Digital Delivery of Physical Goods

I’ve had several interesting conversations in response to this post. One of my friends asked the following:

3D Printers are just another way of automating manufacturing. We have been automating manufacturing for decades, and if you go to a modern automaker plant it is mostly automated already. Why is this going to be any different?

So this got me thinking about what makes 3D printing different from other forms of automation. First, I agree that, on a very general level, a computer controlling an assembly-line robot is not that different from a computer controlling the head of a 3D printer. However, the important distinction is that the movements of an assembly line robot are not generic and do not follow a well-known standard. By contrast, a 3D printer can in principle produce any configuration of matter in space based on a standardized digital format.

Therefore, with 3D printing, the Internet becomes a distribution channel for physical goods. You no longer need to have access to shipping lanes or retail channels, and, most importantly, you do not need to have a lot of working capital to be tied up in the inventory. This is revolutionary because any talented furniture, automobile, or fashion designer will be able to produce an amazing design and have a million or a billion people print out for themselves, paying just for the raw materials and a small margin for the operator of the 3D printer. As a result, it will bring in a lot of new players to the table since most people do not have working capital to produce a million items of their design in a factory and manage the associated inventory and distribution mechanisms.

Also, it’s important to keep in mind that since plants are already very automated and require little manual work, a large component of labor content of creating, say, an automobile or a piece of furniture is in design, management, and marketing. Since there is an enormous social incentive to be the person who created this season’s summer fashion ensemble or a popular piece of furniture, there will be a lot of talented designers willing to do it for free. This is similar to the process by which Open Source software was developed where peer recognition is a key motivation. Because of this, a large monetary component of labor content disappears and costs become even lower.

Second, I think on some level we are inclined to view 3D printer as an evolutionary development rather than a game-changer partly because we are very used to the concept of “printer.” We have all grown up with it, and, furthermore, when 2D printers first appeared, there was no great revolution — people just started using more paper. But we had the 2D printer since well before the digital age. When the printing press was invented in the 15th century, there was in fact an enormous societal change — this was the beginning of the Age of Enlightenment which brought us the Industrial Revolution and continues to this day. What was the essence of the original 2D printer? It was the marginal cost of making copies became negligible, at least compared to the vast labor of copying books by hand. Someone may counter that the invention of the printing press was an information revolution and thus is more appropriately analogized to the Internet, and I would agree; however, my general point is that when the marginal cost of a large class of goods becomes negligible, usually big changes happen. I think the vortex is one possible scenario, but there can be many others.