Some types of cottage industries, in which a small number of individuals work from their homes, include textile and clothing production, food production, rope making, candy making, watch making, manual labor and carpet weaving, notes Harvard Business School. Although these industries were important in the colonial times in the United States, they're still important in developing nations that can't afford to hire mass labor to work in factories, as well as in rural places.
Since developed countries usually have the financial ability to mass produce items at factories, cottage industries are less common since they have trouble competing with the lower costs associated with mass production, notes Investopedia. During the colonial times, however, families would produce clothes, food and other goods in their homes to support themselves, as industrialization hadn't yet led to mass manufacturing. Families would often get raw materials for sewing and household manufacturing from sellers who would visit local homes.