The New Industrial Revolution

I spent the last few days at SXSW here in Austin, where I played around with hundreds of gadgets and electronics from the Maker Fair. If you have never been to one of these expositions, I would highly recommend you check one out. You will be blown away by what is taking place in the field of technology and the changes that are taking place in manufacturing.

3d printer

Over the last few years, there has been a dramatic improvement in the quality and durability of electronic components and plastics. Engineers, artists and creators now have access to three dimensional printers that can produce physical products. We have gone from printing words via printers to printing three dimensional objects by the same process! If you have a machine and the blueprints, which can be found online, you can literally make cups, art, jewelry, parts, even guns… just to name a few. The designs are open sourced, so if you need to make a certain cup you can go online to see if somebody already has uploaded one on the web and then download the file and make your own. In addition, you can create your own design for a product and then upload it online for other people to use.

Over the last thirty years, the U.S has become a laggard in manufacturing for a variety of reasons.  Higher wages, a more onerous regulatory environment and a stronger currency, all of which have made manufacturing physical products here in the U.S almost prohibitive.  However, with the onslaught of 3D printing and some revolutionary changes taking place in the space and auto sector, manufacturing is enjoying a renaissance here in the U.S

At Tesla Motors, founded by Elon Musk, they are starting to produce cars in the U.S. and manufacturing their component parts here as well. What Musk discovered is that most car makers have hundreds of suppliers located all over the world, which makes implementing changes a process of dealing with a myriad of long distance suppliers. Frustrated by the lag time and inefficiencies of such procedures, Musk decided to make and manufacture most of the products right at his plant in California.  As a result, he has been able to speed up production of his autos and make  adjustments quickly.

Musk believes this approach has saved him a fortune.  Older car companies now complain that because he was able to start a car company from scratch, he has been able to revolutionize the manufacturing process. Imagine that!  Car companies are upset that Musk is able to manufacture the majority of his parts here in the U.S.  It was only a few years ago that the same car companies were saying that it was impossible to manufacture cars here in the U.S due to the high costs.

At SpaceX, another company founded by Elon Musk, they have been able to drastically lower the cost of manufacturing rockets. Part of the philosophy of his design and manufacturing strategy is to have the engineers work side by side with the builders of the rockets.  This process allows the engineers to see and fully understand what their designs are like when brought to life. Previously, it was unheard of  to have engineers and builders working side by side; but, SpaceX has made it work and has been able to revitalize the U.S. space industry while simultaneously creating thousands of jobs. One of the main manufacturing achievements of SpaceX has been in being able to weld large sheets of metal without rivets. This advancement not only makes the rockets safer it is also an innovation that will soon accrue to the benefit of other industries as well.

Combine the “Do It Yourself (DIY) Movement” and 3D printing, along with some of the breakthroughs taking place at SpaceX and Tesla Motors, and the U.S has good reason to be optimistic about the resurgence of our manufacturing sector. We have talented engineers and scientists that are revolutionizing many business and technology sectors. One only need look at the gas and oil sector where geologist and engineers, through fracking, changed the whole scope of the extraction process and its end product productivity. This new method of extracting oil has enabled the U.S  to garner untold amounts of oil which had been previously unreachable.

Over the past eight years, the problem facing U.S. businesses, and therefore the GDP, has been the restrictive regulatory policies implemented by the Obama Administration.  These crushing regulations and policies, such as Dodd-Frank and Obamacare, have hamstrung U.S. growth.  I believe, given a change of direction by the Federal government in it’s approach to private sector regulation and taxation, the U.S. economy could well see growth rates in GDP above 3%.  The private sector has made some major strides in manufacturing and technology that I believe could get the U.S economy back on track and begin to create many of those jobs that have been lost if the Federal government will just remove the stranglehold it has placed upon the development and operation of free enterprise.

If not, my prayer is that the government at least steer clear of this truly amazing innovation revolution and allow the U.S. to, once again, be the global leader in manufacturing and an example of free market capitalism functioning at its best.


Steve Clark