Disruption

Last week I covered Rapid Prototyping and the way it changes the development cycle.  I see this as an incremental as opposed to a disruptive change.  People who embrace it will have advantages over individuals and companies who are blind to the possibilities. There are still tried and true methodologies for product development which work and will continue to work.  That said, much like driverless cars and trucks will radically change insurance, police department budgets, and the long haul trucking industry, 3D printing has the potential to disrupt industries such as home building and small parts manufacturing.  I will talk about how these industries could be affected and then outline why 3D printing has the potential to be such a game changer.

Currently, construction employs a lot of people who work on various portions of the house.  I find it hard to imagine a world in which people don’t build homes, but that might be less farfetched then we think.  There is a company in China that is currently printing out houses.  While they may not be considered luxury homes by American standards, from a demonstration point of view it is a crucial first step to using 3D printers to make homes.  Even if they are not used to finish the houses, what happens when the printers are used to create the foundations?  According to the National Association of Home Builders (NAHB), there were 504,000 new homes constructed in May of this year.  What if we move a portion of those homes over to being built or part of them being built by 3D printers?  Per the NAHB, 6 million people will be employed in construction in June of this year.  These jobs tend to be decent pay with consistent, local work.  3D printers can change that as they displace sections of the industry.  I can foresee a future where a single operator monitors multiple printers printing out houses, office buildings, retail shops, etc.  Many of the people currently doing these jobs would be displaced from work that was once considered untouchable.

Disruption will come to retail.  The timing depends on a number of things, but  as printers continue to develop, they are likely to become as ubiquitous as home printers and copiers.  People will simply download a schematic for a product and print it.  This poses a problem for retailers for a couple of reasons.

First, some of the parts which are ideally suited for 3D printing, such as small specialty parts, are high margin and usually needed quickly.  This means retailers can command a higher price and people will pay the premium as opposed to waiting.  The disruption comes when manufacturers digitize their parts catalogs and sell the CAD files for people to print, idling existing factories. 

Secondly, I foresee a direct to print market where people design and then sell the CAD files.  Shapeways already allows people to do this.  As printers expand, consumers will remove the middle men and either purchase designs directly from manufacturers or download them from the shady corners of the internet.  Will people pay or pirate?  I think it's more a pricing and convenience issue as opposed to an ideological one.  Look at the iTunes model. Make it easy, make it cheap, and people will use it.  Lock them into your hardware ecosystem and they may never leave... But hardware lock-in should probably be a separate discussion.

The crux is to think not in current business model framework, but to look at how the technology can be utilized in different ways.  The two examples I have outlined are pretty straightforward.  However, I think they are closer to actualization than science fiction.  The opportunity lies with individuals who anticipate the change and challenges to their industries and business models.  The defunct Borders bookstore highlights the potential consequences to retailers and organizations who do not anticipate the transformation of their industries.  As previously discussed in the blog, 3D printing has the possibility to do anything.  Some will adapt this technology to their benefit.  Others will go the way of buggy whip makers and blacksmiths.