Last month, PPI released a provocative policy brief by Will Marshall, “Labor and the Producer Society,” which argued that the Great Recession and stalled economic recovery mean, “there can be no going back to the old economic model of debt-fueled consumption.” In this, Will is precisely correct. Even as median American income failed to rise over the past two decades, consumption surged because households piled up credit card debt or tapped their home equity. The massive debt deleveraging that typically follows financial crises still has some ways to go, which means that consumption cannot be counted upon to drive economic growth.
The United States, wrote Will, needs to “shift from a consumer society to a producer society.” We need a “new economic strategy that stimulates production rather than consumption; saving rather than borrowing; and exports rather than imports.” While such a shift needs to happen, we need a conception of “producer society” that is somewhat wider than old-line manufacturing, which tends to be the image that comes to mind when talking “production.”
Yet, in some ways, a new producer society is already taking shape all across the country, driven by very real grassroots movements in tinkering, do-it-yourself (DIY) projects, entrepreneurship, and even manufacturing. This is not the producer society of auto assembly or equipment manufacturing. In rural Missouri, a Polish immigrant with a doctorate in physics has founded Open Source Ecology, which creates what it calls the “Global Village Construction Set,” dramatically lowering the barriers to farming, construction, and manufacturing. The idea has clear implications for developing countries, but for a place like the United States, with massive legacy infrastructure and deep pools of engineering talent, the idea of repurposing existing technology for lower cost and better quality is very attractive.
Or take Maker Faire, which bills itself as the “world largest DIY festival.” It is a joyous collection of “makers”: proverbial garage inventors, hobbyists, and people who like to tinker. A Maker Faire held in Detroit several months ago drew 70,000 people! A recent issue of Make magazine, moreover, featured information on how to build your own go-kart. A slightly more formal version of the maker movement is TechShop, which originated in Silicon Valley and has now expanded to Detroit and Raleigh, NC, with additional locations planned. TechShop operates on the subscription model—you pay, say, $100 per month and gain access to cutting-edge equipment such as 3-D printers and laser-cutting machines. Several new companies have already emerged from TechShop. These are the faces of American manufacturing’s future.
But we must expand our notion of “producer” as well. All around the country, thousands of people participate in Startup Weekends throughout the year. This event is exactly what it sounds like: a 54-hour crash-course in pitching ideas, forming teams, building products, and pitching again. Many actual and sustainable companies have emerged from these. To date, most Startup Weekends focus, quite naturally, on software and Web-based businesses. But in the coming months there will be a Startup Weekend focused on 3-D printing and even health services. The idea echoes those of OSE and Maker Faire: rapid learning, lower costs, higher quality.
Startup Weekend participants, moreover, see themselves as builders and creators and, yes, producers. As Marc Andreessen recently emphasized, software is “eating the world,” transforming industries that we previously thought of as far removed from software. If you follow the myriad blogs and opinion pieces in the world of technology entrepreneurship—and if you can look past the persistent claims that we are in a new “tech bubble”—it becomes clear that this is a movement of producers.
Is this enough, however, to save the American economy from a Japanese-style lost decade? Skeptics will rightly assert that these movements of makers and startups are far from sufficient to create jobs for all the unemployed and underemployed. And, the challenges facing the United States in areas like education and health care are deep-seated. We have seen, moreover, that even before the onset of the financial crisis in 2008, new companies were “starting smaller and staying smaller,” a trend that only worsened during the recession.
A full treatment of public policies and private actions that might build on the foregoing movements and fully address the American economic challenges must wait for a future column. We should work, of course, to boost the competitiveness of the “old” producer society, but this will be achieved more through free trade agreements than government-directed investments. But, history teaches that the next economic frontier is born in the depths of recessions. The future being created right now at Maker Faire, in TechShop, and at Startup Weekends is the leading frontier of our next era of economic prosperity.
Photo credit: Laughing Squid