Cottage Industry Definition: 4 Examples of Cottage Industries

A cottage industry is a small manufacturing business that often operates in the home of the craftsperson, who is also usually the company's proprietor. These decentralized manufacturing businesses produce goods and services and sell directly to consumers at local markets or online.

Cottage industries were the standard manufacturing base in many countries until the Industrial Revolution, which saw a rapid and disruptive conversion to large, centralized, mass-produced goods. Today, cottage industries continue to provide employment opportunities in small communities.

Cottage industries emerged in preindustrial societies because of necessity. Consider these aspects of how cottage industries operate:

• Home production: Before the Industrial Revolution, many households used raw materials like wood and fiber to make tools, furniture, and clothing and sold any excess finished products for profit. Those with exceptional skills went on to specialize in crafts, start small workshops, and eventually integrate into decentralized trade networks with other family-run enterprises.
• Putting-out system: In some cases, makers crafted goods in studios with materials merchant employers provided and then sold them to intermediaries. This approach is the putting-out or domestic system.
• Small-scale business: Today, craftspeople produce goods at home or in studio spaces with their own equipment using traditional methods. Small businesses that belong to cottage industries typically have few employees, require minimal investment, and do not have the scale necessary for mass production.

Cottage industries are a significant part of the economy, particularly in developing countries. Consider the following examples:

1. 1. Decorative handicrafts: There is a worldwide market for handmade goods like jewelry, pottery, and wooden cookware.
2. 2. Musical instruments: Factories mainly produce guitars, but a reasonably robust cottage industry of makers (known as luthiers) still designs and builds high-quality guitars and other stringed instruments by hand.
3. 3. Shoemaking: This is an artisanal cottage industry around footwear, although large-scale factories produce the majority of shoes. You can still find high-end products from cobblers worldwide.
4. 4. Textiles: The textile industry is a classic example of technological change driving a significant economic shift. Innovations like automated weaving machines changed the production of materials for textile designers. Still, there are small-scale cottage industries for weaving fabrics, dyeing fabrics, and sewing clothing.

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