Manufacturing is in the middle of a revolution. It’s a slowly evolving revolution, where additive manufacturing, also known as 3D printing, is rewriting the rules of traditional manufacturing processes. Product creation is moving from the global, mass-produced model to a more local, individualized future. In many ways, the best of tailored craftsmanship is starting to become available at the scale of the industrial revolution.
Manufacturing companies have always been extremely popular investments. Investors love the predictability, the well-understood operating theory, and the ability to innovate around increasingly sophisticated distribution methods. In fact, they’re the single most common type of company brought to market on Axial, an online network for those looking to acquire, sell or finance private companies, accounting for nearly 30 percent of the network’s deals each year. However, a few firms are starting to rethink their investment thesis as 3D printing makes entirely new business models possible.
3D printing isn’t exactly a new technology—it has been around for nearly two decades—but until recently, all the major firms were protected by strictly enforced patents. When the patents started expiring in 2009, smaller players started selling affordable, consumer-grade printers. While most of the consumer machines aren’t good enough to seriously challenge any of the big players at scale, future patent expirations and rapid development of new technologies are creating an increasingly accelerating path toward disruption.
Over the next couple of decades, traditional manufacturing will be transformed in four significant ways. Mass customization and ultra-precise manufacturing, led by the existing industrial printing companies, will rewrite the cost-to-value equation for large batch orders, while consumer-grade printers will change the way we think about one-off products and rapid prototyping.