Middle America feels left behind. Can the tech community help?

Middle America feels left behind. Can the tech community help?

May 18, 2017

By Caroline Fairchild, Senior Editor, Technology and Startups at LinkedIn Like so many things in business, the numbers speak for themselves. In 2016, venture capitalists invested nearly $70 billion across 8,000 U.S. startups. But close to 80% of that capital went to founders in just three states: California, New York and Massachusetts. This is a reality that, until recently, the tech community mostly accepted. A vast majority of the biggest venture capital firms in the country are in these coastal states, so it makes sense that investors are backing companies started in their own backyards. But then, something happened that made investors, founders and tech execs alike feel like they had to get out of their own bubbles: Donald Trump was elected president. In that moment, shellshocked leaders across tech started to think about how they could get back in touch with regions outside of the major metropolitan areas on the coasts. Only 50% of those born in 1980 or later will make more than their parents, new research shows. Trump’s election tapped into the angst about jobs disappearing and what people across the country consider to be unfair competition driven by technology. Leaders in the industry now want to see — and solve — this problem firsthand. Facebook CEO Mark Zuckerberg announced a tour across America to meet with families and workers in places like Fort Bragg, North Carolina and Blanchardville, Wisconsin. Y Combinator Founder Sam Altman went on a listening tour to speak with Trump’s supporters around the country. And now, investors have started to speak publicly about how they can diversify their portfolio to include founders solving problems for users outside of major city centers. Despite all this activity, the numbers have barely moved: In the first quarter of 2017, more than two-thirds of the $13.9 billion in venture capital deployed to startups went to founders in California, New York and Massachusetts, according to data from PwC and CBInsights. In this episode of Work In Progress, Chip Cutter and I explore what this concentration of capital means for business owners who aren’t based on the coasts. Steve Case, the CEO and chairman of Revolution, a venture capital firm based in Washington...

Reshoring Exceeded Offshoring in 2016: Policy Changes Needed…

Reshoring Exceeded Offshoring in 2016: Policy Changes Needed…

May 15, 2017

Reshoring Initiative 2016 Data Report Reshoring Exceeded Offshoring in 2016: Policy Changes Needed to Maintain Momentum Kildeer, IL. May 15, 2017 — For the first time in decades, more manufacturing jobs are returning to the United States than are going offshore. The combined reshoring and foreign direct investment (FDI) trends grew by over 10 percent in 2016, adding 77,000 jobs (tying the 2014 record) and exceeding the rate of offshoring by about 27,000 jobs. The 2016 results bring the total number of manufacturing jobs brought back from offshore to more than 338,000 since the manufacturing employment low of February 2010. There are still huge opportunities and challenges to bringing back all the 3 to 4 million manufacturing jobs cumulatively lost to offshoring. The rate of job return announcements doubled in November 2016 and hit an all-time peak monthly record in January 2017. Clearly, government policy changes and expectations of those changes are key to accelerating the trend. Overview The Reshoring Initiative’s 2016 Reshoring Report contains data on U.S. reshoring and FDI by companies that have returned U.S. production or sourcing from offshore. The report includes cumulative data from 2010 through 2016, as well as highlights from the first quarter of 2017. In comparison to 2000-2003, when the United States lost, net, about 220,000 manufacturing jobs per year to offshoring, 2016 achieved a net gain of 27,000. The tide has turned. The numbers demonstrate that reshoring and FDI are important contributing factors to the country’s rebounding manufacturing sector. The overall trend was up from 2015 due to anticipation of potential policy changes that will make the United States more competitive, continued rising wages overseas, and increased use of total cost of ownership for sourcing decisions. “We publish this data annually to show companies that their peers are successfully reshoring and that they should reevaluate their sourcing and siting decisions,” said Harry Moser, founder and president of the Reshoring Initiative. “With 3 to 4 million manufacturing jobs still offshore, as measured by our $500 billion/year trade deficit, there is potential for much more growth. We call on the administration and Congress to enact policy changes to make the United States competitive again. Our Competitiveness Toolkit is...

The Founder of Under Armour Has Big Plans for…

The Founder of Under Armour Has Big Plans for…

May 5, 2017

“The Founder of Under Armour Has Big Plans for ‘Made in the USA’ “ Kevin Plank has launched an ambitious project aimed at revitalizing Baltimore by empowering entrepreneurs to create and build new products there. By Leigh Buchanan, Inc. Magazine In honor of Small Business Week, Inc. reporters deployed to several cities where they spent one day talking to owners and entrepreneurs in a particular sector about their challenges. Kevin Plank made a fortune from manufacturing. Now he wants to seed his adopted hometown of Baltimore with manufacturers, replacing urban blight with a city of makers. Plank, who grew up in suburban Washington, relocated his athletic apparel business, Under Armour, to Baltimore in 1998, where he grew it into a public company with 2016 revenues approaching $5 billion. Once a manufacturing hub, Baltimore over the decades has bled well-paying jobs with the loss of companies like Bethlehem Steel and Proctor & Gamble. Although Under Armour manufactures overseas, Plank believes new technologies and processes can make Made-in-the-USA economically viable again. He is now experimenting with local manufacturing at Under Armour. And he is building an ecosystem of startup manufacturers engaged in the same grand experiment. The focal point of that experiment resides in Port Covington, a south Baltimore neighborhood where Plank Industries–which manages the entrepreneur’s non-Under Armour ventures–is building a new corporate campus and expansive mixed-use development. It is a 133,000-square-foot converted bus depot, prosaically dubbed City Garage. The space, which opened last year, encapsulates the manufacturing journey from inventor to business to industry. “We are looking at how a city like Baltimore, which once competed on manufacturing, can get that back,” says Demian Costa, managing partner of Sagamore Ventures, Plank’s investment arm. “And in what form does it come back?” City Garage is divided into three sections. First is the Foundery, a sprawling maker space where members (the monthly fee is $150, with 50 percent discounts for students, disabled veterans, and others) have access to classes and tools for work in metal, wood, glass, textiles, and other materials. “This is where the 22-year-old football player walks through the front door and can turn any idea on the back of a napkin into reality,” says...

MEPs are Essential to Rebuilding American Manufacturing…

MEPs are Essential to Rebuilding American Manufacturing…

Apr 26, 2017

By Michele Nash-Hoff, Savingusmanufacturing.com Last month, President Trump submitted a “Skinny Budget” with the goal of removing some of the “fat” within Washington DC. Unfortunately, one of the programs eliminated in his budget is not “fat.” The Manufacturing Extension Partnership (MEP) is the only federally funded national network dedicated to serving small and medium-sized U. S. manufacturers. The MEP program was re-authorized by both Houses of Congress by unanimous consent earlier in January when the MEP program went back to 1:1 cost matching. The reality is that the MEP network is essential to helping manufacturers be competitive in the global marketplace and rebuilding American manufacturing. Eliminating the MEP program seems contradictory to President Trump’s focus on manufacturing. The MEP website states, “Since 1988, the Hollings Manufacturing Extension Partnership (MEP) has worked to strengthen U.S. manufacturing. MEP is part of the National Institute of Standards and Technology (NIST), a U.S. Department of Commerce agency…MEP is built on a national system of centers located in all 50 states and Puerto Rico. “Each center is a partnership between the federal government and a variety of public or private entities, including state, university, and nonprofit organizations. This diverse network, with nearly 600 service locations, has close to 1,300 field staff serving as trusted business advisors and technical experts to assist manufacturers in communities across the country.” This public-private partnership provides a high return on investment to taxpayers. “For every one dollar of federal investment, the MEP national network generates $17.9 in new sales growth for manufacturers and $27.0 in new client investment. This translates into $2.3 billion in new sales annually. And, for every $1,501 of federal investment, MEP creates or retains one manufacturing job.” The top challenges reported to MEP by manufacturers are: • Cost Reduction 70% • Growth 54% • Employee Recruitment 47% • Product Development 45% In FY 2016, the MEP national network interacted with 25,445 manufacturers and achieved these results through their wide range of services: • $9.3 Billion New and Retained Sales • 86,602 New and Retained Jobs • $3.5 Billion New Client Investments • $1.4 Billion $1.4 Billion Cost Savings I have long been aware of the work of the California MEP,...

GM to Invest $1 Billion in U.S. Manufacturing Operations

GM to Invest $1 Billion in U.S. Manufacturing Operations

Apr 24, 2017

By Design-2-Part Magazine DETROIT—General Motors (GM) will invest an additional $1 billion in U.S. manufacturing operations that include multiple new vehicle, advanced technology, and component projects, the company announced recently. Details of individual projects will be announced throughout the year, GM said in a press release. The company also announced it will begin work on insourcing axle production for its next generation full-size pickup trucks, including work previously done in Mexico, to operations in Michigan, creating 450 U.S. jobs. “As the U.S. manufacturing base increases its competitiveness, we are able to further increase our investment, resulting in more jobs for America and better results for our owners,” said GM Chairman and CEO Mary Barra, in the release. “The U.S. is our home market and we are committed to growth that is good for our employees, dealers, and suppliers and supports our continued effort to drive shareholder value.” GM’s announcement is part of the company’s increased focus on overall efficiency over the last four years. With a strategy to streamline and simplify its operations and grow its business, GM reports that it has created 25,000 jobs in the U.S.—approximately 19,000 engineering, IT, and professional jobs and 6,000 hourly manufacturing jobs—and added nearly $3 billion in annual wages and benefits to the U.S. economy over that period. At the same time, GM reports that it has reduced more than 15,000 positions outside the U.S., bringing most of those jobs to America. During that period, the company says, it has moved from having outsourced 90 percent of its IT work outside the U.S., to an insourced U.S.-based model. “We will continue our commitment to driving a more efficient business,” said Barra, “as shown by our insourcing of more than 6,000 IT jobs that were formerly outside the U.S., streamlining our engineering operations from seven to three, with the core engineering center being in Warren, Michigan, and building on our momentum at GM Financial and in advanced technologies. These moves, and others, are expected to result in more than 5,000 new jobs in the U.S. over the next few years.” General Motors (www.gm.com) has also been facilitating its supplier base to do the same. The company has been executing...