[lemonwaterlime]

The key topics missing from this article are management and culture. Manufacturing companies by and large are stubborn with outdated practices that haven’t kept up with the times. The number of mechanical engineers who switched to web development, for instance, because of poor pay and improper management is insane. And during the pandemic, even more either fled or were pushed out from lack of opportunity. It’s easy to blame these policies and say that industries aren’t connected, but when these firms are refusing to embrace new technologies and take calculated risks, they do this to themselves all by themselves.

They commonly keep employees using the simplest heuristics that someone at some point in the past developed which worked then, so why break it? And they push this mediocrity throughout the entire organization and industry. Then they swap out one failed CEO for the same person with a different name like a pair of gloves, wondering what ever happened as there was nothing more that could be done. Meanwhile their ageist management policies block out the insights of the young, all but ensuring that no new ideas are brought into the mix—all until it’s time for another bailout.

[throw__away7391]

OK, but this was also true of many software companies in the past. What is keeping manufacturing companies from experiencing the same kind of disruption?

[Nasrudith]

If I had to guess it would be higher amount of capital investment as a requirement and its impact on scaling - physical things can't just explode in-a-good-way the same way software can. This means both more time and more capital is required to scale up.

Incumbents benefit from economies of scale and newcomers face dis-economies of scale. Which we know takes time from the economies Growing new competitors becomes hard and requires some cleverness to get around. Just look at electric cars and how they choose luxury/sports cars as their first models for a reason, so that the higher costs can be hidden in the high luxury margins. They need to be able to grow past that awkward point.

The same economies of scale which made the industrial revolution possible essentially props up "gigantic idiots" (companies which perform poorly but are sizable enough that their economies of scale made up for bad habits) until their "stupidity" (bad decisions) becomes great enough a disadvantage that others can compete with them.

The type of disruption that the manufacturing companies seem to engender is funding outsourcing to some remote cheap locale, and then wake up wondering where all of their competitors came from after they taught people enmasse how to build their product.