A.T. Kearney: 3D printing market to grow to $17.2 billion by 2020

Aug 25, 2015 | By Alec

We here at 3ders.org love to speculate about the fantastic and sometimes peculiar steps the 3D printing industry and community are taking, but from our biased position it can be difficult to predict long-term trends. However, it was already obvious that the market has become quite a big international player – being valued at $4.5 billion recently. But now consultancy firm AT Kearney is adding fuel to our optimism with the publication of a recent study, which predicts that the market is set to triple in value over the next couple of years to $17.2 billion by 2020. On the wave of improving hardware and technology, they contribute a major part of this growth to the energy and jewelry sectors.

To explain, A.T. Kearney is a global management consultation firm with offices all over the world. They specialize in market analysis and providing large companies with strategic advice. While this fascinating study has doubtlessly been written to advertise themselves, they are obviously in a good position to judge market trends and offer advices to both 3D printing companies and companies thinking about stepping into the industry. And in their recent study, titled ‘3D Printing: A Manufacturing Revolution’, they give a particularly interesting overview of where the technology stands in today and what it is expected to do over the next five to seven years.

First of all, there’s the value. According to the study, which they define as the market for hardware, supplies and services, is set to greatly expand. The current market is valued at approximately $4.5 billion, in which the Aerospace (including Defense sector) industry accounts for 18% similar to the value of the Industrial (including Construction) sector (also around the 18%).The medical sector is currently takes care of about 16%, while the Automotive and Jewelry sectors both have about a 12% market share. Energy is good for 5%, with the remaining 20% being covered by miscellaneous sectors – including us home users.

So where is all that growth supposed to go to? Well, AT Kearney is expecting the market to grow with a Compounded Annual Growth Rate (CAGR) of 25% to reach $17.2 billion by 2020. Remarkably, a huge portion of that growth is attributed to something we regular people can contribute to – Jewelry, which they project to grow between 30% - 35%. The Energy sector is also predicted to grow by a remarkable 25% - 30%. Unexpectedly, the remaining sectors are projected to grow a bit slower, at a rate of 20 to 25%.

While the 3D printing revolution isn’t set to fully overhaul everything, the researchers are confident that it will become a major player soon. ‘The question is not if but when companies need to embrace 3D printing’, they write. ‘Although traditional manufacturing will have cost advantages in large scale production settings for the foreseeable future, 3DP’s role will grow in settings where these five dimensions are crucial for success, such as prototyping (lead time and speed), personalized medical implants (mass customization), and jet components that require a complex assembly have high fly-to-buy ratios (new capabilities and waste reduction).’

Indeed, those points are recognized as the major features pushing this revolution forward. Mass customization is a key point which they recognize as appealing to a large group of customers, while new capabilities enable the mass production of goods without high-fixed capital costs. Coupled with the decrease of production time and the fact that 3D printers are efficient and can be placed in every store, they predict that the nature of production itself is set to change. ‘Digital fabrication will allow individuals to design and produce tangible objects on demand, wherever and whenever they need them. The revolution is not additive versus subtractive manufacturing; it is the ability to turn data into things and things into data.’ Neil Gershenfeld, director of the Center for Bits and Atoms at MIT, says in the report.

At the same time, however, 3D printing is not without its challenges. In particular, there is the hardware issue. The researchers feel that 3D printing technology is set to improve drastically over the next decade, though that is a necessity for this growth as well. ‘Hardware could be five to seven years away from achieving the technical and cost requirements needed to go beyond its currently prototyping role into supporting production across broad, multi-material categories’ they write. And in the years after that, 3D printed production of cars, Apple watches and more should also become possible, they speculate.

And just as science teachers everywhere have been reminding us, the future of 3D printing also relies on better education and more accessible and powerful software solutions. Indeed, the authors argue that the concept of 3D design thinking is inhibiting the growth of 3D printing itself, as only about 1% of the US population is 3D design literate. That knowledge needs to be more accessible and more available for this revolution to move forward.

Despite those ifs, they are certain that 3D printing will grow into a tremendous economic force that needs to be reckoned with. In fact, they even go as far as offering some advice to companies not currently involved in the 3D printing industry. It’s of crucial importance, they say, to take it into account while looking at your own future – even when not looking to work with 3D printers themselves. ‘How will 3D printing shape the end-to-end-value chain in my sector? How robust is my firm’s five-to ten –year value chain strategy against 3D disruptions? What are the leading indicators and trigger points for anticipating 3D disruption?’ they ask.

While not a perspective we usually approach the technology from, the economic implications of this industry are evidently huge enough to justify this perspective. At the same time, however, it is evident that a lot of work still needs to be done before this growth can be realized. This also means there is still a huge role that startups and scientists can play in the development of the technology. You can read the full report here.

Posted in 3D Printing Company

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