A hangover from the pandemic, war in Ukraine, global supply chain issues and depleted gas supplies have placed a strain on the global economy.
It has hit the pockets of everyone, from consumers to corporations. And the additive manufacturing hasn't been immune. In the last couple of years, one company has seen its public listing fall through due to changing market conditions, another made it onto the stock exchange but filed for bankruptcy, some have closed down their AM businesses altogether, and more than a few outfits have been forced to reduce their head counts through redundancies.
With the cost of living, and running a business, not looking like easing up anytime soon, we asked several leading AM professionals their thoughts on how global economic uncertainty might affect the additive manufacturing industry moving forward.
Davide Marini, co-founder and CEO, Inkbit
I think the drivers of uncertainty are pretty clear. What is happening around the world is a lot of instability clearly. So, I think this will be, in my opinion, an important driver for the growth of the 3D printing industry, for sure. From a classic economics perspective, it's extremely important that the different countries specialise in different products, and then you trade and everybody gains. But given the tensions that now are seen around the world, I wonder if this idea is theoretically correct. So, for example, the US never really had what one would call an industrial policy. I wonder if this may be revisited in the future. I don't know. But I really think that goods should be produced in the US versus abroad. This will be a question that will be at the forefront of Congress. In my opinion, it will have a positive impact on 3D printing.
The first time whenever anybody hears: 'We're going to produce everything in our country.' You think nationalism. But I wonder if this idea may be revisited and 3D printing for sure will enable a renaissance in the world of manufacturing. There is already a passion in the United States for small companies manufacturing their own products, just like in Italy. Italy has been always like this. But I think this passion for making fantastic products that are made with your heart in a small family owned company will spread also to the United States. I see it already. And 3D printing is for sure an enabler.
Ziad Abou, CEO, Quickparts
On the economical uncertainty, I think personally it can be a great opportunity for 3D printing like COVID was at some point for some technologies. Because this next phase of economical uncertainty will come because geopolitical tension, at some point it was the dotnet bubble, it was 9/11. This time, it will come from geopolitical challenges. And geopolitical challenges will mean more, not nationalism, but more protection, and not any more the ability to go and outsource everywhere where we worked. So, perhaps, if [US relations] will worsen with China, we'll not be able anymore to outsource everything in China, there will be a tariff war, barrier, a lot of things. So, this will bring more work to home. And today, because we are not any more set up to manufacture everything by the traditional ways, this will be a great opportunity for manufacturing in 3D printing. So, I can be wrong, but I think this new economical crisis can be a great opportunity for 3D printing, as a new technology or a technology that was not discovered, perhaps, as much or used as much as it was before.
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Like Zoom. Zoom existed before COVID. Not a lot of people were using it, they discovered the utility when they stopped being able to go and visit their friends or travel to do meetings, and 3D printing exists, a lot of people know it, but they will be using it more and more, if they will not be able to do their parts in other countries, or they will not be able to visit anymore their provider to do checks.
Lisa Block, Chief Revenue Officer, Hybrid Manufacturing Technologies
I believe the direct impact of our current economic uncertainty will be fear of adoption. It is my humble opinion that we must be proactive and educate on the value of adopting additive solutions, so that our clients are confident that this industry is here to stay. Fear in a climate of this nature is expected. It will be our response to that fear that will make the difference for our businesses and for our clients. Additive still solves problems; it is still rife with the amazingly diverse technologies that it has always possessed. Our current climate does not change the innovative nature of our community. We must be more intentional about introducing the solutions that work. We must prioritise delivering them on time and on budget. I believe if we are committed to executing the completion of our projects in this way, we will restore their faith in our industry and give them the security that they had before.
Obviously, some of our colleagues have had some misfortune. The beautiful thing about the additive manufacturing industry is that we are all connected in this special and unique way. It is my hope that we are all optimistic for each other and are binding together as we endure these unfortunate times. Trust me, not one of us is unaware that we can be in the same position of some of our less fortunate counterparts, I hope we all display the utmost compassion, integrity, and dignity because we are all in this together.
Lawrence Ganti, CEO, Fortify
I think what's going to happen is you're unfortunately going to see some companies lose focus and pivot. And pivoting is important for entrepreneurial survival, but it sometimes can also be detrimental. We've made a decision based on our product attributes and the value we can provide. For example, the focus on RF and electronics, that happens to be in an industry where the end customers are in aerospace, defence, space, 5G, which right now, we're not expecting to have so much impact on a global recession versus consumer goods, versus fashion, versus footwear, versus whatever.
And I think it's important for people to think about that when they're raising money. I think it's important for people to think about that when they're hiring people. Because when you're thinking about hiring a lot of times people think about what's the situation today? And then what you don't want is in six months to be in a situation where you have to lay people off, so I think growth is important, but being aware that this is the economic situation in '23, I've heard people thinking that it could drag into '24.
There are new governmental leaderships in a lot of different big markets. It's difficult to say how that's gonna pan out. You have China, which is not a change, but it's a change in the sense that it's securing a longer-term leadership in China, which could change the way they take decisions. Brazil has new leadership, US is likely to have some changes at leadership in the next election cycle. UK has gone through its fair share. So, I think it's important to keep that in mind. It shouldn't be the driver of decisions. But it definitely should be something that people are aware of to say, 'Okay, it's another variable.'
Blake Teipel, co-founder & CEO, Essentium
The economic uncertainty is terrible. I mean, I had a an aerospace client that we've been in discussions with for 18 months, had budgetary approval granted and then rescinded, granted and then rescinded. And then the most recent communication I had with these guys, and these guys are at tier one, it's a prime contractor for the US government. And he was like, 'Yes, we're excited about the machine. We got budgetary approval for the 2024 budget cycle.' So, they can't buy a $200,000 solution until 2024. And that's just one example. There are many other examples that I have where decisions are pushed out to the point where they are non actionable decisions. So, the economic uncertainty is a very large driver of that.
Also, what we see though, if you talk to large established brands, like an HP or somebody like that, apparently, they're having a lot of success on high velocity of sales and so on. So, I think that people are turning to brands they recognise and trust. And so they're comfortable to take an HP machine. Or they're comfortable to take a Stratasys machine, maybe, because it's like, 'this is a defensible decision.' People are turning to brands they trust and not to take any credit away from HP for what they've built. Their ecosystem now is really good. They make lots of parts very fast, highly accurately, their cost per part is very low, relative to the competition. They're selling based on their own merits, but they're also selling because it's a defensible choice.
Tali Rosman, Fractional C-Level and Startup Advisor, RHH Advisory
Economic downturns always present significant challenges, especially with companies cutting CapEx budgets and reducing spend on certain innovation domains, impacting their spend on AM.
That said, AM can support supply chain agility and flexibility (e.g. reducing spend on excess inventory, reducing waste & scrap, and enabling faster response times), which can be appealing to companies seeking to improve their operational efficiency. AM providers who can demonstrate the ROI and business case around these initiatives, might be able to fare well.
Last point relates to the AM startups and emerging players. With overall VC funding significantly reduced, these players might suffer from insufficient access to funding. One advise to them would be tapping into government funding that’s available for technologies enabling supply chain resiliency and improved sustainability, as AM can offer a compelling case here as well.
Natalia Funkner, 3D Printing Analyst, CONTEXT
The impact of geopolitical instability has indeed caused many end-markets to reign-in CapEx spending a bit which can challenge AM investment. Forecasts for 2023 have turned cautious as fears of regional recessions loom large. Inflation remains a major headwind in most major geographies.
Bradley Rothenberg, co-founder and CEO, nTop
I believe the AM industry will be stable through the uncertainty. There is a renewed focus coming to manufacturing and the ability to iterate as fast as possible is critical to delivering the right products throughout this period. AM enables this and is being used for some of the most strategic parts and components that are being manufactured right now. These real, valuable applications of AM are most likely the last areas to get cut in a recession.
However, when the value of AM in real, industrial applications has not been realised, i.e., AM is used only experimentally / purely in a research environment, I would expect there to be pullback during uncertainty. Additionally, this economic environment will filter out some of the “magic” technologies that do not really solve real problems. This will actually be good for the industry, so we focus on real, valuable applications of AM, of which there are many.
Sona Dadhania, Technology Analyst, IDTechEx
On one hand, global economic uncertainty tends to discourage investment in R&D, a traditionally strong application for additive manufacturing; IDTechEx found many 3D printer manufacturers observed this firsthand with COVID-19. Additionally, economic uncertainty can discourage spending by consumers, which would impact another major sector for AM – industrial manufacturing.
On the other hand, supply chain disruptions are exposing the need for companies in all sectors to invest in resilient supply chains. This has driven interest in AM, a more flexible and responsive manufacturing technology, since 2020, and there’s no sign of these disruptions abating anytime soon. Companies may also see this as the right time to strengthen their supply network through targeted investments, like in AM, to position themselves well for the time following this economic uncertainty. 3D printing companies are likely to see firsthand the push and pull between these competing factors in their interactions with end-users.
Yann Rageul, Commercial Leader of the Industrial Business for EMEA and Asia, Stratasys
The impact of global economic uncertainty on the additive manufacturing (AM) industry is significant. The fragility of global value chains and disruptions caused by recent events such as geopolitical conflicts, labour shortages, and the pandemic, has prompted manufacturers to seek solutions that deliver speed, adaptability, and flexibility. AM has emerged as the ideal solution for manufacturers to facilitate an immediate switch in production by enabling local, on-demand production.
The trends we are seeing in the economy show us just how connected the whole manufacturing process is. Disruptions to supply chains has been causing an imbalance in supply and demand, which, in turn, produces a rise in inflation. In such uncertain and changeable landscapes, investment in innovation, such as AM, can help businesses with immediate challenges by providing manufacturing flexibility and reducing costs. Manufacturers can explore options such as replacing machined metal parts with FDM-printed polymer-composite parts and switching from traditional manufacturing processes like injection moulding to new, faster AM technologies like SAF.
