CAPTURING AN INDUSTRY: 3D Printing

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1 CAPTURING AN INDUSTRY: 3D Printing Recommendations for Ensuring California s Dominance of the Emerging 3D Printing Industry Prepared by Joe Weichman July 9, 2013 Created Through the Centers for Applied Competitive Technologies Hub Grant at El Camino College Grant # California Community College Chancellor s Office Workforce & Economic Development Division 3D Printing - 1

2 TABLE OF CONTENTS Background 3 Introduction 4 Applications 5 Economics 6 Industry Feedback 7 Recommendations 8 3D Printing - 2

3 BACKGROUND This report was prepared by the Center for Applied Competitive Technologies (CACT), under the Hub grant from the California Community College Chancellor s Office, Economic & Workforce Development (EWD) program. The CACT helps manufacturers compete successfully in changing markets and the global economy. Through technology education, manufacturing training and services that contribute to continuous workforce development, the CACT provides expertise in technology deployment and business development. Services include onsite training, low-or-no cost technical assistance, and educational workshops, as well as information on how to qualify for state funds to assist with retraining employees and upgrading equipment. The EWD is an integral part of the California Community Colleges, investing funding and resources in key industry sectors. EWD's industry-specific programs invest in the skills of California's workforce now and in the future through highly specialized industry training, technical consulting and business development. The end result is the ability for businesses to better understand the trends and labor market pertaining to their industry, and make informed decisions about how to grow and compete. 3D Printing - 3

4 INTRODUCTION Getting people exposed to 3D printing and what it can do will hopefully encourage people to create their own models and solve their own problems. -- David Pastewka, Dreambox CEO Credit: Digitaltrends.com As its name implies, 3D printing involves the printing of three dimensional devices. This is accomplished by adding one layer on top of another, usually with the source material being plastic or metal. This process is an additive process, which is why 3D printing is sometimes referred to as additive manufacturing. The steps for printing a 3D object are fairly straightforward. Once the user has inputted a digital blueprint via a Computer-Aided Design (or CAD) program, the computer sends that design to the 3D printer, which in turn builds the blueprint one layer at a time until completion. 3D printers also differ from traditional machining in that they create less waste. In traditional machining, material is drilled or cut, with the leftovers generally being discarded. This is one of several advantages of 3D printing. Another is prototyping. 3D printers allow for rapid turnaround of models and usable components, saving not just time but also money. 3D Printing - 4

5 APPLICATIONS We enable people to basically open up their own little company. They can design and test their products and bring them mainstream. -- Peter Weijmarshausen, Shapeways CEO Two-Year Old Lifting and Straightening Her Arms via 3D-Printed Prosthetics. Credit: Stratasys There are a variety of 3D printing applications spanning numerous industries, including medical, automotive, biotechnology and aerospace. From human (and animal) limb replacements to toys, the list of applications seemingly grows each month. A Dutch company recently announced their plans to build a house made out of 3D-printed materials. NASA has begun researching the viability of using 3D printers as a means to feed future space explorers. Recently, NASA successfully tested a 3D-printed rocket component, and is currently researching the viability of using 3D printers to feed future astronauts. To that end, NASA is planning on taking a 3D printer to the International Space Station, to determine if it can perform optimally in a microgravity environment. Recently, a 3D printed device was credited with saving the life of an infant from a respiratory disorder. A splint modeled after the infant s trachea was developed and inserted. The device is made of a benign material that will eventually be safely absorbed into the body, which is right around the time that the splint would no longer be needed. 3D printers have also been credited with giving mobility to a two-year-old girl who suffers from a rare congenital disorder (shown above). Entrepreneurs are continually finding new applications for 3D printers. Given what has already been discovered, one can surmise that 3D printing will eventually impact nearly all facets of society, creating substantial economic activity. 3D Printing - 5

6 ECONOMICS It really is a big deal and it could bring huge economic benefits. Andrew Sessions, Work Foundation Credit: Rich Brown/CNET Given the multitude of applications for 3D printers, it s no surprise that the industry is expanding at a remarkable rate. New 3D printing companies are propping up throughout the United States and overseas. According to Wohlers Associates, in 2012 the 3D printing industry was a $2.2 billion operation, and by 2015 that estimate is projected to increase to $3.7 billion. SmarTech Markets Publishing projects that the 3D printing industry (hardware, software and services) will be a $5.1 billion market by These projections are quite realistic. For example, General Electric is expecting to use 3D printers to help build their next-generation jet engines, and projects by 2020 to have nearly 100,000 3D-printed components integrated into their jet engines. The potential economic impact is so great that the federal government has awarded $30 million to establish the National Additive Manufacturing Innovation Institute (NAMII) in Youngstown, Ohio. NAMII is a consortium of community colleges, manufacturing firms, non-profits and universities, who have matched the award with an additional $40 million. The Institute will be tasked with several functions, including assisting small manufacturers, and training the future workforce in additive manufacturing techniques. When attempting to estimate long-term economic projections for the 3D printing industry, it becomes difficult to quantify. When considering how many applications have already been (and yet to be) discovered, coupled with the increased affordability of 3D printers (which can now be purchased for less than a thousand dollars), it is reasonable to assume that 3D printers may eventually become a permanent fixture in both the office and home. Under this scenario, it could quite possibly become a trillion dollars industry in just a few decades. As such, California could position itself to reap huge economic benefits from the continued expansion of the 3D printing industry. 3D Printing - 6

7 INDUSTRY FEEDBACK It allows us to be far more productive, efficient and innovative in designs. -- Scott Goodman, Mattel Inc. An Edible, 3D-Printed Cake. Credit: Evil Mad Scientists Laboratory Through conferences and other events, the Centers for Applied Competitive Technologies (CACT) has received feedback from those working in the 3D printing industry, and two common themes have emerged. In terms of workforce issues, the most common concern was the turnaround time to train employees. Business owners indicated that it would be beneficial if incoming employees had a better technical understanding of 3D printers, which would reduce the training period and allow businesses to grow more quickly. CAD training was also highlighted as an important skill-set. The other issue cited was California s higher cost-of-doing-business. This feedback mirrors comments by 3D Systems Corporation, one of the largest 3D printing companies that left California in In moving to South Carolina, they cited the cost-of-doing-business, investment/tax benefits, and the overall business climate as their reasons for leaving. Despite this, California can still position itself to capture a large portion of the 3D printing industry. Recently enacted sales tax exemptions on equipment and other components for manufacturers was a major step towards improving the business climate. 3D Printing - 7

8 RECOMMENDATIONS We are no longer bound by economy of scale, manufacturing geometry limitations, and elite marketing and distribution channels. Consumers are afforded more product possibilities as well as options regarding who and where their products come from. -- Josh Harker, 3D Printing Artist Person Outfitted with a 3D-Printed Prosthetic Leg. Credit: Bespoke Innovations Given the potential economics of this fast-emerging industry, California can position itself in such a way that it can capture a substantial economic share of the 3D printing industry, ensuring more jobs and growth in State revenue. Workforce Training In order to improve workforce training for the 3D printing industry, the California Community College system can provide a major role in addressing this issue. Several community colleges have already acquired a 3D printer, but the vast majority lack one. By integrating 3D printers into existing programs, students could better familiarize themselves with the software/hardware, and develop valuable skill-sets that would contribute to the industry. There is also the option to extend 3D printer use to entrepreneurs and small business, which would contribute to economic output. 3D Printing - 8

9 One of the questions posed to industry was what price range would be best for acquiring a 3D printer that is both durable and can provide relevant skill-sets to students. Feedback was fairly uniform in stating that 3D printers below $10,000 would not have the kind of durability required for year-round use, especially if use is extended to small business and entrepreneurs. Feedback also indicated that, to a lesser extent, printers below $10,000 would not necessarily provide users with a full range of skill-sets that can maximize one s potential in the 3D printing industry. This may be due to the increased complexity with higher-end 3D printers. Industry Incentives To expedite expansion of the industry (which includes expansion of existing companies and attracting start-ups), tax incentives for 3D printing manufacturers would go a long way, allowing them a greater capture of the market share, and thus increasing revenue to the State. Waiving the franchise tax board fee and state property tax for the first two years of operation would encourage entrepreneurs to setup a 3D printing business in California. However, for existing 3D printing businesses who stated that the cost-of-doing-business and business climate was a concern, there are so many issues within those two items that it would be arbitrary to recommend remediation. Rather, for a more complete breakdown on issues surrounding the business climate, including viable solutions for improvement, visit the CACT website, and click on Business Climate Surveys, found under Industry Specific Reports in the Resources section. Other options for improving the business climate are available, such as a 2011 report by Lt. Governor Gavin Newsom, entitled An Economic Growth and Competitiveness Agenda for California, which can be found here: Academia Establishing a 3D printing research institute in the UC and CSU system would ensure that California remains at the forefront of 3D printing technology. The institutes would position the UC/CSU to receive additional federal funding, as well as transfer technology to the private sector, creating further economic prosperity. The institutes could also include shared-use functions with the private sector, enabling greater economic growth via assisting small manufacturers and entrepreneurs. In addition to its primary function, it would also be advisable to have these institutes conduct research into 4D printing, which is 3D-developed components that can change their form via external stimuli, such as temperature or water. In other words, 4D printed materials can adapt to their environment. Initial applications being looked at are in construction industries, but will eventually impact many industries, as 3D printed materials are now starting to do. 3D Printing - 9