NEW YORK CITY was once the capital of manufacturing in America, with more than 1m people working in the sector in 1950. Today that number has shrunk to a mere 80,000, and they are employed largely by specialist producers in areas such as furnishing, food processing and the cluster that makes up Manhattan's vibrant garment district. Yet nourished by the city's entrepreneurial spirit, a new industry is emerging. It might be called social manufacturing.

One of the firms involved is Quirky, which is as trendy as its name suggests. Its new design studio in a converted warehouse near the Hudson river includes a small factory complete with a couple of 3D printers, a laser cutter, milling machines, a spray-painting booth and other bits of equipment. This prototyping shop is central to Quirky's business of turning other people's ideas into products.

With the help of a growing online community, Quirky comes up with two new consumer products a week. It works like this: a user submits an idea and if enough people like it (as on Facebook), Quirky's product-development team makes a prototype. Users review this online and can contribute towards its final design, packaging and marketing, and help set a price for it. Quirky then looks for suitable manufacturers. The product is sold on the Quirky website and, if demand grows, by retail chains. Quirky also handles patents and standards approvals and gives a 30% share of the revenue from direct sales to the inventors and others who have helped.

Quirky's most successful product so far is called Pivot Power. It is a $29.99 electrical extension lead with adjustable sockets, which makes it easier to plug in different chargers. Jake Zien of Milwaukee came up with the idea when he was at high school, submitted it to Quirky and was helped by 709 people to bring it to market. By early April, with over 200,000 of the gadgets sold, Mr Zien had made $124,000 from his invention.

By using its community as a sounding board, Quirky can quickly establish if there is a market for a product and set the right price before committing itself to making it. Much of the firm's production is carried out by subcontractors in Asia, particularly China. The speed with which they can turn designs into products is hard to match anywhere else, says Ben Kaufman, Quirky's chief executive. Additive manufacturing is not yet capable of doing this on a large scale, he points out, but that could change.

Quirky is hoping to make more things in America because it sees benefits in being close to manufacturing technology. “The amount of creativity that happens when you are standing next to a machine that's making hundreds of thousands of things is much greater than when you are working 4,000 miles away,” says Mr Kaufman. “Your mind is spinning as to what else you can design for the machine to make.”

Shapeways, another online manufacturing community, specialises in 3D-printing services. Founded in 2007 in Eindhoven in the Netherlands, where it maintains a European production centre, the company moved its headquarters to New York City, where it is setting up a second 3D-printing operation. Last year Shapeways shipped 750,000 products, and the numbers are growing rapidly. Shapeways' users upload their designs to get instant automated quotes for printing with industrial 3D-printing machines in a variety of different materials. Users can also sell their goods online, setting their own prices. Some designs can be customised by buyers, for example by putting their initials on cufflinks.

Easy online access to 3D printing has three big implications for manufacturing, says Peter Weijmarshausen, Shapeways' chief executive. The first is speed to market: Shapeways had covers for iPads on sale just four days after Apple first launched the device in 2010. Second, the risk of going to market falls to almost zero because entrepreneurs can test ideas before scaling up and tweak the designs in response to feedback from buyers. Some Shapeways products go through 20-30 iterations a year. And third, it becomes possible to produce things that cannot be made in other ways, usually because they are too intricate to be machined.

Can you imagine?

There are plenty of surprises in what people come up with. Recent examples include curious crablike walking devices, some propelled by a small windmill, designed by Theo Jansen, a Dutch artist (the Dutch seem to have a natural affinity with 3D printing). These are printed in one go, complete with all the moving parts. “If you give people access to creative technology in a way that is not scary they will find ways to use it that you cannot imagine,” says Mr Weijmarshausen. And that technology is becoming easier to use all the time. When Shapeways began, half the files uploaded could not be printed because of mistakes or faults. Now the success rate has gone up to 91%, thanks to software that automatically fixes problems.

Rajeev Kulkarni, who runs 3D Systems' consumer business, wants his firm's first consumer 3D printer to be simple enough for children to use. Cubify, its online consumer service, also provides 3D printing and e-commerce, and is forming partnerships with organisations such as Freedom Of Creation, a design group that specialises in 3D-printed products.

Once in digital form, things become easy to copy. This means protecting intellectual property will be just as hard as it is in other industries that have gone digital. Online content will need checking for infringements, says Mr Kulkarni. And there will be some tricky areas. For instance, what happens if a visitor to Disney World in Florida takes a series of pictures of Cinderella's castle, converts them into a 3D digital file and uses that to print and sell models of the castle online? Mr Kulkarni is relaxed: “It is something we will have to figure out, but it should not be a hurdle to innovation.”

The internet is already making life easier for traditional manufacturers by allowing them to buy parts and assemblies from all over the world. One online group, Atlanta-based MFG.com, provides a cornucopia of manufacturing services with more than 200,000 members in 50 countries. Firms use it to connect and collaborate, uploading digital designs, getting quotes and rating the services provided. In some ways, online manufacturing communities like this could turn into the virtual equivalent of an industrial cluster.

As online services and software spread more widely, they will also allow customers to take part in the production process. For instance, Dassault Systèmes, a French software firm, has created an online virtual environment in which employees, suppliers and consumers can work together to turn new ideas into reality. It even provides lifelike manikins on which to try out new things. The way products might fail, how they could be fixed and how they can be taken apart for disposal can also be modelled by computers. Software firms call such services “product life-cycle management” because they extend computer modelling from the conception of a product to its demise, which nowadays means recycling.

Just as digitisation has freed some people from working in an office, the same will happen in manufacturing. Product design and simulation can now be done on a personal computer and accessed via the cloud with devices such as smartphones, says Mr Rochelle of Autodesk, the Silicon Valley software company. It means designers and engineers can work on a product and share ideas with others from anywhere. What does this do for manufacturing? The way Mr Rochelle sees it, “it means the factory of the future could be me, sitting in my home office.”