3D printing technology enables economies to produce goods locally, so the conventional wisdom has been that it would dramatically reduce international trade; However, new research from the University of California, San Diego and the World Bank presents strong evidence that 3D printing has expanded commerce.
The article co-authored by Caroline Freund, economist and dean of the School of Global Policy and Strategy, finds that 3D printing has changed production processes, but supply chains have remained intact. The study is the first to examine the impact of 3D printing on commerce.
Posted in the Journal of International Economicsthe article looks at the production of hearing aids – a good most often produced by 3D printing.
The results reveal that the switch to 3D printing resulted in a doubling or near doubling of producers’ exports after five years and that the technology was the main cause of the increase in exports.
Freund and his co-authors also looked at 35 other products, such as running shoes, airplane parts and prosthetic limbs that are increasingly being 3D printed, and they found similar designs.
“Technology is a boon, not a curse to commerce,” Freund said. “A country’s exports of hearing aids have increased more than trade in other similar products as a result of manufacturers’ adoption of 3D printing. The new production technology combined with trade means that consumers around the world people with hearing loss benefit from better and often cheaper hearing. AIDS.”
One of the reasons for this expansion is that printing hearing aids in large quantities requires a significant investment in technology and machinery. Countries that were early innovators – Denmark, Switzerland and Singapore – dominate exports of the good, while middle-income economies such as China, Mexico and Vietnam have also been able to significantly increase their market shares.
Additionally, hearing aids are lightweight products, making them relatively cheap to ship internationally. The same is true for the other products examined by the authors – lighter products are associated with greater trade growth.
These results are based on comparisons of the growth of 3D printed products against other similar products. The authors also took into account trends and other factors that could skew the data.
“Policymakers often see 3D printing as a way to shorten supply chains when in fact it is more likely to improve trade and reshape supply chains,” said Freund, a former Global Director for Trade, Investment and Competitiveness at the World Bank.
Although the analysis of the impact of 3D printing on trade is positive, it may be short-lived. If 3D printers become more accessible to local producers or even consumers in certain sectors, production could be more localized, hampering development opportunities through trade.
The study “Is 3D printing a threat to global trade? The trade effects you haven’t heard of” is co-authored by Alan Mulabdic, Economist for the Office of the Chief Economist of Equitable Growth, Finance and Institutions at the World Bank, and Michele Ruta, Senior Economist at the World Bank.
Source of the story:
Material provided by University of California – San Diego. Original written by Christine Clark. Note: Content may be edited for style and length.