Maker Belt: Future of US Manufacturing

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[Editor’s Note: there are a number of reasons why, unlike many in the media and think tanks, we haven’t written off the “West” including the US. The Maker Revolution is one of them. This is a great article. Benjamin J. Butler]

Welcome to the New South!

What do bourbon, nuclear energy, and modern transportation have in common? They were developed, produced and manufactured in America’s heartland – a broad swath of states from Pennsylvania to Wisconsin and Michigan to Tennessee. What was once America’s original manufacturing heartland, is sometimes colloquially called the “Rust Belt” because of declining 20th century industries.

But did you know that this region is now beginning to power a new industrial paradigm using exponential technologies to build autonomous buses, 3D printed submarines, and even artificial hearts? This region isn’t your grandfather’s Rust Belt, but rather what we’re calling America’s new “Maker Belt.”

In colonial and early American history, Kentucky was the original “western” state where nearly 300,000 pioneers trekked west across the Cumberland Gap in the Appalachian Mountains from the Atlantic Seaboard in search of greener pastures, new homesteads and big dreams. In the local native Iroquois language, Kentucky meant “land of tomorrow.” And in true pioneer form, it is now a regional hotbed for the future of manufacturing in America, changing how products are designed, digitized, developed, and distributed.

Over the last week, we traversed from Charlotte to Chicago, crossing and spending significant time in Louisville, Kentucky and Knoxville, Tennessee, meeting with leading startups, institutions, and civic leaders creating the future of American manufacturing using cutting edge technologies and manufacturing strategies.

Long before the term “maker” became cool, these areas developed very strong “maker cultures.” These are the places in America that historically “made stuff” and still do, albeit using new manufacturing technologies, strategies and partnerships. Let us take you on a journey on part of the “Maker Belt” from Knoxville to Louisville to share what we learned about the future of manufacturing and product development in America.

Knoxville, Tennessee

We first stopped at Oak Ridge National Labs in Knoxville – one of the pre-eminent national laboratories of the Department of Energy. ORNL was instrumental in developing nuclear energy as part of the Manhattan Project in the 1940s, and attracted hundreds of scientists to a small secret town in Appalachia to solve big problems. This legacy of doing hard things has translated into a technical community with deep experience and knowledge. 70 years later, ORNL hosts one of the fastest super computers in the world, the pre-eminent BAAM (Big Area Additive Manufacturing) 3D printer in the US, and the world’s most flexible carbon fiber semi-production facility.

Knoxville is an attractive destination for additive manufacturing startups partially because of this regional ecosystem anchored by ORNL. One cutting edge startup – Local Motors – is 3D printing cars and autonomous buses. Founded in 2007 to make specialty street vehicles, Local Motors has pioneered how to use communities to co-create designs, experiment locally and manufacture in small micro-factories. Their newest development is Olli – a 3D-printed autonomous electric bus used for last mile travel on corporate campuses, theme parks and local municipalities. By 3D printing Olli, Local Motors can streamline the manufacturing process from 2500 parts down to 175 parts, reduce build time from 275 hours down to 4 man-hours, and drive costs from $40k down to $8k. Put these process reductions together and we’re witnessing an exponential improvement in light manufacturing! As the Mayor of Knoxville told us, either we drive the technology or the technology drives us. In this case, Local Motors’ Olli is driving us, but we’re enabling the platform using AI, sensors and 3D printing!

Louisville, Kentucky

As the bourbon capital of the world, Louisville’s expertise in biofermentation has made it one of the best places for 3D printed biological parts and experimenting with biological manufacturing. While in Louisville, we visited the Cardiovascular Innovation Institute (CII), which pioneered the total artificial heart in the early 2000s. Now they are developing groundbreaking technologies to print bio-parts like bones, cells, tissues, and one day even organs like “bioficial” hearts. And with UPS’s global air hub – UPS WorldPort – just minutes away (and within a 3-day drive of 80% of the US population), CII can 3D print biological parts on-demand and then airlift it overnight to anywhere in the world. No wonder the federal government recently selected CII as America’s first official “biofoundry”. In the future, medical device surgery will begin not in the operating room, but in an additive manufacturing biofoundry like CII!

Perhaps the most eye-opening visit about the future of product development was to GE Appliance’s FirstBuild facility in Louisville. Given the traditional long product development cycle for “white goods” (up to 4 years), GE Appliances founded FirstBuild 3 years ago to experiment at the edge of the company and accelerate time to market. FirstBuild accomplished this by using crowds to co-create new products in a stale industry and focusing on small-batch manufacturing (less than 1000 pieces). Once they validate the market, they are able to transition the product to the corporate parent factory and scale up to 100,000+ units.

FirstBuild’s success has been partially based on its unique “microfactory” and co-creation model. The microfactory is a physical space where over 10,000 community members can collaborate through a 3-stage product development process. The first “Design” stage invites the community into the facility to co-create through open innovation. It doesn’t matter if you’re a customer, vendor, or even competitor, you’re welcome to co-create at FirstBuild – the philosophy is that abundant ideas are more valuable than thinking in scarcities of intellectual property, design, and ownership. In the second “Build” stage, products are rapidly developed and produced in small batches in the onsite microfactory before scaling into large-scale manufacturing. Because FirstBuild wants to maximize its minimal resources, it constrains product development to $50k per product and requires all products to be pre-sold via crowdfunding campaigns in the third “Sell” stage to validate immediate product demand. And to date, their four crowdfunding campaigns have been the most successful enterprise crowdfunding campaigns ever.

The biggest takeaway from FirstBuild is that an open innovation manufacturing model pursues possibilities, rather than focusing on processes. Traditional manufacturing methodologies might maximize profit, and reward reliability, execution, and certainty –very important when scaling – but they constrain creativity and early stage product development innovation. FirstBuild’s microfactory model allows for constant hardware iteration and faster feedback cycles from critical enthusiasts and early consumers. Today’s millennial generation gets insulted when we hold back information from them; they are constantly plugged in and yearn for ways to connect. So invite them into your manufacturing process like FirstBuild did, and you will be surprised by their creativity; they may even develop into a new customer base that has eluded established brands.

Lessons on Civic Innovation

So what has enabled this burgeoning manufacturing ecosystem to develop and thrive in the Maker Belt? Sound public policies and leadership in civic innovation. Louisville was the first city in America to create a “Chief of Civic Innovation”, whose office would crowdsource citizen ideas to solve urban problems. The municipal government recognized that lots of expertise lay outside the confines of City Hall, so they developed a platform to listen to all Louisville citizens; including treating its largest companies as key (because they are the largest tax base supporters). The city leadership also created an economic development strategy that moved away from traditional industry clusters, and focused exclusively on a couple exponential technologies that would make their cities unique – in this case additive manufacturing and crowd co-creation.

Louisville and Knoxville are globally relevant but still small enough to get things done. To succeed as small and medium regional manufacturing hubs, they have pursued 4 key necessary ingredients: 1) strong partnerships with other academic and research institutions with deep specialized knowledge: Knoxville with ORNL and the University of Tennessee; and Louisville with the University of Louisville; 2) government supportfor basic research and a strategy to commercialize innovation; 3) an open approach to innovation and experimentation, and 4) thriving cultural and artistic communitieswith accessible housing for young entrepreneurs.

This last point is important. These cities recognize that innovation isn’t just technical, but dependent on creativity broadly defined, including having a community of artists and artisans. Louisville’s downtown core was revitalized by the arrival of the 21C Museum Hotel in 2006, which renovated a historic structure and invited the public into the hotel lobby gallery to experience art for free. And its NuLu neighborhood has developed into a neighborhood hub for artisans – including glass blowers, small-scale distilleries, and craftsmen – thanks in part to public-private real estate partnerships. For the first time in a couple decades, downtown Louisville is a place where creativity thrives. If your city wants to emulate these cities’ regional success, pursue these 4 pillars, and make sure you encourage artistic creativity alongside technical and business model innovation.

America’s Agile Manufacturing Future

So what does the Maker Belt tell us about the future of manufacturing in America? In the very near future, advances in generative design will allow product designers to use machine learning algorithms to design biological-looking solutions to complex manufacturing problems – ideas that we as humans never thought creatively possible! To leverage these 3D printing algorithms, we’ll need to process trillions of data points, and compress the data across tubes. And by using crowds to co-create with our communities of solvers, designers, and customers, we’ll decrease product cycle times from years to months and even weeks, thus making new ideas much more accessible and valuable.

Most importantly, this new industrial paradigm will require stakeholders to develop unique capabilities and form partnerships. Technology is moving too quickly for any one organization to go it all alone, and to succeed, you need to form partnerships while simultaneously becoming more agile (to react to raw material prices and availability, and consumer demand changes). The flip side is that partnerships take time to develop and hash out in the value chain, and can slow down organizational efficiency. So you have to decide if you want to prioritize manufacturing 1) efficiency and scale, or 2) innovation and experimentation. It’s possible to do both under the same corporate umbrella, so long as they are in different business units with different metrics for success (as GE Appliances has done with FirstBuild). But you can’t accomplish both goals with the same teams at the same time. What’s your manufacturing innovation priority?

And if you’re not based in regional hotspots of industrial creativity, find a way to partner with institutions in the Maker Belt, or others like it. After all, there’s a reason why GE moved its corporate headquarters from suburban Connecticut to Boston: it’s shifting from being an industrial manufacturer to a digitally driven one, and so it wants to be closer to a new density of technology innovators. Companies and regions that follow the same strategy as GE are poised to succeed in the 21st century industrial paradigm.

American manufacturing has certainly taken a hit over the last couple decades with broad de-industrialization and offshoring, but is now ripe for a comeback thanks to new technologies and public policies, as we’ve seen across the Maker Belt in Louisville and Knoxville. To build this manufacturing future, we need to teach additive manufacturing skills to a workforce that doesn’t yet know how to use it broadly. In a recent review of job posts on Indeed.com, 35% of all engineering jobs posted in the last 30 days required additive manufacturing skills as the most sought after technical skill. Many of these jobs pay in excess of $100k per year – and are unfilled because of skills shortages. What accentuates the problem is that there aren’t enough practitioners to teach these skills to a willing workforce! If we can build up this 3D printing machining capability, we’re likely to create thriving small manufacturing regions throughout the Maker Belt and beyond and build a workforce ready for this new 21st century industrial paradigm.

 

Originally published at https://www.linkedin.com/pulse/maker-belt-future-american-manufacturing-kian-gohar

 

 

Kian Gohar
Kian Gohar
Exponential Entrepreneur & Innovation Speaker. Exec Director, XPRIZE & Singularity U.

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