2012, Year of Opportunity

2011 was a difficult year for many sectors of the US economy.  World markets were about the same as at home.  The general weakness was felt world wide with currencies, especially the dollar and the Euro, declining due to bank failures in EU, financial crises in Greece and Italy, unrest in the Middle east creating concerns about stable supply of oil, runaway spending in the US and low sales numbers in new car sales and new home sales, two of the “bellweather” indicators of economic strength.

Alternative energy in the US has failed to produce the return on investment or to create new jobs in any significant numbers.  Car sales have picked up significantly over 2011, but not nearly at the rate of 16 million cars/year as in the heyday of that industry.  The real estate bubble has burst after a decade of speculation and bad lending practices that continue to depress new construction.

The second industrial revolution, Henry Ford’s industrial revolution, was about mass production and cost reduction.  For almost 100 years we have been perfecting the centralized manufacture of almost everything around us.  Economies of scale that enable volume manufacturing of consumer electronics at lower cost year after year are the result of the Ford approach to manufacturing.

So where do we go from here?  We start re-inventing the industrial revolution.

The new wave of manufacturing has begun with the advent of the Maker Bot and a family of low-cost fabrication tools that can manufacture based on 3D printing techniques.  While solid model prototyping has been around for some time, the magic ingredient is a new family of machines that cost less than $2000. and some recent new entries around the $1000 mark.  At these price points, it doesn’t take a lot of volume to justify the purchase of one of these machines.

There are advanced processes that are becoming available to generate sintered metal parts, even titanium parts, using processes resembling the additive manufacturing process.

Amortization cost is the secret.  Lowering amortization costs and minimum order quantity at the same time results in a fantastic breakthrough in productivity.  It also lowers the barrier to entry into new markets.  So if you have an idea for something that’s never been done before, the cost for development may be a lot lower than you think.  And thousands of people have begun to jump into the mainstream economy because of the availability of these new tools.

While the “maker” tools are limited to plastics, there is progress in the metals arena as well.  The computer numerically controlled (CNC) machine tools have traditionally been the domain of 6 figure costs, HAAS has been making $50,000 machines and last year Tormach entered the market with the “Personal CNC”, a high quality machine that is priced at $10,000.

My prediction?  There is going to be a lot of activity at the $10,000 and below price point to come up with low cost machine tools as a complement to the “maker” bot 3D printer technology.  Additive manufacturing will require a complementary subtractive manufacturing infrastructure at a comparable price point.

And creative American engineers and tinkerers will be leading the way.