INDUSTRY TRENDS & INSIGHTS Exploring New York City's Economic Sectors 3D PRINTING ON THE RISE IN NEW YORK CITY | JULY 2013
Highlights P.1 NYC’s 3D printing cluster continues to expand P.2 Employment has risen eight fold since 2010 P.2 $30 million in venture capital was raised last year P.3 Design schools train 2,400 new students each year
Center for Economic Transformation
3D PRINTING, the process of creating three-dimensional objects by applying successive layers of thermoplastics, metals, or other materials,a is one of the newest high-growth industries to center itself in New York City. This emerging technology represents an industry in its own right, but also promises to reinvent existing manufacturing, catalyze new industries and revolutionize product prototyping and design. Along with other advanced hardware and software technologies, it may help shift manufacturing output back to the U.S. A recent market report by Gartner, Inc. suggests cost reductions in industrial grade 3D printers are driving mainstream adoption as businesses use them to customize production and design.1 According to Wohlers Associates, the global 3D printing industry, including all facets of 3D printing technology, took in $2.2 billion last year, up 28.6 percent over 2011, and revenues will grow to $6.5 billion by 2019.2
New York’s Role Many of the 3D printing companies located in New York are focused on making 3D technology accessible to consumers through online services and the development of easy-to-use “desktop” printers. In contrast to industrial-grade 3D printers that have been used in engineering and manufacturing for years, these “desktop” machines are slightly less sophisticated but also less expensive, making the technology accessible to a new category of users. A scan of New York City reveals that there are already at least 20 local private companies, research facilities and collectives that use 3D printers Figure 1: 3D Printing Use in New York City
directly in their supply chain or design process;b two actually manufacture the printers themselves. Additionally, there are at least 10 academic institutions in New York (seen among blue dots in Figure 1) that have integrated 3-D printing technology into their curricula. They are teaching hundreds of new students each year how to model in 3D software and print out designs using state-of-the-art machines. The development of this skilled labor pool is one of the key drivers of growth in the industry in NYC. Anchoring the 3D printing cluster in New York are Shapeways and MakerBot Industries, which are headquartered here and employ over 300 New Yorkers.3 (See Figure 2 below). They added two significant new locations in 2012, with the MakerBot Retail Store opening in NoHo4 and Shapeways’ new “Factory of the Future” opening in Long Island City.5 Both companies have seen increasing demand over their first few years of operation. Brooklyn-based MakerBot Industries estimates that it has around 25% market share of the desktop 3D printer industry and that there are more than 15,000 of its desktop 3D printers in use today by engineers, designers, researchers, and “people who just like to make things.”6 Shapeways, which instead offers on-demand 3D printing services, supports over 8,000 designer shops and had already printed and sold over 1 million objects as of 2012,7 with the goal of increasing this to 3 to 5 million annual objects as the new capacity of its Factory of the Figure 2: Total Employment Among Leading 3D Printing Companies in New York City
300 250 200 150 100 50 0
See a list of popular materials here: http://www.shapeways.com/materials The Maker Map, an interactive open source project which aims to create a global database of maker resources is available here: http://themakermap.com/
Source: MakerBot, Shapeways, Solidoodle July 2013 | 1
Future comes online.8 The availability of this service has helped catalyze a local community of 3D printing hobbyists. Shapeways estimates that 277 of the shops operating on its online marketplace are run by NYC residents, up from 204 in 2012 and just 89 in 2011.9 This demonstrates how 3D technology can allow individuals to quickly turn their creativity into economic output for NYC.
Additionally, although still nascent, this economic activity has led to speculation that 3D printing, along with digital fabrication technologies like CNC milling, laser cutting and others, may help to bring more manufacturing back to the United States.10 Indeed, the major 3D printing companies in NYC have seen significant employment gains over the past four years, growing from around 50 in 2010 to 350 so far in 2013. (See Figure 2)
Parallels with the Personal Computing Revolution Despite these promising signs, the 3D printing industry is still in an early phase of development. A recent article in The Economist compared the current state of the 3D printing industry to that of the personal computing community in the early 1990s.11 While it is still unclear whether 3D printing will be able to create the type of disruption that has occurred through the advent of personal computing, there are some parallels between the two technologies. Like PCs, 3D printers began as bulkier, less-precise machines that were vastly expensive. As recently as 2007, the cheapest 3D printer available cost roughly $30,000, making the technology too expensive for anyone but the largest companies.12 But, due to an evolution of improvements and cost reductions, 3D printing has permeated into more and more industries. In fact, 3D printing is currently well established in many heavy manufacturing and high-tech industries ranging from automotive manufacturing, the military and medical and pharmaceutical companies.13 However, for 3D printing to realize the level of adoption seen in the PC revolution, the industry will need to create products that are priced within range of traditional 2D printers and are reliable and easy to use. A major turning point in this evolution occurred in 2009 when MakerBot debuted its first desktop 3D printer, which was geared toward the consumer market and priced under $2,000. Since then, several other companies have emerged offering similarly priced products, including Brooklyn-based Solidoodle and California-based Printrbot. User interface improvements, another advancement key for growing consumer adoption, have come in the form of native 3D design programs and online, open source 3D design environments. In May 2012, 3D printing reached the mainstream retail market when Staples began carrying a 3D Systems Cube printer priced at $1,299.14
Figure 3: Venture Capital Raised by the 3D Printing Industry in New York City MakerBot
Total VC Funding ($Millions)
To mirror the PC industry’s development into a complex ecosystem of software, hardware and service, 3D printing innovators need investment. One indicator of the continued growth of 3D printing in New York City is the venture capital that flows to local companies. Over the last four years, Shapeways and MakerBot raised over $57 million in early and mid-stage VC funding. In April 2013, Shapeways received an eye-catching $30 million in Series C funding from top venture capital firms Andreessen Horowitz, Union Square Ventures, Lux Capital and Index Ventures.15 In June 2013 it was announced that MakerBot would be acquired by one of the leading national 3D printing players, Minneapolis-based Stratasys, Ltd. Through the acquisition, MakerBot will become a subsidiary of Stratasys but will continue to run its operations from its Brooklyn location. The size of the deal, totalling $403 million in company stock, is noteworthy and is an indication of the market’s optimistic perspective on the future of consumer 3D printers.
Solidoodle, A Brooklyn-based 3D Printer Manufacturer Founded in Brooklyn at the end of 2011 by Sam Cervantes, a former GE aeronautical engineer who had been MakerBot’s COO, Solidoodle has emerged as another Brooklyn-based player in the low-cost 3D printing sector. The second generation Solidoodle 3D Printer that debuted at New York Tech Day in April 2012 is one of the more affordable options on the market today.16 Since its release, the company has seen a dramatic increase in orders, shipping 2,000 printers in its first year.17 Solidoodle’s strategy has been to focus on affordability and ease-of-use rather than striving for bigger, faster printing capabilities. Despite a strong commitment to cost-cutting, Solidoodle manufactures all of its machines at its Carroll Gardens headquarters in Brooklyn, even using its own printers to make some of the parts. Paradoxically, Solidoodle has been able to cut costs even while manufacturing products in the U.S. and it attributes part of this success to the 3D printing technology itself and its application inmanufacturing.18 In a recent interview, Cervantes explained how a $10,000 investment in a fleet of 20 Solidoodle printers—exactly what the company employs in its own factory—can allow a manufacturer to produce 400 parts a day.19 On a small scale, this process is cheaper than other manufacturing options, such as injection molding, and allows for quick and efficient changes to the design by simply updating the software input. During the early phases of product development, when companies are trying new ideas and responding to customer feedback, such flexibility can be crucial. In using its own 3D printers to manufacture its product, Solidoodle has illustrated the potentially “disruptive” impact that 3D printing could have.
Source: Crunchbase.com July 2013 | 2
3D Printing Takes First Prize at the NYCEDC Change The Course Competition Last year, NYCEDC in collaboration with the Hudson River Park Trust sought innovative proposals to repair the many decaying pilings along New York City’s 565 miles of coastline. There are hundreds of these wooden and steel columns that buttress the City against storm surge, erosion and general wear and tear, but many of them are in extreme disrepair and require New York to spend millions of dollars each year to reinforce or replace them. In April 2013, NYCEDC announced that the winning solution came from D-Shape, a famed Italian company that specializes in concrete
3D printing. Their idea is to scan each piling using 3D laser scanning technology and then 3D print concrete reinforcements that are custom fitted and have coral-like organic features on the exterior that offer habitat for sea life. These supports can be printed off-site, floated out into the harbor on an inflatable raft and then fastened to each piling by skilled divers as they sink into the water. D-Shape estimates that their supports will save the City $2.9 billion. As an added benefit, this approach also will allow local artists to add an aesthetic touch to pilings without a significant increase in cost, which may help rejuvenate the waterfront.20
The New York City Advantage So why is this activity occurring in New York? One important factor is the complementary relationships the industry has with another community that is ingrained in the local environment: the design industry. While the 3D printer is not yet a widely used household product, it has already become a popular tool among engineers and, especially, designers. Every member of New York’s top design institutions has a lab with 3D printing capability, and most have seen increasing demand over the past few years as the machines have become more reliable and easier to use. One such lab is the NSF ATE Fuse Labc of CUNY City Tech’s Department of Architectural Technology, which has recently undertaken the challenge of constructing their very own, very large 3D printer capable of printing resin-based building structures. This project, named “ONE:ONE” in reference to the scale ratio, will give undergraduate students the chance to learn exactly how the hardware and software components of 3D technology function.21 (See box above for further discussion of 3D-printed structures). Each year these top design schools churn out hundreds of individuals familiar with 3D technology who are ready to become the future customers and even employees of 3D companies, joining a New York design community that consists of over 39,000 designers and 3,900 design firms as of 2012.22
Figure 4: Summary of Selected NYC Design School 3D Printing Capabilities Year 3D Tech Introduced
Students Using 3D Tech
ZCorp Spectrum Z510 Dimension 3D Printer 3D Systems Cube
CUNY City Tech26
ZCorp Spectrum Z510 3D Systems ZPrinter 650 MakerBot Replicator 2X
Dimension uPrint Plus
NYU Advanced Media Studio28
3D Systems ZPrinter 650 Objet Connex 500 MakerBot Replicator
ZCorp Spectrum Z310 3D Systems ZPrinter 650 MakerBot Replicator
Types of Printers
Note: List not exhaustive.
In addition to these formal academic institutions, New York City also has a relatively large array of membership facilities and research collectives that provide access to 3D printing and other rapid prototyping technologies. New York City’s ecosystem of resources that support product development and fabrication continues to grow: notable launches this past year include CCNY’s Zahn Center for Entrepreneurship in West Harlem and the New Lab in the Brooklyn Navy Yard. These facilities will further develop the 3D printing expertise and contribute to the large pool of talent in New York City, satisfying one of the key conditions of a successful industrial cluster as described by Michael Porter and others.23 In addition, this rich environment allows for the rapid transfer of knowledge and sharing of ideas that spurs innovation, making local companies more productive.24 As these forces gain momentum, more and more 3D printing firms and jobs are likely to emerge from the local environment. More still will feel the draw to locate here. –Jeffrey Bryant
NSF ATE stands for National Science Foundation Advanced Technological Education, which is a federal program that provides funding for institutions that focus on “the education of technicians for the high-technology fields that drive the nation's economy.”
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The Babbage Blog, “3D Printing - Difference Engine: The PC all over again?” The Economist, September 9, 2012. Available at: www.economist.com/blogs/babbage/2012/09/3d-printing
3D Makers, “3D Printing History” posted March 9th, 2013. Available at: http://blog.3dmakers.com/3d-printer-history/
Gartner, Inc., “Gartner Says Early Adopters of 3D Printing Technology Could Gain an Innovation Advantage Over Rivals.” March 26, 2013. Available at: www.gartner.com/newsroom/id/2388415
Staples Investor Relations, “Staples First Major U.S. Retailer to Announce Availability of 3D Printers.” Press Release, May 3, 2013. Available at: http://investor.staples.com/phoenix.zhtml?c=96244&p=RssLanding &cat=news&id=1814995
Copeland, Michael V., “The $30M Bet That Shapeways Becomes a Factory for Everyone.” Wired Magazine, April 23, 2013. Available at: www.wired.com/business/2013/04/30-million-bet-thatshapeways-becomes-a-factory-for-everyone/
Jenifer Howard, Director of PR, MakerBot Industries Jim Allen, Director, Shapeways, Inc. Carlito Bayne, Director of the Output Shop, Columbia University GSAPP Brian Ringley, NSF ATE Fuse Lab Technology Coordinator, CUNY NYCCT Jana Duda, Technology Services Manager, Fashion Institute of Technology Shelly Smith, Manager, Advanced Media Studio Mark Parsons, Director of Production and Technology, Pratt Institute of Architecture Yahea Abdulla, Director of PR, Solidoodle
Gartner, Inc., “Gartner Says Early Adopters of 3D Printing Technology Could Gain an Innovation Advantage Over Rivals.” March 26, 2013. Available at: www.gartner.com/newsroom/id/2388415
CNET, “The Best of NY Tech Day, a showcase of startups.” April 19, 2012. Available at: http://news.cnet.com/8301-17938_10557416439-1/the-best-of-ny-tech-day-a-showcase-of-startups/
Spar Point Group, “Global 3D printing industry revenue reaches $2.2 billion.” May 22, 2013. Available at: www.sparpointgroup.com/News/Vol11No22AM2012/
Solidoodle Press Releases Page, accessed on June 6, 2013. Available at: www.solidoodle.com/press-releases/
Conversation with Yahea Abdulla, Director of PR, Solidoodle on June 6, 2013.
Geek Tech Blog, “Interview: Solidoodle founder sees a coming 3D-printed age.” Tech Hive, March 20, 2013. Available at: www.techhive.com/article/2030232/interview-solidoodlefounder-sees-a-coming-3d-printed-age.html?page=2
NYCEDC Website, “Change the Course Winners,” accessed on June 6, 2013. Available at: www.nycedc.com/waterfrontcompetition
NYCCTfab Website, accessed on June 6, 2013. Available at: www.nycctfab.com/#!1to1app/c1xuq
“Growth by Design: The Powerful Impact & Untapped Potential of NYC’s Architecture & Design Sectors.” Center for an Urban Future, June 2011. Available at: http://nycfuture.org/pdf/Growth_by_Design.pdf
Porter, Michael E. (1998) Clusters and the New Economics of Competition. Harvard Business Review, 77-90.
Saxenian, Anna L. (1996) Regional Advantage: Culture and Competition in Silicon Valley and Route 128. Harvard University Press.
Email correspondence with Carlito Bayne, Director of the Output Shop, Columbia University on May 15, 2013.
Email correspondence with Brian Ringley, NSF ATE Fuse Lab Technology Coordinator, CUNY NYCCT on May 31, 2013.
Email correspondence with Jana Duda, Technology Services Manager, Fashion Institute of Technology on May 15, 2013.
Conversation with Shelly Smith, Manager, Advanced Media Studio, NYU on May 20, 2013.
Email Correspondence with Mark Parsons, Director of Production and Technology, Pratt Institute of Architecture on May 30, 2013.
Email correspondence with Jenifer Howard, Director of PR, MakerBot Industries on May 15, 2013; Email correspondence with Jim Allen, Director, Shapeways on June 3, 2013. MakerBot Industries, LLC., “MakerBot Announces New Retail Store.” Press Release, September 19, 2012. Available at: http://downloads.makerbot.com/makerbot/MakerBot_Store_ press_release.pdf The Shapeways Blog, “Factory of the Future: Our Plan to 3D Print 3 to 5 Million Unique Products Per Year in NYC.” October 18, 2012. Available at: www.shapeways.com/blog/archives/1692-factoryof-the-future-our-plan-to-3d-print-3-to-5-million-unique-products-per-year-in-nyc.html MakerBot Industries, LLC. “MakerBot Wants to Know: What Will You Digitize?” Press Release, March 8, 2013. http://makerbotblog.s3.amazonaws.com/wp-content/uploads/2013/03/Rls_ MakerBotDigitizerf.pdf Smith, Kevin. “Now Anyone Can Use 3D Printing To Make Money.” Business Insider, December 19, 2012. Available at: www.businessinsider.com/shapeways-3d-printing-2012-12 The Shapeways Blog, “Factory of the Future: Our Plan to 3D Print 3 to 5 Million Unique Products Per Year in NYC.” October 18, 2012. Available at: www.shapeways.com/blog/archives/1692-factoryof-the-future-our-plan-to-3d-print-3-to-5-million-uniqueproducts-per-year-in-nyc.html
Email correspondence with Jim Allen, Director, Shapeways, Inc. on June 3, 2013.
Bits Blog, “Disruptions: On the Fast Track to Routine 3-D Printing.” The New York Times, February 17, 2013. Available at: http://bits.blogs.nytimes.com/2013/02/17/disruptions-3-dprinting-is-on-the-fast-track/
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About NYCEDC The New York City Economic Development Corporation is the City’s primary engine for economic development charged with leveraging the City’s assets to drive growth, create jobs and improve quality of life. NYCEDC is an organization dedicated to New York City and its people. We use our expertise to develop, advise, manage and invest to strengthen businesses and help neighborhoods thrive. We make the City stronger.
About NYCEDC Economic Research & Analysis The Economic Research and Analysis group from NYCEDC’s Center for Economic Transformation conducts economic analysis of New York City projects, performs industry and economic research on topics affecting the City and tracks economic trends for the Mayor, policy-makers and the public as a whole. As part of its goal of providing up-to-date economic data, research and analysis to New Yorkers, it publishes a monthly New York City Economic Snapshot as well as the Trends & Insights series of publications covering such topics as Tech Venture Capital Investment, Borough & Local Economies, and Industry Economic Sectors. It also sponsors the Thinking Ahead series of events that brings together thought leaders and stakeholders to discuss and debate key issues shaping New York City's economic future.
Economic Research & Analysis Group Michael Moynihan, PhD, Chief Economist & Senior Vice President Eileen Jones, Assistant Vice President Eileen Tumalad, Assistant Vice President Andrea Moore, Project Manager Jeffrey Bryant, Project Manager Kristina Pecorelli, Project Manager
For more information, visit nycedc.com/NYCeconomics Contact us at [email protected]
July 2013 Industry Trends & Insights Center for Economic Transformation