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How Makers Will Remake the Economy

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The American economy's still sluggish. Take heart, though. There's a revolution under way that could change everything -- and provide some much-needed economic hope.

Wired Editor-in-Chief Chris Anderson published his book The Long Tail: Why the Future of Business is Selling Less Of More in 2006, predicting the deteriorating significance of the "blockbuster" hit product and the rise of the "long tail" of niche goods suited to individualized tastes. This had everything to do with the incredible expansionary capabilities of e-commerce, creating avenues that would have been unthinkable decades ago. We now take that "long tail" for granted.

Anderson's long tail theory centered on "bits." However, he is now outlining the next huge shift in economics and business, already under way. The Internet and technological innovations are moving back into atoms, or the physical space.

In Anderson's new book, Makers: The New Industrial Revolution, he predicts that the do-it-yourself, community-centric "Maker" revolution is going to recreate or even completely disrupt many industries that investors take for granted now, and create even more opportunities.

I don't wanna hear it --Minor Threat
Anderson had me hooked at the beginning of the book, mentioning DIY and the 1980s D.C. hardcore rock scene.

I get that, because I witnessed that do-it-yourself punk rock ethos myself here in D.C. Regular kids took control of their own thoughts and destinies; they published their own "zines" and concert fliers using literal cut-and-paste graphics and photocopying machines. They grabbed instruments, taught themselves to play, and put on their own shows, often in venues like churches, somebody's basement, Fort Reno Park or the (old) 9:30 Club. They started their own record labels -- take Dischord, which is influential to this day -- and charged reasonable rates for shows and albums.

From this background, Anderson is one of many people (myself included) who went on to explore the expanding world of bits -- the Internet -- which further democratized the playing field on a far-flung scale. Finally, "obscure" or "niche" content had a shot at larger audiences. Online, you could find anything, regardless of physical-world problems like stocking bricks-and-mortar shelves.

Even more importantly, you could easily create and distribute your own content, too -- the world of bits gave the means of production to the masses, making "big media" far less important.

Anderson's newest vision focuses on the growing Maker movement. Although "bits" are still important, and the Internet is a huge part of his theory, he points out that the world of atoms -- Real Things -- remains just as essential as ever. We eat, we use furniture, we utilize tools.

The do-it-yourself Maker movement is bringing the means of physical production of things to the masses, straight to the entrepreneurs and inventors who in the past had no choice but to find large companies to do the physical creation and distribution for them.

Shut up and make it
According to Anderson, you're a Maker if you create any number of things -- art, cooking, gardening, scrapbooking, knitting, and other physical activities that might be mistaken as "hobbies." However, Anderson's book goes far beyond the simple idea that some people like to make stuff -- it's that "small" now has the potential to get really, really big.

There are plenty of signs that it's already happening. Anderson points out that thousands of shared production facilities, called "makerspaces," are cropping up around the world, and gatherings like Maker Faire are increasingly on the radar. Makers design and produce small batches of toys, gadgets, cars, and even robots.

The advent of 3-D printing is one of the key turning points in this movement. Even though it's still in its infancy, its potential to drive transformative change in the marketplace is huge. Companies like Stratasys (NASDAQ: SSYS  ) and 3-D Systems (NYSE: DDD  ) already provide the means to "print" three-dimensional objects.

Much of Anderson's book extolls the virtues of being a Maker. In a sluggish economy, this hands-on movement hearkens back to Steve Jobs' garage work sowing the seeds for Apple (NASDAQ: AAPL  ) . Clearly, this is the entrepreneurial spirit that creates new technologies, products, companies, and economic expansion.

At the same time, though, this revolutionary approach certainly puts the economic growth of large enterprises into question as the economy changes. A much more serious consumer interest in customized, artisanal products these days is no joke. Mass production may be becoming less significant and even less efficient.

Tesla (NASDAQ: TSLA  ) is a much larger enterprise than many Makers could boast, but its networked electric vehicles and business that's more Silicon Valley than Detroit is one of the examples examined in Anderson's book.

So obviously, this revolution can most certainly hurt some industries. The best positioned companies will be the ones that will accept and tap into the brilliance instead of fighting it. Anderson pointed out that auto giant Ford (NYSE: F  ) is helping foster a "maker space," the Detroit Techshop, where it plans to give out 2,000 memberships to employees to use the area for tinkering with work-related or personal projects. Employees have developed several innovative projects there, and patent submissions at Ford have risen 30% since the program began.

The strength of small
Anderson's book may not sound like a book that it's important to investors, since it focuses on things many investors don't feel jazzed about. For example, there's a lot of talk of open-source and community, and random people tinkering in "makerspaces" might not sound like an investable idea.

Much of the book extols the virtues of being a Maker and plumbs into how it works. If you want to join the Maker revolution, the book gives lots of information on how to do so, and real-life examples of what kinds of innovations are going on, as well as the tools that are available, including services like Kickstarter, which are simply ways for the "small" to tap into much-needed capital.

However, any investor who's ever pondered the wisdom of crowds -- or the community intelligence we champion here at the Fool -- knows there's power there, even if a lot of what's going on hinges on "free" and may not even be profitable. Over the long haul, passion and great ideas will often eventually turn to new companies, technologies, and profits. Greatness starts with passion, vision, and a can-do, can-make attitude.

Anderson's book reveals a little good news, for a change. Even if "big" is struggling, "small" is suddenly gaining the real strength. Thank goodness for the rise of Makers; they'll likely remake the future, after all. Makers: The New Industrial Revolution can help investors get ready to take advantage of the opportunities -- and avoid the risks in disrupted industries.

It started out small, but there's no doubt that Apple is at the center of technology's largest revolution ever, and that longtime shareholders have been handsomely rewarded with over 1,000% gains. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and more importantly, your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.

Read/Post Comments (2) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 12, 2012, at 10:32 AM, dion2727 wrote:

    For months now I have called it the COTTAGE revolution.I remind all that the artisans and artists will free the world from elitist dictatorial governments and suffocating oppressive unions.Man will learn to throw off his chains.As a retired engineer and 85 I urge all young people to be their own self-directed entrepreneurs by using the vast educational resources that are free if you choose to work hard.I know I am preaching but young people be selfdirected and massdirected.

  • Report this Comment On December 12, 2012, at 10:33 AM, dion2727 wrote:

    not masdirected

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