Many successful business leaders have championed this sector for years; entrepreneurs such as JML founder and economist John Mills, Marc Raibert of Boston Dynamics and Sir James Dyson, whose vacuum cleaners revolutionised the industry.
Manufacturing has had a tough time in the western world over the last few decades. But new technologies and renewed support for the sector are starting to make small, agile and light manufacturing appealing for entrepreneurs again.
But why is manufacturing on the up again? And is it really a sector with startup opportunities?
The manufacturing sector is huge and growing
According to Columbia Business School, the manufacturing market worldwide topped $38 trillion in 2018. Much of that is heavy industries concentrated in the US, China and Asia. But the rest of the sector spans a vast array of different disciplines, most of which remain relatively untouched by disruptive startups. This gives entrepreneurs with the right skills and determination a big open goal.
Over the last few years we’ve seen a steady increase in robotics startups, including warehouse-robot company 6 River Systems, founded by Jerome Dubois and Rylan Hamilton in 2015, and Fetch Robotics founded by Steve Hogan in 2014. But robotics is the flagship sector; the one that grabs all the headlines, the majority of manufacturing startups exist and grow outside the spotlight.
New technologies are creating new demand
Entrepreneurs are always quick to seize on the application of new technologies, and thanks to recent advances, manufacturing is going through a revolution right now. Tech such as digital printing, AI, smartglass, Augmented Reality, 3D scanning, and Blockchain are all having a big impact on the space.
But two areas that are attracting increasing numbers of startups are supply chain management and real-time production metrics. Most factories operate on a just-in-time basis. This means they only hold enough parts for, say, one day’s production. Some of the world’s largest factories, such as the Honda car plant in the UK only keeps one hour’s worth of parts for its production lines in stock.
This means that the supply chain must be perfect and production on site has to be as streamlined as possible. Tech startups are creating systems and services that help manufacturers keep the lights on and keep profitable. One of these is Berlin-based Sennder. Founded in 2015, it has developed a logistics platform and road freight marketplace that connects manufacturing customers with commercial freight shippers, speeding up deliveries. The startup recently secured more than €62m in a Series C funding round.
London-based Flexciton is another startup supporting the future of manufacturing. They have developed a tool that uses artificial intelligence to optimise multi-step production lines, making the production planning and scheduling up to 30-times faster.
Manufacturing in small quantities for consumers is rising
We’re living in an age where public concerns about the climate and ethical production are growing fast. People want to know who made their goods, where they are manufactured, and they want to understand the company backstory. They are also very keen to discover new home-grown brands with personality. This gives smaller consumer manufacturers incredible power.
Take British shoe-designer LANX for example. A proudly British brand, born in Lancashire in the North of England, LANX was founded by Marco Vaghetti in early 2018. The brand is purposefully small and manufacturers locally. It has quickly captured the hearts and imagination of customers. Another brand, Frog Bikes, based in Wales have developed a range of bicycles manufactured in their own factory and built specifically for the needs of children.
Niche manufacturing startups with the right idea, brand and marketing can often grow into much larger concerns. Take The Cambridge Satchel Company. Founded in 2008 by Julie Deane and her mother, the business has grown organically from tiny beginnings. Today the company makes more than 500 bags per day from their own UK-based factory and is worth in excess of £50m.
In the US especially, there is a drive toward reshoring manufacturing; bring back the skills and jobs into the country from abroad. And combined with the ethical concerns of the public, and founders, many startup manufacturers are selling the benefits of keeping things small. One of these is the Good Clothing Company whose founder, Kathryn Hilderbrand, is determined to bringing clothing manufacturing back to the US, prove that clothes can be made ethically, and improve the lives of garment workers.
Manufacturing offers startup entrepreneurs huge opportunities and possibilities across the board. The west is changing its attitude to this sector and customers’ expectations are changing along with it. There can be no doubt that manufacturing businesses, and entrepreneurs willing to take the leap, have a brighter future today than at any time over the last 30 years.