This three-part series starts from a basic insight: through advances in digital manufacturing, raw materials are fast becoming intelligent assets. Thought of another way, material flows are becoming information flows. Here we will explore the implications for the circular economy. In part one we investigated the technological advances that are encoding intelligence into materials. Part two explored the trends in storing, communicating, and using materials data. In part three we explore the resulting impacts on supply chains and business ecosystems, and discuss the business models that stand to benefit from emerging trends.

If materials are becoming intelligent assets in digital fabrication, we must understand how businesses are creating value from this. After exploring the growth in production and access to data on materials in a previous article, now it’s time to look at how new, platform-type business models are mediating the production of goods, and the implications this may have for circular economy aims.  

Even basic 3D printers can be reprogrammed to create new designs at near zero marginal cost.

Digital fabrication processes like 3D printing are ‘software-defined’, meaning the production process is driven by digital data.1Brody, P., & Pureswaran, V. (2013). The new software-defined supply chain (pp. 1–18). IBM Institute for Business Value. Compared to the hard-wired capital costs of setting up an assembly line optimised to produce thousands of the same object, a 3D printer can be reprogrammed at a keystroke to produce a different object with near zero costs. Unlike mass manufacturing, the set up costs of digital fabrication are comparatively low and the process inexpensive to alter. Because of this flexibility, digital fabrication enables a greater variety of products to be made per unit of capital investment.2Garrett, B. (2014). 3D Printing: New Economic Paradigms and Strategic Shifts. Global Policy, 5(1), 70–75. doi:10.1111/1758-5899.12119

The software-defined nature of digital fabrication makes it a perfect candidate for a new class of business models that have come to dominate the digital age: the platform business. Detailed in a recent article in the Harvard Business Review, platforms are the champions of 21st century business: think Google, Facebook, Twitter, and Apple. With soundtracks on Spotify or images on Pinterest, platform businesses capitalise on easily scalable information goods. A clear example of a platform business model is Apple’s app ecosystem, where Apple provides the platform for app producers and consumers exchange value.

Platform businesses operate on a clear logic: value is generated by producers and consumers interacting with one another through the medium of the platform. This flips the logic of 20th century manufacturing on its head, where the firm produces value through a set of linear links in the supply chain and then sells it to the consumer. The latter is called the ‘pipeline’ business model: think Apple making iPhones by producing value internally through its supply-chain, and then selling the finished product to the consumer. The shift from pipeline to platform business models can be characterised as: (1) moving from control to orchestration of resources, (2) moving from internally optimising the product supply-chain to externally interacting with producers and consumers who are the sources of value; and (3) moving focus from customer to ecosystem value, where consumer benefits stem from the value of the platform ecosystem and not just an individual product.3Garrett, B. (2014). 3D Printing: New Economic Paradigms and Strategic Shifts. Global Policy, 5(1), 70–75. doi:10.1111/1758-5899.12119

The pipeline business model has traditionally dominated the production of physical goods. Digital fabrication, however, introduces digital product designs (i.e. CAD models) as scalable information goods that are well suited to being units of value on platforms. Thingiverse, YouMagine, Autodesk 123D, My Mini Factory, and GitHub are examples. Platforms like Shapeways, Sculpteo, i.materialize, and Ponoko go one step further. In addition to facilitating consumers and producers of digital designs, consumers can choose the material they want their design to be fabricated with. The platform company then coordinates the printing and distribution of the final product through a network of 3D printing service bureaus. A more decentralised model of producing physical goods is 3D Hubs, a platform where people who have a 3D printer can produce goods for others. Consumers can upload their digital design, select from a range of offered materials, and choose a local printing service. Since its founding in 2013, its user base has grown exponentially to a 40,000 strong network, and it now includes a range of services from makers to professional 3D printing service bureaus.  

Image: 3D Hubs

There are also new business platforms offering more professional digital fabrication services, including in-depth materials data. There’s Additively, a platform that facilitates connection to professional 3D printing service bureaus and a materials library with engineering data on mechanical properties. OptiMatter, a software platform that helps customers select materials on the basis of material properties and product performance, and source from those material suppliers gives another illustration.   

The advent of these platform businesses for the production of physical goods has important implications for the circular economy. Business models mediate how producers and users interact. Digital fabrication platforms are allowing users to engage in materials-related decision making during the production process itself. On Shapeways or 3D Hubs they choose what materials they want, as well as the design for their product. Decisions such as material selection, shape and form, are no longer made by firms and their tightly managed supply-chain relationships. This has two main implications: first, the points of leverage for influencing product supply chains are becoming radically dispersed. Second, more people, in more places, have an opportunity to engage with data on materials to make product design decisions.

Considering these observations, how do we facilitate more circular materials choices and product design in the manufacturing platforms of today and tomorrow? There is a need to expand circular economy analysis and efforts beyond the current focus on more traditional pipeline businesses. In addition to working with a few large firms to change how and where they source materials, as well as how they use these materials to design products, we must come to terms with a world where anyone, anywhere, may be a product designer, and more and more people have incentives to source raw materials for primary goods production. This challenge becomes even more acute when we consider the trend in manipulating materials in ever more sophisticated ways, such as mixing materials and varying their density through the build process (see part one).

These trends in decentralised design and manufacturing could also create opportunities to establish a more circular economy. If more people in more places are allowed to participate in material selection and design of physical goods through platform ecosystems, providing tools that accord with circular economy principles may have massive impact. Platforms are not neutral spaces, and through their market dominance powered by network effects, they may wield considerable power.4Rushkoff, D. 2016. Throwing Rocks at the Google Bus: How Growth Became the Enemy of Prosperity. New York: Penguin. As facilitators of value creation, they can offer tools to both producers and consumers. If one day soon consumers have these tools for materials design at their fingertips, and the ability to choose what kind of materials they want to fabricate with, we have the chance to rethink the levers of change needed to accelerate a transition to a circular economy.  

A place to start may be offering tools on digital fabrication platforms that encourage biomimetic product design, such as generative software. Another is encouraging the growth of markets in recycled materials and natural polymers for consumers and producers to choose from. What is clear is that we are only at the very beginning of a shift in business ecosystems and product supply chains brought on by digital fabrication. The ways businesses are creating value in this emerging landscape are critical to understand for any circular economy analysis. For it is these business models that are opening up the opportunity for all of us make use of the raw intelligence of materials in the digital age. What we do with this information remains to be seen.   

Share or save for later:

References   [ + ]

Previous post

Infographic from Rutgers University: Moving towards a circular economy

Next post

Book Review: A Good Disruption

The Author

Alysia Garmulewicz

Alysia Garmulewicz

Alysia Garmulewicz is a Professor at the Universidad de Santiago de Chile and has a Ph.D. from the Saïd Business School, University of Oxford. She researches 3D printing and the circular economy, with a focus on local materials markets for digital fabrication.

No Comment

Leave a reply

Your email address will not be published. Required fields are marked *