What Is The Midwest Good At? Manufacturing

The study that a group of University of Illinois graduate students undertook affirmed a lot of my hypothesis about the startup ecosystem in the Midwest. It also uncovered some interesting points that need to be thought about a little more deeply.  One of the knocks against the region is it is the Rust Belt.  Decrepit second class cities rusting away like old junks in the junkyard.

The truth is that the Midwest has the largest manufacturing sector in the US.  It’s lead by two states, Ohio and Illinois.  Manufacturing has a multiplier effect of 3.2x to GDP.  Government spending has little or no effect.  Retail has a .88x effect.  How do we get the manufacturing base in the Midwest to grow?  Innovate.

Some of that innovation is happening today.  Energy sources are getting cheaper due to efforts like fracking.  That’s causing job creation.  Can we invest in startups that will innovate how factories produce, and even what they produce?

Clean Tech, Computer Numerical Control, Machinery, and Automotive.  That’s where UILabs comes in.  It will define the problems of the future, design new technologies to produce, and deliver solutions to the market.  Those solutions can lead to higher profits and productivity.  Here is a chart of a 3D printing company ($DDD) that recently went public.

DDD data by YCharts

The Midwest has an incredible base to innovate on. The future is not just 3D printing.  I have seen some cool manufacturing innovations in the past couple of years, and would love to see more. Intellihot has a cutting edge water heater that will save customers millions on water and heating bills.  They make them in Galesburg, IL.  In the recent Gener8tor class, one of the companies, Driblet, has a Nest like water meter.  Driblet is based in Wisconsin.

Many startups have focused on Customer Relationship Management (CRM).  But what about Employee Relationship Management (ERM)?  There could be a lot of innovative ways for companies to manage and interface with employees invented that utilize social, and cutting edge tech to seamlessly integrate with existing platform management systems.

These aren’t apps.  They are real thoughtful innovations that solve big problems.    That’s what the Midwest has been doing for years.

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