Is 3D Printing Following the Railway’s Tracks?
June 2, 2015
by Marianne Brunet
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In the mid-1840s, the U.K. was just starting to recover from an economic slowdown. As industries started to grow again, and the Bank of England cut interest rates, investors moved money out of government bonds and into railway companies. Speculators poured money into what they saw as a disruptive technology that would reduce production costs and bring huge increases in efficiency. But the technology was overvalued and the price of U.K. railway shares spiked to unprecedented levels, creating a speculative bubble.
Then the bubble collapsed and the U.K. experienced one of the most severe financial crashes the world has ever seen.
The British Railway Mania of the 1840s is considered the greatest technology hype in history. Although railroad developments were instrumental to the U.K.’s Industrial Revolution, investors ultimately overvalued the technology because they underestimated the costs associated with it.
Given the growing excitement around 3D printing, also known as additive manufacturing, is it possible that we are in for another “hype-cycle”?
That depends on whether 3D printing will force a transformation in the way products are designed and built.
Many firms with a vested interest in promoting the 3D printing industry have been raving about the transformative potential of this technology (much like railway companies promoted themselves). They argue that 3D printing technology will reform global manufacturing by allowing firms to reduce development time and cut costs.
But investors haven’t rushed into 3D printing the way they did with railway companies. The independent research company Canalysis estimates the sector stood at a mere $2.5 billion globally in 2013. Moreover, although the 3D printing industry is still considered to be in its infancy, it’s not new. A Morgan Stanley paper explained that 3D printing techniques have been around since as early as the mid-1980s.
So why are recent research reports by reputable institutions, like the McKinsey Global Institute, suggesting that this industry could have an impact of up to $550 billion a year by 2025?
They are assuming that 3D printing will become a disruptive technology by making the jump from the design shop to the factory floor in the next decade.
Is 3D printing the next big thing?
3D printing is a generic term for a manufacturing process that makes three-dimensional objects from a digital computer-aided design model.
Currently, additive manufacturing is only complementary to traditional manufacturing because 3D printers are mainly used for prototyping or for the production of highly complex parts. This is why large firms like GE, Siemens and Hewlett-Packard are investing in the industry.
But will 3D printers displace traditional manufacturing and impact global economies?
I will explain how 3D printing is already transforming many industries and why so many believe it will transform economies. I will also discuss the potential implications this has for the global economy.
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