Apr 18, 2010
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Can Virtual Manufacturing Save Detroit?
Thomas Friedman has an inspiring article in the NY Times on a virtual start-up. Virtual companies are nothing new in the world of software and services. What’s new here, though, is that this company is a virtual manufacturing company.
“‘Three guys with laptops’ used to describe a Web startup,’” writes Chris Anderson from Wired Magazine (as cited by Friedman). “Now it describes a hardware company, too” thanks to “the availability of common platforms, easy-to-use tools, Web-based collaboration, and Internet distribution. … Global supply chains have become scale-free, able to serve the small as well as the large, the garage inventor and Sony.”
In the world of the virtual manufacturing company, production capacity and manufacturing flow seamlessly to the cheapest source, much like programming services have in the world of software development. Producing a widget is no longer that special. It can be done in many places at a relatively low cost. Like the name of the essay in Wired Magazine says “Atoms are the New Bits.”
And this is the kind of thing that can actually save manufacturing-based economies like Detroit.
What?
You may ask how it could possibly be a good thing that other countries or regions can produce high quality goods at cheaper prices and that companies can by from them so easily. How is that good for Detroit?
In a word: Value.
You have to look at where the value is. Where wealth is created, where the unique advantages is. It isn’t any longer in producing run of the mill goods. The value is in creating a really great product.
Virtual manufacturing means that a clever innovator with a good idea can experiment with a new product and produce that product for a lot less money than it used to take. Engineers and product managers can get a new ventures off the ground with much less capital and much faster than ever before. It means that the amount of risk involved in manufacturing is less than its ever been.
It means its easier than ever to create a valuable product. It is easier than ever to create a product that is truly remarkable.
All of that is great news for Detroit.
It used to be that only software and service businesses were cheap and easy to get off the ground. From the 1970’s on the remarkable breakthroughs were in software or innovative financial products. That helped create the success stories of Silicon Valley, Seattle and Wall Street.
The cost of getting a manufactured product off the ground was high. It made it risky to invest in or to quit the day job, as it were, to give it a try.
But now, that has all changed. And that plays into the strength of the people in Detroit.
As the article states, this can be a huge engine for growth in the United States.
Invented and financed in the West, further developed and tested in the East and rolled out in both markets.
Inventing and managing the lifecycle of a manufactured product is right up Detroit’s alley. And not just Silicon Alley. I’m talking about the straight, old-fashioned grease covered alley of Detroit’s past. The alley filled with mechanics, backyard tinkerers and engineers.
If mechanics, engineers and tinkerers can dream it up, it can now become a reality. And if there’s one thing we have lot of in Detroit -its mechanics, engineers and tinkerers.
It is up to them, and to each one of us, to help make it a reality.
