Epilogue: The New Shape of the Industrial World The West can rise again.

What kind of economic future does the rise of the Maker Move­ment predict?

Is it one where Western countries like the United States regain their lost manufacturing might, but rather than with a few big indus­trial giants, they spawn thousands of smaller firms picking off niche markets?

Remember that line from Cory Doctorow’s book:

The days of companies with names like General Electric and General Mills and General Motors are over.

Call this Option One: the commercial Web model, one defined by low barriers to entry, rapid innovation and intense entrepreneurship. Is this the future of manufacturing, too?

Or is it one more like Option Two: the status quo, where the world’s biggest factories remain in Asia, while Western firms focus only on high-end products where costs matter less than quality and market insights (or just make those products that are hard to ship, like cars and refrigerators)?

Or could it even become more like Option Three: the real Web, where the majority of content created is by amateurs, without any intention of creating a business or making money at all?

This is a future where the Maker Movement is more about self- sufficiency—making stuff for our own use—than it is about building businesses. It is one that hews even closer to the original ideals of the Homebrew Computing Club and The Whole Earth Catalog. The idea, then, was not to create big companies, but rather to free ourselvesfrom big companies.

Every time I download some design from the Web and print a something on my MakerBot without going to a store or otherwise engaging in any comercial transaction at all, I wonder how long it will take before more of the world of atoms becomes free, like most of the world of bits already has.

Take, for instance, Open Source Ecology, which is an online community creating a “Global Village Construction Set.” These are open-source designs for the fifty machines necessary to “build a small civilization with modern comforts,” ranging from a small sawmill to a micro-combine for harvesting.

This hearkens back to the Israeli kibbutz model of self-sufficiency, which was forged in a period of need and philosophical belief in col­lective action, or to Gandhi’s model of village industrial indepen­dence in India. Of course we’re not all going to grow our own food or easily give up the virtues of a well-stocked shopping mall. But in a future where more things can be fabricated on demand, as opposed to manufactured, shipped, stored, and sold, you can see the opportunity for an industrial economy that is less driven by comercial interests and more by social ones, just as open source software already is.

Which one of these manufacturing futures is most likely for the West?

My money is on Option One: something closer to today’s com­mercial Web—ever-accelerating entrepreneurship and innovation with ever-dropping barriers to entry. In this future, the pendulum

Epilogue: The New Shape of the Industrial World ∣ 233 of manufacturing will swing back to the most nimble developed countries, despite their relatively expensive labor. Globalization and communications flattened the world once, drawing manufacturing to low-cost labor in the developing world, a process first observed in the nineteenth century by David Ricardo as the triumph of “comparative advantage.”

Now we are flattening it again, but along a different dimension. Thanks to automation, labor costs are a small and shrinking fraction of the cost of making something. For electronics, they can be just a few percent. At that point, other factors, from transportation costs to time, start to matter more.

For example, the 3D Robotics factory in San Diego buys its elec­tronics manufacturing equipment and components for essentially the same price our Chinese competitors do. We pay our workers better, but the gap is shrinking: around fifteen dollars an hour in San Diego ($2,400 a month) compared with around $400 a month at Foxconn, the huge manufacturing company in China that makes the iPhone, iPad, and electronics for many other leading companies. Because of competition, rising skills, and pressure from labor activists, the sala­ries in Shenzhen have risen 50 percent in the past five years, while manufacturing salaries have remained close to flat in the West.

In our new 3D Robotics factory in Tijuana, twenty minutes away from our factory in San Diego, the salaries are about half the U.S. rate ($1,200 a month), which is just three times the price of China. For one of our products, such as a $200 autopilot board, the difference in labor costs between making it in Mexico and making it in China amounts to less than a dollar, or about one percent of the product’s cost (and half a percent of its retail price). Other costs, such as rent and electricity, are even closer to Chinese levels.

In short, for products that can be made robotically, which is more and more of them, the usual global economic calculus of “labor arbi­trage” is becoming less and less important. Even Chinese firms are moving toward more robotic production, not just to insulate firms from rising salary pressure, but also to avoid the labor condition controversies that dogged Foxconn and Apple for the past few years. Not everything can automated, of course, and there is a still a lot of handwork in your iPad. But industrial robots are getting cheaper and better all the time, while humans are getting more expensive.

So the decision on where to make things is become less about sala­ries. Yet China still has a sizable advantage in everything from elec­tronics to toys and textiles, as the labels on your clothes and gadgets prove.

At this point, you can start to see the shape of the twenty-first- century manufacturing economy.

On the product development side, the Maker Movement tilts the balance toward the cultures with the best innovation model, not the cheapest labor. Societies that have embraced “co-creation,” or community-based development, win. They are unbeatable for finding and harnessing the best talent and more motivated people in any do­main. Look for those countries where the most vibrant Web commu­nities flourish and the most innovative Web companies grow. Those are the values that predict success in any twenty-first-century market.

On the manufacturing side, the spread and sophistication of au­tomation will increasingly level the playing field between East and West, as will the growing direct and indirect costs of long and brittle supply chains. Every time the price of diesel fuel goes up, so does the price of sending a container from China. Volcanoes in Iceland and pirates off the coast of Somalia—these are among the risk factors in a global supply chain, and are arguments for making goods closer to their point of consumption. We live in an increasingly volatile and

Epilogue=TheNewshapeofthelndustrialWorld ∣ 235 unpredictable world, and everything from political uncertainly to currency fluctuations can erase the cost advantages of offshoring in a flash.

But don’t think that this means a return to the simple glory days of Detroit or a day when factory jobs were a safe path to the middle class.

General Motors and General Electric aren’t disappearing, but then again, neither did AT&T and BT as the Web arose. As with the Long Tail, the new era will not mark the end of the blockbuster, but the end of the monopoly of the blockbuster. So, too, for manufacturing. What we will see is simply more. More innovation, in more places, from more people, focused on more narrow niches. Collectively, all these new producers will reinvent the industrial economy, often with just a few thousand units at a time—but exactly the right products for an increasingly discriminating consumer. For every Foxconn with a half-million employees making mass-market goods, there will be thousands of new companies with just a few targeting niches. To­gether they will reshape the world of making.

Welcome to the Long Tail of Things.