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3-D printing 'can spark economic revolution'

New York, March 8, 2012

The rise of three-dimensional printing, or additive manufacturing, has the potential to spark a revolution in industry and re-shape the global economy, says James Saft, a Reuters analyst.

The process, in which highly customizable products are literally sprayed into existence using something not too dissimilar from an ink-jet printer, offers advantages so important it may undermine the century-old dominance of the assembly line and the supply chain.

From an economic standpoint additive manufacturing may prove a massive break for the US, possibly erasing the significance of it having allowed its manufacturing base to be hollowed out by a global supply chain and cheap labor in Asia.

Not surprisingly, 3-D printing is less good news for Germany, Japan and especially China, all of whose economies are built around the system of global supply and massive economies of scale.

George Magnus, senior economic adviser at UBS, said: 'I think it will achieve very high, exponential rates of growth.
The logic is so compelling.'     

In 3-D printing the first stage is computer-assisted design of the product followed by production using a printer-like device which typically sprays material through a nozzle or solidifies liquids using glue or a beam of light. The product is thus built up additively, as opposed to the old style of subtractive manufacturing which uses tools to whittle and bang away at material.

Production doesn't have to take place in a factory because there is not the same amalgamation of parts, as in the building of a car. That means there is much less emphasis on the economies of scale that are needed to make a huge factory economically viable.

Customizing products is much less expensive and involves much less of a delay. The process also involves much less labor, with the emphasis on the high-value design and research functions rather than the human-aided repetition of today's high-tech factories.

At the same time the forces that have created the global supply chain that dominates so many industries, with various parts being produced most efficiently and cheaply in often hugely distant places, don't really apply in 3-D printing. Why build a component in China if labor is a small cost and losing intellectual property is a big risk?

In short, 3-D printing has the capacity, if it succeeds, of upsetting all of the forces that gave us the global economy as we know it, with research and design in California leading to the creation of components in Stuttgart, Shenzhen and Taipei for an end-consumer in Baltimore.

Thus far the use of 3-D printing is tiny, in global terms, but the application and sophistication are growing rapidly.

Aerospace and defense company EADS is working towards producing aircraft parts using 3-D manufacturing at its plant in Filton, England, a step towards widespread production of larger parts and eventually possibly complete large products.

To be clear, the growth and impact of 3-D printing will play out over a long time - perhaps the next 20 years, according to Magnus, and the outcome is highly uncertain. That said, the cost, customization and capital use advantages argue for rapid growth.

This could prove a huge boon for places in Europe and the US where ideas and technology have tended to originate, while penalizing  places like Germany and China which have done well out of manufacturing excellence and low cost.

Besides making it easier to put production closer to the place where the end consumer lives, the rise of 3-D printing will place a huge premium on research, on innovation and, crucially, the on protection of intellectual property rights.  
This is a process that is not labor-intensive, though it will create a large number of highly skilled positions. It is also, in dollar-per-dollar output terms, going to end up being less capital intensive than old-style production. This will be partly offset, especially at first, by the high levels of start-up capital 3-D manufacturing needs and will attract.

We may need to re-think our assumptions about the death of developed world manufacturing and the rise of emerging markets. 3-D printing, like the rise of the assembly line before it,  may change just about everything. - Reuters




Tags: China | revolution | 3-D printing | additive manufacturing |

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