Additive Manufacturing: Present Capabilities and Likely Future Impact

Abstract This essay reviews the technical and popular literature on Additive Manufacturing (AM) and draws inferences regarding the implications of this technology for the near future. It provides an overview of AM processes and present applications, paying particular attention to the emerging field of bioprinting. Subsequently, it evaluates the strengths and weaknesses of AM relative to traditional manufacturing practices, followed by a more-detailed discussion of the implications for intellectual property protection. It goes on to explore the impact of AM on business models and geopolitical relations, applying several innovative frameworks and ultimately concluding that AM promises creative destruction comparable to that of the Internet.

Overview Additive Manufacturing (AM), or 3-D printing, builds objects layer-by-layer from base materials, in contrast to traditional manufacturing techniques that remove material via milling, lathing, or other subtractive processes (Petrick & Simpson, 2013). Broadly, there are three methods of AM: extruding material through an inkjet-style syringe, selectively fusing material by applying light and/or heat, and selectively binding material by applying a glue or binder with a nozzle. Desktop consumer printers fall into the first category, which uses a process known as Fused Deposition Modeling (FDM), or thermoplastic extrusion. The second category is typically used for high-performance industrial manufacturing, and includes processes such as Selective Laser Sintering (SLS), Stereolithography (SL), and Electron Beam Melting (EBM). The third category includes binder jetting, which is often used for creating casts and molds (Bogue, 2013). Detailed descriptions of the various processes are beyond the scope of this essay.

Objects are printed from digitized blueprints made in CAD programs or from 3-D scans of existing objects. Recent decades have seen the digitization of text, image, audio, and video. Now, physical objects are being digitized as well (Barnatt, 2013). The ramifications of this breakthrough are difficult to overstate. Since the industrial revolution, economies of scale have been necessary to offset the fixed costs of expensive plant and machinery (Petrick & Simpson, 2013). With AM, economies of scale are no longer essential, as there is no additional cost in tooling or labor to create a unique object. For the first time, the marginal cost of increased complexity is near zero. This massive reduction in the cost of complexity is comparable to the first industrial revolution, which grew out of a similar reduction in the cost of energy (Lipson, 2012). As a result, product customization is feasible on an unprecedented scale, and the era of standardized mass production of simple goods is approaching its end. Until recently, AM, which has existed since the 1980s, was primarily used as a tool for rapid prototyping (creating models of products without the need to build expensive molds and tooling for each prototype). While this technique provides better ROI for R&D expenditures and enables better and faster design, the truly revolutionary potential for AM lies in Direct Digital Manufacturing (DDM): printing out finished products. DDM is expected to comprise roughly 80% of industrial 3-D printing by 2020 (Markillie, 2012). While DDM only accounts for about 20% of 3-D printed products today, hardware, software, and materials are improving at a rapidand increasingpace (Birtchnell & Urry, 2013). The possibilities for AM seem almost limitless, and many have compared the industry to personal computing in the early 1980s (Campbell et al., 2011). AM is already being used to create finished products and parts in the prosthetics, dental, aerospace, automotive, fashion, art, and energy industries (Petrick & Simpson, 2013). The European Space Agency is developing plans to 3-D print a base on the moon using lunar soil (ESA, 2013), and Airbus plans to print entire jumbo jets by 2050 (Barnatt, 2013). One of the most exciting applications of AM is bioprinting. 3-D printing of living tissue holds the promise of solving the worsening shortage of human organs available for transplant (Mironov et al., 2006). Although the field is progressing rapidly, major improvements are needed in cell,

biomanufacturing, and in vivo-integration technology. The main technical challenge is creating vascularized structures, i.e., printing the organ tissue with integrated working blood vessels (Ozbalat & Yu, 2013). Further obstacles include the need for long-term testing to prove that the organs will be nontoxic and resilient inside the body (Mironov et al., 2006). A roadmap to successful organ bioprinting begins with creating blueprint models of organs and their vascular architecture for the printer to follow, and progresses to isolating the patients stem cells and differentiating these into the cells of the needed organ(s), followed by printing those cells inside a bioreactor that would enable the organ to survive long enough for transplantation (Ozbalat & Yu, 2013). As a result of these and numerous other applications, the industry is expected to grow nearly fivefold in the next eight years (Beiderman, 2013). Compared to traditional manufacturing techniques such as injection molding, machining, and casting, the main advantages of AM are: ability to create more-complex objects; greater accuracy in reproducing designs; faster prototyping; less material input; no expensive one-time prototype tooling; and near-instantaneous global distribution via digital files. AM can also reduce warehousing and disposal costs, as there is no need to keep stores of products or spare parts. Another benefit of AM is the ability to keep machinery in service even when it is no longer in production. AM gives users the ability to create parts as needed and thus to extend the lives of their machines dramatically (Campbell et al., 2011). AM can also be used with numerous materials (metals, plastics, ceramics, glass, polymers, concrete), and can produce a wide variety of products in the same location (Bogue, 2013). Sustainability is another advantage of AM. By using only the material needed to create each object, AM produces virtually no waste. Further, it requires fewer toxic chemicals and often uses less energy. In addition, by enabling manufacturing closer to end users, AM reduces the need for shipping of both final products and constituent partsa paradigm shift from the current global-supply-chain model necessitated by economies-of-scale manufacturing (Campbell et al., 2011).

However, despite the many benefits of AM, it is far slower than other processes, and even with expected improvements, injection molding will likely always be faster. Further, materials must be improved and quality-controlled, and design reproduction across machines is inconsistent (Campbell et al., 2013). Software-hardware compatibility must also be improved (Petrick & Simpson, 2013). Another drawback is that printing larger objects multiplies the cost, time, and material input by a factor of three, so that printing the same design three times larger will take 27 times longer and use 27 times the material (Bass, 2013). However, while true for any given 3D blueprint, this view fails to take into account that AM can create designs too complex for subtractive techniques, so that a large AM object may use far less material than a comparably sized, traditionally manufactured object.

Intellectual Property The three main types of IP protectioncopyright, patent, and trademarkall face challenges from the rise of 3-D printing. Copyright typically lasts for at least 50 years and is automatically granted upon creation of an original work. There is no need to register, and no novelty requirementa work can be identical to another copyrighted work provided it is original, meaning that the creator was unaware of the earlier work (Weinberg, 2010). Typically, copyright applies to literary and artistic works, although in some cases it can apply to products such as dolls (Hornick & Roland, 2013). Traditionally, copyright only applies to objects deriving their value purely from aesthetics, while functional objects must be protected by patent. There are exceptions, however, and copyright law has developed the severability test to determine whether functional objects can also be subject to copyright. If a non-functional part of the object (decorations, aesthetic design) is valuable irrespective of the objects functionality, the nonfunctional part can be protected by copyright (Weinberg, 2010). Further, under the TRIPS agreement, a legal framework enforceable in most countries, computer programs are considered literary works and granted copyright protection (WTO, 2013). As consumer 3-D printers become more widely adopted, it will be essentially undetectable for individuals to print out copyrighted objects in their homes, and IP

holders will have little recourse, as the recording industry proved the futility of attempting to sue a large and distributed body of consumers (Hornick & Roland, 2013). Patents are the primary form of IP protection for physical objects. The requirements for patent protection are more stringent than those for copyright, and the period of protection is shorter, typically 20 years. Further, patents are not automatically granted, and must be applied for (Weinberg, 2010). Many aspects of patent law are likely to be challenged and modified as AM threatens the current system just as digital media have challenged the copyright system. Perhaps the greatest challenge to patent protection in the AM era will be proving that someone has violated a patent. Whereas simply downloading a file is proof of copyright infringement, a patent holder must prove that the user printed out the object and did not simply possess the plans (Weinberg, 2010). Enforcing patents in an era of distributed manufacturing would thus be far more difficult than enforcing copyright in the current era of digital information. Given the present widespread disregard for copyright (Carr, 2011), this bodes ill for the value of patents for simple objects (those that could be produced by the relatively small and unsophisticated consumer printers). There are several strategies patent holders may pursue to buttress their legal protections. One likely strategy is to push for an expansion of copyright and elimination of the severability test (Weinberg, 2010). This would eliminate the novelty requirement and grant a longer period of IP protection for objects. Patent holders will likely argue that their designs should be considered literary workslike software programs under TRIPSonce the ability to print out objects is widely available. Such a broad definition of copyright would, however, create other legal issues, as eliminating the novelty requirement would necessitate new standards for determining when knowledge of an existing design could be assumed (i.e., firms or individuals could claim to have independently created identical designs). Patent holders will also likely attempt to use the doctrine of contributory infringement to sue enablers of patent infringement such as file-hosting websites and manufacturers and retailers of 3-D printers and materials. However, it is necessary to prove actual infringement, not just the possibility or likelihood. Therefore,

such third parties would in most cases be protected by the staple article of commerce doctrine, which holds that if something has legal as well as potentially illegal uses, it is protected. This doctrine has protected VCR and computer producers from similar litigation (Weinberg, 2010). 3-D printers can make exact copies of products, including trademarks, so counterfeiting trademarked goods will be extremely easy. This undermines the licensing business model for trademarked goods, as licensees would have no incentive to pay for a right that is no longer valuable. One likely countermeasure is to license IP to specific AM firms, who would then have incentive to help police the industry (Ferdinand & Howald, 2013). Since legal protections will be exceedingly difficult to enforce, IP holders will likely attempt physical restrictions: a patent has been granted for a printer feature that would prevent the printing of any IP-protected object. Further, Thingiverse, the online database of 3-D designs, will likely have to amend its IP policy to protect itself from lawsuits (Greenberg, 2012). Even so, demand will be met by supply, and there are technical workarounds such as an anonymous Deep Web marketplace for protected designs or open-source, self-replicating printers that can print all of their own components. Overall, it is likely that large gray and black markets will exist alongside successful online stores comparable to iTunes or Kindle eBooks, and also that AM will be a bonanza for IP lawyers.

Business Models IBM projects that AM and related technologies will create a software-defined supply chain that will reduce manufacturing costs by an average of 23% within a decade. Even more significant, the economic scale of production could drop by 90%, lowering barriers to entry so much that existing firms would face a competitive onslaught from new entrants catering to customer micro-segments that cannot be serviced profitably under present conditions (IBM, 2013). AM could mean the end of global supply chains, large warehouses and factories, and the jobs they support (Johnston, 2011). As a result, some of the largest firms could face severe disruptions of their

business models. For example, Amazon has committed to a massive global supply chain centered around enormous warehouses, and it has done this despite lackluster profit margins (Thompson, 2013). Supplychain management and inventory management will become far less complex, and may in some cases be eliminated (DAveni, 2013), and the container-shipping, packaging, and airfreight industries will likely contract as designs, rather than goods, are shipped (Petrick & Simpson, 2013). This creative destruction (Schumpeter, 1934) will eliminate countless jobs, as well as some business models and even industries, but as with earlier disruptive innovations like electricity and the Internet (Brown, 2000), new jobs, business models, and industriesprinters, materials, designs, manufacturing centers, printed products, etc.will emerge (Campbell et al., 2013). Indeed, AM will complement and amplify several existing frameworks and methodologies. The related trends toward customization (Pine, 1993) and localization (Rigby & Vishwanath, 2006) have been noted for some time. In brief, there is a shift in retail and consumer goods from massproduced, standardized products, to locally produced and customized products. The standardization model has reached the point of diminishing returns. Markets are saturated with cheap, generic goods, and standardized products are easily copied. Therefore, firms that offer customized products and services tailored to local needs can build sustainable competitive advantage (Rigby & Vishwanath, 2006). AM is poised to drastically amplify these trends, as everything from clothing to household items can be customized and locally produced. A related framework is co-creation of value, which is marked by a transition away from the firmcentric view that value is created exclusively inside the firm. As products and services become increasingly commoditized in the globalized economy, traditional methods of product differentiation (e.g., marketing) are no longer effective and the roles of consumer and producer are no longer distinct. If the firm offers a product, customers will buy on price, but firms that recognize the opportunity to cocreate value with their customers by interacting with them to create great experiences can capture value unavailable to other firms because it is created at the moment of transaction. Co-creation differs from

customization in that customization often remains firm-centric: the customer can choose from a set of predetermined options but cannot actively participate in value creation (Prahalad & Ramaswamy, 2004). AM allows customers to literally co-create physical products by altering designs to meet their specific needs, and printing out products at home is an even more co-creative customer experience than the classic example of an eBay auction. The lean startup methodology focuses on customer development and iterative design to increase the success rate of new ventures. The idea is to create a Minimum Viable Product as quickly as possible and get customer feedback right away rather than spending more time and money to create a polished product customers may not want (Blank, 2013). AM will facilitate this process by increasing speed to market and reducing the risk of going to market, as products can be printed on demand and thus require less upfront investment (Markillie, 2012).

Geopolitical Ramifications Broadly, developing countries will lose manufacturing jobs but gain access to products that meet local needs. Export-based economies will suffer as manufacturing becomes more localized. Those with large internal markets will find the transition easier, and countries with competitive advantage in design (e.g., Germany, Japan), may export designs and use FDI to set up local AM centers in consuming countries (Campbell et al., 2013). By reducing or eliminating manufacturing labor costs, AM will erode the competitive advantage of cheap labor in the developing world. This has the potential to shift a significant portion of the manufacturing base back to the developed world (Markillie, 2012). China, which lags behind the West in AM technology, is an obvious loser here, as its economic might depends on cheap labor and massive economies of scale (DAveni, 2013). Other emerging economies following the Chinese model (Vietnam, Malaysia, Indonesia, Myanmar) will struggle even more, as they lack Chinas enormous internal market. In contrast, the US and to a lesser extent Western Europe and Japan are poised to benefit from the AM

revolution and thus strengthen their geopolitical positions. With well-developed consumer markets and sophisticated educational and entrepreneurial infrastructure, these countries also lead the way in AM technology (Campbell et al., 2013).

Conclusions As we have seen, AM is a revolutionary technology whose impact will touch every nation, industry, and individual. It has many advantages over traditional manufacturing techniques, and as it changes the economic, legal, political, and cultural landscapes AM will be a major engine of creative destruction. As with any disruptive technology, there will be a confusing period of reorganization as society comes to terms with the new paradigm and adapts its systems and institutions to new realities. On the whole, the emergence of 3-D printing as a mature technology offers reason for optimism. Its potential benefits to human health, creativity, and comfort, as well as to the environment, outweigh the accompanying structural unemployment, business-model disruption, and threats to intellectual property. 3-D printing has the potential to do for physical objects what the Internet has done for information: enable much wider distribution far faster and at greatly reduced cost. There will be casualties along the way, but AM will spawn new industries and new ways of life. Consumers will benefit from a greater variety of products tailored to their individual needs; producers will save money on inventory, materials, and labor; and everyone will benefit from a cleaner environment, reduced waste, and greater resource efficiency.

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