Adam Davidson of NPR‘s Planet Money has been doing some interesting reporting on what American manufacturing now looks like. His latest piece deals with “craft” manufacturing (A Revival In American Manufacturing, Led By Brooklyn Foodies, Feb 24). He also wrote about this in his New York Times Magazine column (Don’t Mock the Artisanal-Pickle Makers, Feb 19). Click here to hear the NPR story:http://pd.npr.org/anon.npr-mp3/npr/me/2012/02/20120224_me_07.mp3?dl=1
Think of craft manufacturing as aiming to produce low-volume, niche-oriented products. Possibilities range from Brooklyn hipsters making gourmet beefy jerky to manufacturing custom springs.
“Springs are critical to the day-to-day functioning of everybody’s lives,” says Steve Kempf, CEO of Lee Spring in Brooklyn. … “You take this wrench here for example,” he said, picking up a wrench from his desk. “It’s got a very unique L-shaped spring design. And so the product designer wants to come up with an elegant design, and he also has a very specific force he wants when you let go of this wrench so that it opens in your hands and feels comfortable.”
Think of this as an artisanal craft wrench. And a craft wrench needs a craft spring. This is good business, by the way. Companies will pay more for a spring that precisely meets their needs than they will for some off-the-rack spring.
The springs at Lee Spring are gorgeous displays of ingenuity and skill. Making them requires knowledge and artistry. It’s a true craft. Craft jobs typically pay more, so the workers at Lee Spring tend to do better than workers who don’t have all those spring skills.
In the Times, Davidson has the following observation on craft work.
It’s tempting to look at craft businesses as simply a rejection of modern industrial capitalism. But the craft approach is actually something new — a happy refinement of the excesses of our industrial era plus a return to the vision laid out by capitalism’s godfather, Adam Smith. One of his central insights in “The Wealth of Nations” is the importance of specialization. When everyone does everything — sews their own clothes, harvests their own crops, bakes their own bread — each act becomes inefficient, because generalists are rarely as quick or able as specialists. …
When it comes to profit and satisfaction, craft business is showing how American manufacturing can compete in the global economy. Many of the manufacturers who are thriving in the United States (they exist, I swear!) have done so by avoiding direct competition with low-cost commodity producers in low-wage nations. Instead, they have scrutinized the market and created customized products for less price-sensitive customers. Facebook and Apple, Starbucks and the Boston Beer Company (which makes Sam Adams lager) show that people who identify and meet untapped needs can create thousands of jobs and billions in wealth. As our economy recovers, there will be nearly infinite ways to meet custom needs at premium prices.
Competing by emphasizing what cannot be done easily from China or elsewhere overseas is something we have discussed before (I still want one of these baseball gloves!) and there is clearly a case to be made for it. If what is being provided is truly deserving of a premium, a company can afford the higher wages and regulatory burden that comes from producing here. Further, if it really is something that cannot be done in China, then that premium and the jobs it supports can be sustainable.
Until, of course, someone else decides to produce beef jerky in Brooklyn or makes an advance in custom springs. That raises the question of whether jobs at a craft manufacturer are the proverbial “good manufacturing jobs.” I am not 100% convinced on that point. Craft work exists in a niche and that means that growth opportunities are inherently limited. Maybe Lee Spring can continue to add new spring applications to its repertoire, but if it discovers some high volume opportunity, there will be an opportunity for them or some other firm to take the work to a lower wage location.
Davidson sees problems with this as well. Here is how he closes his Times piece.
The transition to an increasingly craft-centered economy will not be without agony. Woehrle and Premo succeeded because both had access to investors and the innate ability to segue from the salaried confines of corporate life to a much riskier, entrepreneurial world. A craft economy is far less stable: those who succeed this year may fail the next, as their once-unique products become commodities made cheaply overseas. Still, this new world seems, to some extent, inevitable. Instead of rolling our eyes at self-conscious Brooklyn hipsters pickling everything in sight, we might look to them as guides to the future of the American economy. Just don’t tell them that. It would break their hearts to be called model 21st-century capitalists.
So craft work may be an opportunity for some, but it may not be a panacea for the economy as a whole.