NEW YORK CITY – MakerBot’s 3-D printers can make all sorts of things out of plastic – dolls, screws, dinosaurs – but they can’t make more 3-D printers. Early on, when an order came in for one of them, employees counted out parts from plastic cups into a box they would ship back to the customer, some assembly required.
This, of course, was no way for a hot tech company to scale up. So three years ago, a MakerBot delegation flew to China to investigate moving their growing production line there.
Then they flew home, checked out a few more suitors, and built a 150-employee, 3-D printer factory down the street in Brooklyn – one of the most expensive places to live and work in the United States.
Why MakerBot decided to build its factory in Brooklyn is a story of engineering, Ultimate Frisbee and, at its core, what you might call branding. It’s about a sense of place attracting a certain type of entrepreneur who starts businesses and creates jobs, including some jobs that, by strict cost calculations, maybe shouldn’t exist where they are.
It’s an answer to the question of why you’d create a job in America, even when other countries offer lower-cost labor and millions of U.S. workers have lost their jobs to outsourcing. The answer: Because there are still places in America where highly skilled people would rather live than anywhere else in the world.
In New York, “companies are coming because they see this is the richest place to access talent, anywhere,” said Benjamin Branham, executive vice president and chief strategy officer for the New York City Economic Development Corp. “And talent is coming here because this is a great place to live, and you have access to all the things you’d want in a city.” (As Jeff Guo notes, New York is a powerhouse in attracting college graduates, including some 750,000 between 2007 and 2012.)
Jenny Lawton first came to Brooklyn in 2011 for a job interview. The trip was a disaster. Traffic snared her on an unfamiliar bridge. Parking eluded her. She was late to her interview with Bre Pettis, who hated when his meetings started late.
Pettis had fallen in love with Brooklyn a few years before, and moved there. He and many of the other pioneers in the borough’s nascent tech scene all played Frisbee together. With some friends, he launched a hacker space – a super workshop with soldering tools and all sorts of other fabrication machines – called NYCResistor. They wanted a 3-D printer but they couldn’t afford one, so they built their own.
Thus began MakerBot.
The company’s assembled-from-kits printers were a hit, and it had grown to nearly 50 employees by the time Pettis met Lawton. She was a human resources specialist who had held executive posts for a medical-device company and a solar panel installer but recently lost her job. She knew Pettis was about to expand his company exponentially; she pitched him on a plan to do that.
At first, Pettis told Lawton he couldn’t afford her. Try me, she said. She signed on to MakerBot for half her former salary – plus her own personal 3-D printer – and set to work growing the company. She hired engineers and managers and salespeople. Then she turned her attention to manufacturing.
If you’re in the hardware business, cost is king. China is cheap. Touring the factories, Jenny Lawton could see why: They, like MakerBot, were assembling products by hand – with waves of low-paid workers.
“They’re doing this with people!” Lawton recalled thinking while on the tour. “There’s no magic here.” Her thoughts skipped back to America: “We have people down the street who need a job – why not just hire them?”
It was more complicated than that, of course. The company was also considering locating the factory in upstate New York and Las Vegas, among other areas. The final decision turned on a simple calculation: MakerBot wanted its production line close to its engineers, and its engineers wanted to live in Brooklyn.
Working out bugs in a factory halfway around the world would be cumbersome, MakerBot executives decided. They were nervous about leaving their intellectual property unprotected in China. Besides, 70 percent of their job applicants lived in Brooklyn already, Lawton said. City officials helped them secure space for a factory.
New York City’s economic development corporation holds up MakerBot – and 20-odd other 3-D printing companies clustered nearby – as an engine of employment growth for the city. (A recent report estimated the city’s tech ecosystem has grown nearly 20 percent over the last decade.) Analysts say some of that growth is wrapped up in what you might call Brooklyn’s “brand” – a hacker culture, edgier than Silicon Valley, with access to all the amenities of one of the most vibrant cities in the world.
“The image of the place can connect to what’s really going on economically in an industry cluster, or a technology ecosystem,” said Mark Muro, the policy director for the Metropolitan Policy Program at the Brookings Institution, who studies where industries cluster and why. “And if you think about it, all the places that have a really strong local infrastructure system also have really strong images. Quality of place and quality of life are certainly part of it, but economic image is, too.”
The problem with flashy brands is they’re usually expensive. Cost of living and doing business can rebound, driving some companies or workers away. “The brand might get their attention,” said Branham, of the economic development corporation, “but they’ll have to quickly pivot to calculations of whether it’s going to work out for them in the long run.”
Lawton is now CEO of MakerBot, succeeding Pettis, who stepped down last month. She sat for an interview recently in the company headquarters high above downtown Brooklyn, where a “BotFarm” of printers churns out plastic products on rows and rows of metal shelves.
MakerBot’s factory pays a healthy wage, she said, with medical and dental benefits and a 401(k) plan. Workers have the chance to move up – to supervisory roles in the factory, or, in some cases, to bigger roles in the broader company. (Some are college grads, some have only a high school education; the jobs often require relatively low skills, Lawton said.) She said that potential opportunity helps offset the costs of commuting from the Bronx or Long Island, as many employees must, to find affordable housing.
“People who are in Brooklyn, who are in New York, are very intentional about being here,” she said. “It’s expensive to be here – it costs more to be here.”
If MakerBot continues to grow, and if 3-D printing takes off as an industry, the pressure to outsource will grow, too. “I hear fear from our factory workers when we talk about getting bigger,” Lawton said. “’What about me? What about my job?’”
She hopes the company will keep its factory in Brooklyn – that the workers’ fears will be unfounded, that MakerBot can resist the call of China.
But she’s not sure.