How 3-D Printing Could Reverse Outsourcing

The world is in the early stages of another industrial revolution, one that could reverse some aspects of globalization. Additive manufacturing, more commonly known as 3-D printing, as well as intelligent industrial robotics and other software-based manufacturing technologies, are reducing the advantage of low labor costs. Eventually, they will fundamentally change how goods are made by enabling manufacturing to move closer to consumer markets and eliminating the need to search for cheap labor or produce and assemble parts in different locations away from the assembly plant. These changes will decrease trade in intermediate goods and components and lessen the need for physical inventories, shortening and simplifying global supply chains in the long run.

Industries with high-value, low-volume products or parts, including the medical, aerospace and automotive industries, have already adopted additive manufacturing and will drive much of its initial development. But to fully integrate additive manufacturing into mainstream commercial production, making actual components and products instead of prototypes, several hurdles still need to be overcome, especially for printing metal parts. These advancements will partially depend on the materials used in the process, including metal, ceramic, plastic or any future materials. As the volume of metal printing increases, so, too, will the demand for a key component: metal powder. The powder must be uniform, free of defects and high quality, regardless of the metal used. Today’s powders, even those of the highest quality, are not optimal for 3-D printing. Further investment into material science research and development will be needed to meet the demand for high-quality materials and to help eliminate post-printing modifications.

Developed nations, especially the United States, parts of Asia (Japan, China, Taiwan, South Korea and Singapore) and Northern Europe, will be the first to develop and adopt 3-D printing technologies. They will also be the ones to benefit most from the technologies, which will raise the productivity of highly skilled workforces to the point that assembly, fabrication and processing using cheap labor no longer makes business sense. Put another way, 3-D printing could reverse outsourcing. Developing countries may not fare so well as 3-D printing and other technologies diminish their opportunities for growth. And as trade moves more toward finished products — many produced in or near consuming nations — there will be fewer chances for developing countries to promote economic development and diversification.