U.S. manufacturing is on a roll.
The New York Times recently called manufacturing a "Surprising Bright Spot in the U.S. Economy", the sector has added 330,00 jobs over the last two years, manufacturing economic indicators continue to rise and the President has made manufacturing the center of his economic policy.
The times are even more exciting for small (less than 100 employees) and micro (less than 5 employees) manufacturers. Most people don't realize how many small manufacturers there are the U.S.
According to the National Institute of Standards and Technology (NIST), which is part of the U.S. Commerce Department, there are about 330,000 U.S. manufacturing firms. As the chart below shows, roughly 120,000 of these firms have 4 or fewer employees and over 80% have fewer than 50 employees.
But even this way understates the number of small manufacturing firms in the U.S. The chart data is based on traditional definitions of manufacturing and excludes the growing number of artisans, professional Makers and others who build or create physical goods.
The craft market place Etsy, for example, had over $500 million in sales in 2011 - $70 million in December alone. Etsy's strategy going forward is create a business platform that will provide broader support to their thousands of business oriented artisans.
The professional Maker market also continues to grow. Make Magazine's Best of Maker Business 2011 provides an excellent summary of the business activities of these inventors and tinkerers.
The trends supporting the rise of small and micro manufacturing are powerful. One of the most important is a structural shift in how the U.S. manufacturing industry is organized.
Due in large part to foreign competition, U.S. manufacturing is no longer dominated by large companies and commodity manufacturing. Instead, U.S. manufacturing is increasingly done by a decentralized network of small, specialized firms. These firms rely on close customer relationships, automation, high productivity,valued added services and customized or specialized products to compete.
Other trends leading the the rise of small and micro manufacturing include:
- Shifts that are making U.S. manufacturing more cost competitive.
- New technologies like 3D printers that enable small and micro manufacturers.
- Increased demand for customized, specialized or niche products.
- The growing awareness of the hidden costs of manufacturing overseas.
As you can tell, we're very optimistic about small manufacturing and expect the sector to continue to expand in the coming years.