3D printing ready for lift-off
9 October 2017
A recent ING report explores the major effects the 3D printing revolution could have on trade flows. Who will be the winners and the losers?
When a rocket blasted off into the grey sky above a remote peninsula in New Zealand last May, the event marked a number of firsts. It was the Pacific nation’s first space launch and also the first-ever lift-off from a private spaceport.
But the other first was probably the most remarkable: the engine of the rocket, built by US company RocketLab, was made almost entirely by 3D printing.
More than key chains
No longer a novelty technology known to most people as a way to make cute but inconsequential things like key chains and small toys, 3D printing is now spreading to a range of important sectors, and with some revolutionary results.
It allows affordable customisation in a small scale setting not possible in the past. Through the layering of materials that is the basis of 3D printing, it lets manufacturers cheaply produce intricate objects that previously involved many pieces assembled in costly and complex processes. And it is being used to produce materials that are more resilient.
“You can compare 3D printing with the internet,“ says ING economist Raoul Leering.
“3D printing first appeared 30 years ago. That’s also about how long it took for the internet to go mainstream. The technology has come of age and you see it being applied on an increasing scale in areas like healthcare, with customisation of things like hearing aids and artificial hips. Or in aerospace, where 3D printing makes it cheaper and easier to make specialised parts, aerodynamic shapes and lighter, stronger materials. And investment in 3D printers is growing fast in the automotive industry and machine building. Consumer goods like electronics, toys and even sneakers are now 3D printed. Food production is possible with 3D printers. They’re making pizzas with them.”
Make it local
One major effect of this revolutionary technology is the subject of a recent study authored by Raoul and published by the ING Economics Department under the title 3D printing: a threat to global trade. It explains that because 3D printing reduces the role of labour, once the technology is widespread, offshoring production to low wage countries will no longer make economic sense. The result: more things used locally will also be produced locally, reducing trade flows.
Isn’t this bucking the trend in a world that’s increasingly connected? Not really, says Raoul.
“Before the financial crisis, global trade was growing twice as fast as GDP. The crisis reduced that pace and though the pace is up because of the current global economic upturn, it won’t return to the heydays of the 1990s and early 2000s due to a number of structural factors. One of those is the ‘local for local’ trend. People are focusing more on local products. The 3D trend fits right into that.”
There will be some losers. Global transport, logistical sectors and ports, and countries like the Netherlands that play a key role in the movement of goods between large export and import markets, will need to adapt to lower trade flows.
But there will also be wins from the process. Some big trade imbalances, like the ones the US currently has with Mexico and China, should go down by themselves over the next couple of decades, reducing the chance of trade wars and conflict. And businesses that take advantage of new domestic markets for products that were previously bought overseas will also see growth opportunities.
According to one scenario in the report, based on a doubling of investment growth in 3D printing over the next five years, world trade could be 40% less by 2040 than it would have been without 3D printing. So the clock may already be ticking for those hoping to be ahead of the trend.
“But don’t forget that overall trade will continue to grow,” says Raoul.
“So globalisation isn’t over. It’s just going to go at a lesser pace. You could call it slow-balisation.”