “The End of the U.S. Manufacturing Renaissance (such as it was).” But the trends it reports are very different from what you might infer from that headline.

Job openings in manufacturing are at a 15-year high. Layoffs are at a long-term low. Wages are rising faster in manufacturing than in the economy as a whole. The unemployment rate in manufacturing is below the overall average. Please go to the item for the full presentation, but here is one of several representative charts, showing continued recovery after the crash of 2008.

From Bloomberg View, with BLS data.

 

Americans don’t make things any more? Tell it to (from left) First Joe, Pauly, and Capt. Jerry, who are building the Mon Tiki Largo on Montauk, Long Island.  You can’t make a 100-foot boat with 3-D printers, yet.  (David Ryan)

After these two articles on why the Maker Movement matters — “Part 1, the Tools Revolution” and “Part 2, Agility,” I’ve received a lot of replies from people in the middle of this transformation in existing companies, or new ones they are starting.

Let’s kick off with two. First, from reader David Ryan, a one-time filmmaker who in recent years has become a boat-builder and charter-boat captain on Montauk, Long Island. He responds to the observation by Liam Casey (“Mr. China”), in this WSJ interview by Matthew Kassell, about why some manufacturing is coming back to the United States. Ryan writes:

"Where it’s made doesn’t really matter, when you look at the margin breakdown—you mostly win and lose in the selling, not in the making." [So Liam Casey says.]

What I learned financing, producing, and distributing my films is that even if you are very good at what you do and are unopposed in the market, no less than 30% of your cumulative enterprise effort will go into marketing,promotion, and sales. And that's if you are very good and unopposed. If you're merely good, or have competitors, or both, the percentage will be higher. 

Much of the reason for this higher than in he past percentage (remember, "if you build a better mouse trap...."?) is a result of the profound democratization of communications tools. As previously mentioned, this democratization has been a boon to peer-to-peer communication (videos for fixing sanders and smartphones) but my own opinion is it hasn't made the task of marketing, promotion, and sales any easier (when everyone is super, no one is super) and this would seem to be supported by Mr. China's assertion about where the battle is won and lost. 

Because of this and other things I believe I perceive about the effect of the (hyper) democratization of communication tools, I am somewhat more leery, perhaps even bearish about the effect that the democratization of manufacture tools can and will have on that sector of our economy and society. 

The Mon Tiki Largo under construction. (David Ryan)

Speaking of manufacturing, Mon Tiki Largo [the next charter boat Ryan is building, shown above] is scheduled to launch in about 10 days. No one's 3-D printing 100 passenger sailing catamarans --not yet at least!

*** 

Latest cohort of Highway 1 fellows — hardware entrepreneurs at Liam Casey’s startup center in San Francisco.

Following this earlier post about the significance of the Maker Movement, and before an upcoming report on an unusual and significant maker/startup space in Louisville, I want to mention a very interesting WSJ interview by Matthew Kassel with my friend Liam Casey. It was Liam whom I presented, only half jokingly, as “Mr. China” when describing his role as connector of world commerce to Chinese manufacturing, back in 2007. More recently, I mentioned his shift of some manufacturing activity back from China to the San Francisco area, here

Some samples of Liam’s comments now, which bear on the U.S. manufacturing revival (and challenges thereto):

WSJ: If “geography is history,” do you think it’s possible—or even desirable—to reproduce these international supply chains in, say, the U.S.?

MR. CASEY: … I don’t care if I’m producing a product in California, Texas, North Carolina, Shenzhen or somewhere in Europe, once I’ve got access to raw materials for producing the product, a skilled workforce to make the product, and a global logistics platform to be able to move the product from the source directly to a consumer anywhere in the world.

Where it’s made doesn’t really matter, when you look at the margin breakdown—you mostly win and lose in the selling, not in the making.

And

MR. CASEY: We’re working on a very high-profile product in San Francisco. We’re doing all the engineering and development, and we are trying very hard to assemble it in North America.

Because of the crowdfunding campaign, we have the data—we know that there’s an appetite for the product—and the raw material is coming from the region, so we can actually build the product there.

Two years ago, we wouldn't have considered making it in the U.S. But because we have all the data from the crowdfunding—we have good information that can help the factory plan and schedule the orders over a period of time—we’re actually excited about this project. We think we can build it in the U.S.

I always found Liam to be a few months ahead of what “everyone knows” about global business. Think of what he’s saying when you hear the next speech about “we don’t / can’t build things” in the U.S. anymore.

Don’t? Only true in some cases. Can’t? Not true at all.