Open Innovation: Lessons from 3-D Printing

When people in online user communities start collaboratively developing open-source innovations that have the potential to change an industry, how should the existing companies in the industry respond?

Also known as “additive manufacturing” or “rapid prototyping,” 3-D printing is the printing of solid, physical 3-D objects. Unlike machining processes, which are subtractive in nature, 3-D printing systems join together raw materials to form an object. Drawing on a computer-aided design (CAD) file, the design for an object is first divided into paper-thin, cross-sectional slices, which are then each ‘printed’ out of liquid, powder, plastic or metal materials in sequence until the entire object is created. The use of 3-D printing makes it possible to build physical models, prototypes, patterns, tooling components or production parts. Design and manufacturing organizations use it for product parts in the consumer, industrial, medical and military markets.

…many limitations of existing production processes are removed, allowing a wider range of design options.

The longer-term implications of 3-D printing technologies are believed to be large. Direct advantages include enabling designers to operate more efficiently and conveniently. They can quickly prototype their designs in order to test their viability or demonstrate them. In addition, 3-D printing is increasingly used to manufacture products or parts in small batches that would be too costly for a traditional production line. Moreover, 3-D printing enables entirely new products to be developed. With layer-wise 3-D printing processes, many limitations of existing production processes are removed, allowing a wider range of design options. Widespread use of 3-D printing will also likely have implications for production, logistics and retail, since there will be less need to centrally fabricate products and distribute them if individuals can download and locally print a product’s design.

However, 3-D printing is not new. Industrial 3-D printing manufacturers have been offering their products for more than 20 years now. Their machines were initially sold to larger R&D-based organizations that require high-quality objects and are able to afford a premium price. Currently, more than thirty 3-D printing companies around the globe offer a range of industrial 3-D printing systems drawing on various technologies. More expensive systems produce fine-grained metal and polymer parts, while simpler systems use plastics to create 3-D objects. In 2011, total industry revenues for industrial and professional purposes had grown to more than $1.7 billion, including both products and services. The industry’s compound annual growth rate has been 26.4% over its 24-year history, and double-digit growth rates are expected to continue until at least 2019.

While early systems were mainly sold to large, multinational customers, 3-D printing manufacturers more recently started to focus on the lower end of the market, offering increasingly cheaper machines to make 3-D printing a viable option for small businesses, self-employed engineers and designers, schools and individual consumers. Indeed, 3-D printing is expected to eventually become a mass market.

In the past two years, 3-D printers for home use have emerged on the scene. Not very long ago, no such product existed, but thousands of 3-D printers for home use are now being made annually by new startup companies. Five years ago, users started to collaboratively develop home printer designs and to share their open-source designs on the Web. This attracted new users, some of whom also made innovative contributions, and an open-source 3-D printing community soon developed. More recently, users started to found their own businesses, which are now commercializing open-source-based 3-D printers.

Innovation by user communities may be expected to increasingly compete with and, in some cases, displace corporate innovation in many parts of the economy.

Innovation by user communities may be expected to increasingly compete with and, in some cases, displace corporate innovation in many parts of the economy. This shift is driven by new technologies — the transition to increasingly digitized and modularized design and production practices, coupled with the availability of very-low-cost, Internet-based communication — and a general trend toward better-educated citizens capable of engaging in innovation activities.

Key questions for innovation-oriented companies then become:

  1. Under what circumstances are companies most likely to see innovation by user communities?
  2. Does user innovation pose a threat or opportunity for our company?
  3. How can we respond — and how can generally useful innovations be identified from user communities?

Anything that can be cost-justified for development by a user collaborative and that does not involve significant economies of scale in replication and diffusion is theoretically a candidate for open collaborative innovation and diffusion. Such collaborative innovation is more likely to happen in three types of environments: nascent industries, industries where some potential users are not yet served and industries where some users are not served adequately.

By Jeroen P.J. de Jong and Erik de Bruijn


This article is excerpted and adapted from “Innovation Lessons from 3-D Printing,”, by Jeroen P.J. de Jong and Erik de Bruijn, which appeared in the Winter 2013 issue of MIT Sloan Management Review. Photo credit: Group of businessmen from Shutterstock.com

 

Ad

STAY CONNECTED

 
Ad