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Exploring New York City's Economic Sectors INDUSTRY TRENDS & INSIGHTS 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
Transcript

Exploring New York City's Economic Sectors

INDUSTRY TRENDS& INSIGHTS

3D PRINTING ON THE RISE IN NEW YORK CITY | JULY 2013

Highlights

P.1 NYC’s 3D printing clustercontinues to expand

P.2 Employment has riseneight fold since 2010

P.2 $30 million in venturecapital was raised last year

P.3 Design schools train 2,400new students each year

Center for Economic Transformation

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

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

July 2013 | 1

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 otheradvanced hardware and software technologies, it may help shift manufacturing output back to the U.S. Arecent 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 WohlersAssociates, the global 3D printing industry, including all facets of 3D printing technology, took in $2.2 billionlast year, up 28.6 percent over 2011, and revenues will grow to $6.5 billion by 2019. 2

New York’s Role

Figure 1: 3D Printing Use in New York City

a See a list of popular materials here: http://www.shapeways.com/materialsb The Maker Map, an interactive open source project which aims to create a global

database of maker resources is available here: http://themakermap.com/

Solidoodle Shapeways MakerBot

2010

Emp

loym

ent

400

350

300

250

200

150

100

50

02011 2012 2013

Figure 2: Total Employment Among Leading 3D PrintingCompanies in New York City

Source: MakerBot, Shapeways, Solidoodle

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

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.

July 2013 | 2

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)

MakerBot

Tota

l VC

Fu

nd

ing

($M

illio

ns)

2010

$35.0

$30.0

$25.0

$20.0

$15.0

$10.0

$5.0

$0.02011 2012 2013

Shapeways

Figure 3: Venture Capital Raised by the 3D Printing Industryin New York City

Source: Crunchbase.com

Parallels with the Personal Computing Revolution

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 in-

manufacturing.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.

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

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

Figure 4: Summary of Selected NYC Design School 3D Printing Capabilities

SchoolYear 3D

TechIntroduced

StudentsUsing

3D Tech

Types ofPrinters

ColumbiaGSAPP25

2003 300ZCorp Spectrum Z510Dimension 3D Printer3D Systems Cube

CUNY CityTech26

2004 70ZCorp Spectrum Z5103D Systems ZPrinter 650MakerBot Replicator 2X

FIT27 2011 35 Dimension uPrint Plus

NYU AdvancedMedia Studio28

2006 8003D Systems ZPrinter 650Objet Connex 500MakerBot Replicator

Pratt29 2008 1160ZCorp Spectrum Z3103D Systems ZPrinter 650MakerBot Replicator

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

July 2013 | 3

The New York City Advantage

c NSF ATE stands for National Science Foundation Advanced Technological Education, whichis 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.”

Note: List not exhaustive.

3D Printing Takes First Prize at the NYCEDC Change The Course Competition

July 2013 | 4

Acknowledgements

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

Sources

1 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

2 Spar Point Group, “Global 3D printing industry revenue reaches

$2.2 billion.” May 22, 2013. Available at:

www.sparpointgroup.com/News/Vol11No22AM2012/

3 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.

4 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

5 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-factory-of-the-future-our-plan-to-3d-print-3-to-5-million-unique-prod-ucts-per-year-in-nyc.html

6 MakerBot Industries, LLC. “MakerBot Wants to Know: What Will

You Digitize?” Press Release, March 8, 2013. http://makerbot-blog.s3.amazonaws.com/wp-content/uploads/2013/03/Rls_MakerBotDigitizerf.pdf

7 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

8 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-factory-of-the-future-our-plan-to-3d-print-3-to-5-million-unique-products-per-year-in-nyc.html

9 Email correspondence with Jim Allen, Director, Shapeways, Inc. on

June 3, 2013.

10 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-d-printing-is-on-the-fast-track/

11 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

12 3D Makers, “3D Printing History” posted March 9th, 2013.

Available at: http://blog.3dmakers.com/3d-printer-history/

13 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

14 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=Rss-Landing &cat=news&id=1814995

15 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-that-shapeways-becomes-a-factory-for-everyone/

16 CNET, “The Best of NY Tech Day, a showcase of startups.” April 19,

2012. Available at: http://news.cnet.com/8301-17938_105-57416439-1/the-best-of-ny-tech-day-a-showcase-of-startups/

17 Solidoodle Press Releases Page, accessed on June 6, 2013.

Available at: www.solidoodle.com/press-releases/

18 Conversation with Yahea Abdulla, Director of PR, Solidoodle on

June 6, 2013.

19 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-solidoodle-founder-sees-a-coming-3d-printed-age.html?page=2

20 NYCEDC Website, “Change the Course Winners,” accessed on June

6, 2013. Available at: www.nycedc.com/waterfrontcompetition

21 NYCCTfab Website, accessed on June 6, 2013. Available at:

www.nycctfab.com/#!1to1app/c1xuq

22 “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

23 Porter, Michael E. (1998) Clusters and the New Economics of

Competition. Harvard Business Review, 77-90.

24 Saxenian, Anna L. (1996) Regional Advantage: Culture and

Competition in Silicon Valley and Route 128. Harvard University Press.

25 Email correspondence with Carlito Bayne, Director of the Output

Shop, Columbia University on May 15, 2013.

26 Email correspondence with Brian Ringley, NSF ATE Fuse Lab

Technology Coordinator, CUNY NYCCT on May 31, 2013.

27 Email correspondence with Jana Duda, Technology Services

Manager, Fashion Institute of Technology on May 15, 2013.

28 Conversation with Shelly Smith, Manager, Advanced Media Studio,

NYU on May 20, 2013.

29 Email Correspondence with Mark Parsons, Director of Production

and Technology, Pratt Institute of Architecture on May 30, 2013.

July 2013 Industry Trends & Insights

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]

Center for Economic Transformation


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