A quiet revolution is being built in River West.
mHUB, the midwest’s largest innovation center for physical product development and manufacturing, is preparing for a sweeping change in Chicago’s manufacturing industry. While the Windy City has been one of the world’s major manufacturing hubs for more than a century, after seismic shifts in the industry over the past decades, it is poised to again be a primary player in another global economic shift: the Fourth Industrial Revolution.
What exactly is the Fourth Industrial Revolution, though? Think of a connected device, like a smart refrigerator: it requires mechanical engineering, software development, and electrical engineering, coupled with a number of different machines and processes to produce the different components. The marriage of hardware and software is the next trend in innovation: connected devices, automation, robotics, etc.
To better understand “Industry 4.0” and how Chicago has the potential to lead the US as we transition to this new economic model, we reached out to Haven Allen, the CEO and co-founder mHUB, who laid out their vision of a high tech future.
CI: Why is manufacturing in Chicago important?
Haven Allen (HA): Manufacturing is essential to our economy. Although the industry has experienced a dip due to automation and globalization, we are not as hard hit as the Rust Belt. Chicago has major competitive advantages such as world-class universities and a diversified industry base. Our geographical location also allows us to be leaders in transportation and logistics as the capital of the Midwest economy. Our city has the talent, affordable access to advanced hardware, and cloud computing to allow us to have a substantial effect on the larger economy through manufacturing jobs.
CI: What are the differences between software and product, or tech and computer science?
HA: Software-based technology or innovation is generally app or program-based and exists online or through a platform. Physical product technology or innovation requires production of a physical product. Innovation in both categories follow the same path: prototype, testing/iteration, scale, and production/launch.
Software innovation can happen relatively fast and at low-cost. For example, Silicon Valley startup stories often begin in someone’s garage. Physical product innovation has a much longer development cycle and is considerably more capital intensive through iteration.
CI: What challenges do manufacturers face that are unique to their line of work?
HA: The future for the manufacturing industry is the intersection between software and hardware, or “Industry 4.0.” Manufacturers need to stay ahead of the curve as AI, automation, robotics, and other innovations fundamentally change the way things are made. For small and medium-sized manufacturers who are the major backbone for this economy, this is a serious challenge. Innovation is expensive and margins for their businesses are thin.
Access to capital is critical, and difficult, for physical product-based entrepreneurs. Currently there is $15 to $1 funding gap between digital and physical startup companies. This inequity between software and hardware made sense a decade ago, but is a missed opportunity today. This is why it’s critical for innovation centers, like mHUB, to reduce the barriers to commercialization of innovation and products.
CI: How is mHUB supporting the success of manufacturers in Chicago?
HA: Our larger vision is to establish Chicago as a global leader in product development and manufacturing entrepreneurship. To do this, we need to create the conditions for product innovation to thrive. We do this through education and programming, technical training and prototyping resources (including more than $5 million in equipment through 10 labs).
But we’re also on the heels of launching an accelerator program in 2020. mHUB Accelerated Incubation is a hands-on program that pairs demand-driven hard tech startups from across the country with strategic industry leaders and investors for intensive incubation including product design and prototyping, mentorship, business and leadership development, and piloting.
CI: How can people support the mission of mHUB?
HA: When compared to the average midwestern hardware startups, mHUB member companies post higher seed-series revenue and pose a lower risk profile for investment. There is a huge opportunity for investors and other funding institutions to get involved. The technologies being built allow us to partake in a historic disruption in the hardware and physical product space.
People can support by becoming involved in the community. Come to our events, participate in discussions, and join the movement around product innovation and Midwestern leadership in Industry 4.0.