Can GE and Local Motors Revolutionize Manufacturing?
General Electric (NYSE:GE) has come a long way since bringing the lightbulb to market. Last week, the global industrial conglomerate announced a partnership with Local Motors, a micro manufacturer specializing in open-source design, marking a milestone in General Electric’s changing role in the 21st-century economy.
The arrangement is a marriage between the ingenuity of the crowd and the advanced manufacturing capacity of General Electric. The traditional model with an industrial powerhouse like General Electric or United Technologies (NYSE:UTX) relies heavily on a strong internal research and development team that is able to outperform the competition. More specialized manufacturers like Ford (NYSE:F) also rely on the ability of their own designers to outperform (or at least keep pace with) their counterparts at a competitor like General Motors (NYSE:GM). Ostensibly, the better product wins in the market place.
The new model, represented by General Electric’s partnership with Local Motors, takes some weight off the shoulders of the in-house R&D team. Instead of relying on the ingenuity of a set of employees, General Electric can tap directly into the creative flow of an enterprising community of creative thinkers and designers from around the world and from every walk of life. The partnership positions General Electric as a sort of curator of the content — the inventions and innovations of the crowd — that can help foster and prototype interesting ideas and then commercialize the good ones.
“At GE over the past years, we’ve redefined our approach to innovation, focusing on R&D as well as co-creation, open collaboration and partnership, which has allowed us to engage new audiences and develop a following across various industry sectors,” said GE Executive Director of Global Innovation Steve Liguori in a press release. “Today, a new era of manufacturing is dawning — and with Local Motors, we are pioneering the future of work, fast tracking a new model for the manufacturing industry, and improving and expanding GE’s product offering to better meet future customer needs.”
This type of collaboration between open-source platforms like Local Motors and industrial giants like General Electric presents an interesting challenge for companies like Ford and General Motors. As the name suggests, Local Motors built its footprint manufacturing vehicles entirely designed by the crowd and produced locally at micro-manufacturing facilities. Its success in this area was what first attracted GE.
Local Motors has facilitated the creation of a couple of vehicles unique to different regions of the U.S., such as the Rally Fighter in Phoenix, the Green Apple in Manhattan, and the Boston Bullet in Boston. Each design is a limited run, with no more than 2,000 units being made. Local Motors argues that this process of crowd-based design and local micro manufacturing is more holistic because it keeps jobs local and cuts down on the waste typically associated with mass production.
The platform that General Electric and Local Motors will collaborate on is called FirstBuild, which will officially launch this summer. The first set of projects tackled by FirstBuild will focus on major kitchen appliances, an area of the market that General Electric is highly exposed to. General Electric manufactures everything from dishwashers to air conditioners to water filtration systems. This is a market where small innovations that increase functionality or ease of use can make the difference between a product that outperforms and a product that hardly sells.
“Together, Local Motors and GE will provide a powerful platform to discover innovators and, in turn, make revolutionary new products available to consumers,” said Local Motors CEO Jay Rogers. “Rapid iteration, rapid development and rapid manufacturing will make an enduring impression on the world’s manufacturing history.”