Across the world, human beings have always innovated and invented new ways of doing things, but in the Western world in the 18th to 19th centuries, the pace of technological change became very rapid. The West was the first area of the world to undergo an industrial revolution, and some of the great heroes of that time were engineers and entrepreneurs who harnessed the power of steam and electricity to create manufacturing industries that supplied the world.
However, in recent years, technology has spread across the world, and the new powerhouses of China and India have been catching up with the West. Now, many goods can be manufactured much more cheaply in the developing world than they can in the developed nations and, as a result, much manufacturing industry has been moving to areas where costs are lower.
Can engineering and manufacturing companies in the developed world compete against companies that base themselves in low-cost areas? One way for firms in the developed world to compete is by concentrating on becoming excellent in their own niche. Germany is renowned for its manufacturing and engineering skills, and it has many small and medium-sized companies that thrive by becoming very good in their own niche. The key to success is understanding your customers and knowing how to meet their needs.
Being a small company in a niche market does not mean that you will not face competition. Successful companies innovate and produce high-quality products rather than cutting costs. UK company Brompton Bikes is an example of a small company that has become very successful producing just one product, a folding bicycle. Brompton Bikes offers its customers the chance to customize their own bicycles, including color, handlebars, gears, and accessories, and the company has become an icon of city living.
The Swiss company Laurastar specializes in making irons for those people who want to press their clothes to professional standards at home. When the company was threatened with competition from larger companies with more resources, it did not respond by trying to reduce its prices; rather, it responded by hiring a team of high-caliber engineers to create an iron that was smarter than any other iron on the market.
Transducer Techniques is another example of a company that excels in its market and has become successful by focusing on its key products. The company produces special purpose transducers and other related instrumentation.
Successful companies also have good employee relationships and they retain their staff, which is important as highly trained staff are expensive to replace. Employees who feel they have an investment in the company and are proud to work for it will be more productive.
It can be difficult to survive in today’s business world when companies are global and can easily move their manufacturing to low-cost centers. For startups, it can be difficult to get investment. However, despite these difficulties, many small and medium-sized businesses do well in the developed world despite the higher costs by innovating and focusing on their core business.