Contrary Research Rundown #31
Skilled labor shortage across American manufacturing, and new memos on BeReal, Hipcamp and more
Research Rundown
In the United States, manufacturing accounts for $2.3 trillion in GDP and employs 12 million people. It represents 11% of the US GDP and contributes disproportionately to the national economy: accounting for 20% of capital investment, 35% of productivity growth, 60% of exports, and 70% of business R&D spending.
However, there is an increasing shortage of labor across manufacturing sectors. For example, America is a world leader in cutting-edge chip design, but its share of global semiconductor manufacturing has declined from 37% in 1990 to about 12% in 2021. Given the importance of chips to the economy and to national security, the White House and Congress have made a big push for onshore high-end chip manufacturing. Yet producing chips in the US still takes 25% longer and costs nearly 50% more than in Asia. One study found that 300K more skilled laborers may be needed to complete US fab projects underway. Part of the reason for this shortage is that the number of US students pursuing advanced degrees in the field has been stagnant for the past 30 years. Many international students are enrolled in relevant programs at US schools, but current policy makes it difficult for them to stay and work in the US. As a result, new plants planned by Intel and TSMC need help finding qualified workers. What’s more, this skilled labor shortage isn’t limited to semiconductor manufacturing.
The construction industry has similar issues; it will need to attract an estimated 546K additional workers on top of the normal pace of hiring in 2023 to meet the demand for labor. Elsewhere, there has long been a disconnect between the secular growth of online commerce and the infrastructure that supports it. As a result, labor shortages of warehouse staff have never been more extreme. The warehousing industry ranks among the lowest in terms of workers’ average hourly wage, and warehouse operators consistently cite hiring and attrition as the top challenge facing their business. As a result, many of the warehouses and third-party logistics providers responsible for receiving, shipping, and sorting items that customers order online need to implement more automation to keep pace with accelerating demand.
Automation may be the most promising solution to these labor shortage issues. Robotic systems can automate repetitive tasks typically done by humans, reducing recruitment and labor costs. Depending on the cost of labor, these systems generally pay for themselves quickly. Moreover, they can help reduce employee turnover and training costs while taking on repeated, laborious tasks with no breaks. Robots can also carry heavy loads and reduce issues related to lifting and repetitive motion injuries for manufacturing workers. In addition, robotic automation increases quality and repeatability and reduces waste. There are ample opportunities for startups like Locus Robotics to build robotic solutions to complement existing labor across manufacturing and other industries, and in doing so help shore up a major piece of the US economy.
Divvy Homes is a real estate platform that facilitates rent-to-own home purchases. It purchases homes and leases them to customers such that a portion of rent goes towards home equity. To learn more, read our full memo here.
BeReal is a social media app designed to meet changing preferences around social media use by showcasing life without filters. To learn more, read our full memo here.
Dutchie is a technology platform powering cannabis commerce, streamlining dispensary operations, and providing safe and easy access for consumers. To learn more, read our full memo here.
Hipcamp is a marketplace that aims to unlock more private land for camping by connecting landowners with campers looking for unique, accessible stays. To learn more, read our full memo here.
Solugen is fusing biology with chemistry and technology and runs a carbon-negative molecule factory that replaces petroleum-based products with plant-derived substitutes. To learn more, read our full memo here.
An early look at the Jack Dorsey-backed federated social network Bluesky. Check out our memos on social apps like Cameo and Discord.
Apple launched its savings account, letting users deposit daily cash rewards into a 4.15% high-yield account.
Chegg announced CheggMate, the new AI learning companion built with GPT-4.
Sega to acquire Angry Birds maker Rovio for $776 million. For our gaming ecosystem coverage, check out our memos on Epic Games, Sorare, and Niantic.
A look at AI agents like Auto-GPT and BabyAGI, which perform multistep tasks by iteratively taking the output from GPT-4 and feeding it back into itself.
A song that used AI to clone the voices of Drake and The Weeknd without the artists’ permission went viral on social media.
Superchat’s new AI chatbot lets you message historical and fictional characters via ChatGPT.
Coinbase CEO Brian Armstrong said, “anything is on the table, including relocating,” from the US if regulatory clarity for the industry does not emerge.
Microsoft has been developing an AI chip, codenamed Athena, since 2019; some Microsoft and OpenAI staff are already testing the chip.
Interview with Bluesky CEO Jay Graber about its protocol, content moderation, and more; he says the federated social network has let in about 20K users so far.
Instagram takes on Linktree and others with a new feature that lets users add up to 5 links in their bios on profiles.
Reddit to charge companies for API access, which many have used to train AI systems. Check out our memo on Reddit.
Lululemon is exploring a sale of Mirror Fitness, a startup it bought in 2020. For our fitness ecosystem coverage, check out our memos on Strava and WHOOP.
Stability AI debuted StableLM, its first suite of instruction-following LLMs, in alpha, starting with 3B and 7B parameters, with 15B to 65B versions to follow.
Atlassian announced Atlassian Intelligence, an AI assistant for Confluence and Jira.
A look at the India Stack, a set of government-backed APIs on which third parties can build apps integrated with payments, loans, and more.
Snapchat’s AI chatbot is now free for all global users, says the AI will later ‘Snap’ you back.
Google announced DeepMind, a new unit combining the DeepMind team and the Brain team from Google Research, with DeepMind cofounder as CEO.
VC funding for Web3 startups fell from $9.1B in Q1 2022 to $1.7B in Q1 2023; the number of public deals fell from 770 to 333, the lowest since Q4 2020.
A look at ActivityPub, the open, decentralized social networking protocol finalized in 2018, as it gains prominence powering Twitter alternatives like Mastodon.
Stack Overflow CEO said the company plans to charge large AI developers for access to the 50M questions and answers on its service as soon as mid-2023.
Google gives Bard the ability to generate, debug, and explain code in 20+ languages.