December 1, 2009

Chris Anderson on the democratization of manufacturing and distribution

David SparkEvery five or ten years, myself and my colleagues reflect on how much we used to pay for technology and how we’re able to do things we couldn’t do before because it was cost prohibitive.

• It used to be too costly to produce a video, then we got non-linear editing on the desktop.

• It used to be too costly to produce a live television program and distribute it, then we got tools like the TriCaster.

• It was unheard of for an individual to produce and broadcast a 24 hour video channel, but then we got a web tool like LiveStream.

These are just a few examples. There are tons more. Technology and the social web have lowered the barrier for so many things that simply weren’t possible without a huge cash investment. The net result is more people with more talent are able to create more products (e.g. music, games, movies, applications, Internet companies, etc.) just as long as they’re digital. The analog world hasn’t had a chance to see this kind of innovative renaissance, until now, said Chris Anderson, Editor of Wired, during a presentation at the Supernova conference in San Francisco.

We’ve created the model for distribution, now let’s use it

If the past decade was about finding new post-institutional social models on the web, then the next decade will be about applying those models to the real world, explained Anderson. In the video production examples above, cheap non-linear editing, video cameras, and online connectivity democratized video production and distribution, making it affordable to all. And as Anderson argues, when you democratize creation and distribution, you vastly change the world. And while we’ve seen this happen again and again in the digital world, we’re now seeing the trend bleed into the physical world, as Anderson demonstrates with a few examples:

  • 3D Printer

    3D Printer

    3D printers that can duplicate nearly any object, which used to cost thousands of dollars, are now available for $750. Anderson has one in his basement.

  • Access to manufacturers in China that companies like Sony use is now available to everyone using the manufacturer directory Alibaba along with its international real-time communications tool, TradeManager.
  • While it’s still expensive to open up a brick and mortar store, distribution is possible through ecommerce.

What all this means is individuals now have access to manufacturing and distribution and they can compete with Walmart. Anyone, not just major manufacturers, now have affordable access to platforms for micromanufacturing the long tail of physical goods.  This is how the web revolution hits the real world, said Anderson.

Small companies filling market gaps

Micro manufacturers are also filling niche markets that major manufacturers don’t want to fill for a number of reasons, such as brand affiliation. In another example, Anderson talked about the squeaky clean image Lego maintains. They’ve got a very wholesome product with a wholesome brand and they want it to stay that way.

Brickarms_hangunsWhile wholesome-only products is what Lego wants to put out, there’s an audience that wants more. Enter Brickarms Covert Weapons Pack, mini toy weaponry for your Lego characters. Anderson spoke with Lego and asked them what they thought of Brickarms. Turns out they’re totally fine with Brickarms making these Lego weapons. Lego just doesn’t want to be in that market. They’ve got a brand to maintain.

With micromanufacturing, small companies can fill unmet market gaps.

Vertical integration is no longer necessary to reduce overhead

Anderson closed his presentation talking about two very different philosophies of production. Before the democratization of the Internet, the manufacturing model required businesses to internalize all transactions so as to minimize costs. But today, manufacturers can minimize transaction costs through a web of connectivity.

Creative Commons images by Roo Reynolds and G-Sta on FlickrDavid Spark, a partner in Socialmedia.biz, helps businesses grow by developing thought leadership through storytelling and covering live events. Contact David by email, follow him on Twitter and Google Plus or leave a comment below.

  • http://stephenpickering.com Stephen

    Well the whole point of technology is to increase productivity in the “real world” We walk a fine line between technology as our servant and technology as our master. When tech creates more headaches in frustration in our daily lives, its time to re think our attitude and approach towards it and get back to the main paradigm, which is that of increased productivity which translates into more freedom, freedom to be more creative, accenting our strengths as humans, an off loading the drudgery, rote work to the machines. That's the main paradigm and I see it carrying through. But a lot of people face increased stress with the pace of life increasing at an every increasing rate. That's the downside. I'm imagining the only way to deal with it, is to step back and see the bigger picture, and reassess one's relationship to technology as a whole.

    • http://www.facebook.com/davespark David Spark

      A friend of mine, Patrick Kearney, used to have a podcast called The PJK Podcast which was about exactly that subject. He's a complete geek living as much of a digital life as he can and yet he still sees the downside. In every episode he asked, “Is technology helping us or making our lives more difficult?” He hasn't done a new episode in well over a year, but I bet you can get some of his old episodes. http://pjk.net/

  • http://twitter.com/marketingfails @marketingfails

    The way I see it now, the play field has been leveled. Even a small shop on the corner of 1st and 2nd street can magically produce a face-off strategy at the same quality and effective degree as the industry giants (you know, the ones with the shareholders and the unstoppable headaches). Great report David. –Paul