American Manufacturing Re-Energized

FILE - In this Thursday, March 15, 2012 photo provided by Red Bull Stratos, Felix Baumgartner prepares to jump during the fir
FILE - In this Thursday, March 15, 2012 photo provided by Red Bull Stratos, Felix Baumgartner prepares to jump during the first manned test flight for Red Bull Stratos over Roswell, N.M. On Monday, Oct. 8, 2012 over New Mexico, Baumgartner will attempt to jump higher and faster in a free fall than anyone ever before and become the first skydiver to break the sound barrier. (AP Photo/Red Bull Stratos, Jay Nemeth)

A Small Team of Passionate Engineers and an Energy Drink Company Reveal How the Game Is About to Change

In the most vivid way possible, we witnessed a passing of the innovation torch last weekend. Saturday, I rode my bike to South Central L.A. to watch pace shuttle Endeavor nose its way through the city streets, past cheering onlookers on its final mission to retirement at the California Science Center.

The next morning, as the orbiter pulled into its final resting place, I was glued to YouTube, watching Felix Baumgartner take the jump of his life from space -- not only pushing the boundaries of bravery, but pushing the edge of our scientific knowledge about how to protect humans in space flight.

Yet this groundbreaking project was not the result of development efforts from NASA or a large aerospace contractor. Instead, it sprang forth from a small team, with all design, engineering, and fabrication done by a small local company called Sage Cheshire right here in Southern California, and was supported by a forward-thinking private beverage company, Red Bull.

Red Bull Stratos is one example of how the face of manufacturing is changing -- fast. It no longer takes hundreds of millions of dollars of investment in a factory to bring a product to market. And this bodes well for the future of innovation.

Today, I hosted a discussion with editor-in-chief of Wired magazine, Chris Anderson, at a Live Talks Business Forum in downtown L.A., and the timing couldn't have been more apt. We talked about his brand new book Makers: The New Industrial Revolution, and discussed the future of manufacturing in the U.S. and globally.

Anderson is best known for his books about how the web has revolutionized information industries, including The Long Tail; Why the Future of Business Is Selling Less of More, and Free: How Today's Smartest Businesses Profit by Giving Something for Nothing. But in this latest book, he explores what happens when you apply the scale of the web, and the democratization of tools and platforms, to the physical world.

Today, with not much more than a 3D printer, a credit card, and an Internet connection, an aspiring entrepreneur can build a prototype on the desktop, ship off CAD drawings to get all of the parts built, and launch a business. Low-cost tools like MakerBots and Arduinos, membership-based prototyping facilities like TechShop, novel funding mechanisms like Kickstarter, new platforms to connect entrepreneurs with global supply chains, and online marketplaces all make building, manufacturing, and marketing a new product within the reach of any inventor.

And we're not just talking about garage businesses, either. You've probably seen those gadgets that allow small vendors to swipe credit cards and take payment over a mobile device. With relatively little capital, startup company Square has not only launched a successful business; it has empowered small local merchants and disrupted banks' relationships with customers across the globe.

And how about the iconic automotive industry? Local Motors in Chandler, Arizona used open-source development, online design competitions, micro-factories, and customer-assisted manufacturing to design and ship their first community-designed vehicle last year -- in about the same time it takes for General Motors to redesign a piece of trim.

Innovation is often identified with the digital world, but the vast majority of the economy still comprises physical things. This makes the prospect of manufacturing jobs being off-shored all the more frightening.

But although most of our traditional manufacturing jobs won't come back, we shouldn't forget that America still has the largest manufacturing base in the world and our productivity can't be surpassed. The need for local and flexible manufacturing as new upstart businesses like Square and Local Motors grow can provide a huge opportunity for the U.S. to recapture a critical and growing high value-add segment of the manufacturing sector.

Besides, keeping production local is about more than manufacturing jobs. Production is a national security issue; as a country, we cannot afford to have our means of production controlled overseas. It's also an innovation issue; if our products are only built overseas, the innovation process starts to get outsourced as well. And this is when the engine of our economy really gets into trouble.

So instead of talking about the fruitless pursuit of bringing low wage jobs back, we need to talk about how to help accelerate a new renaissance of manufacturing and embrace the opportunity. We need to better structure local networks of suppliers, expand support for R&D in advanced manufacturing, find new mechanisms to finance the growth of these industries, and retrain our workforce for this new reality.

We also need to celebrate that manufacturing can be sexy again.

Ten years ago, who would have thought that space exploration could be pioneered by a small upstart team and an energy drink company? This might be the most vivid sign yet that the game is about to change.