The Industrial Revolution marked a major transformation in the way the world manufactured and produced goods. Humans largely went from hand-producing individual items to a new manufacturing paradigm involving the use of new tools and machines, harnessing the power of water and steam, and employing new iron and chemical manufacturing processes.Lasting from roughly 1760 to 1840, the Industrial Revolution has been credited as a major turning point in history ushering in a remarkable era of sustained growth and prosperity.At the turn of the 21st century, we could be on the cusp of a new manufacturing renaissance: D printing.This technological advance could prove to be another monumental paradigm shift, and has the potential to be extremely disruptive to our current industrial manufacturing complex and may revolutionize entire industries.The speed of its adoption and integration may be questioned, but it is hard to argue that 3D printing will not alter the current manufacturing landscape.In an ode to the late Dr. James Martin, let’s take a look into the future and see just what this revolution might have in store.What is Additive Manufacturing?Most things produced and manufactured today are done in a process not much different from how we built things in the Stone Age.Essentially we take a block of a substance and chip away at it, sculpting it into the physical shape and form we desire, wasting excess material in the process.This is called ‘subtractive manufacturing’. For the most part, we still mill, saw, grind and drill what we need from various materials.Additive manufacturing, on the other hand, doesn’t take something big and make it smaller.3D printers are machines that can actually print objects much like your inkjet printer creates a picture on a piece of paper, adding successive layers of plastic, metal, ceramics, glass, paper and even living cells in order to produce the object that is desired.Objects are formed one layer at a time, each layer on top of the previous one using lasers.The printing materials come in the form of powders, films, liquids and sheets.Advantages of Additive ManufacturingThere are a few major advantages to this process compared to traditional manufacturing.1) Little to no waste. Unlike subtractive manufacturing where materials are removed and you have “leftovers” that must be recycled or discarded, additive manufacturing efficiently only uses materials needed.2) Streamlined Process. Traditional manufacturing involves a complex process of research, development and investment. First a product is designed, and then building a manufacturing process and infrastructure needs to be built in order to produce the product en masse.It takes scale, investment and time and involves many more processes such as the procurement of various materials, welding or gluing various parts together in assembly and the creation of parts with casts or molds. 3D printing simply goes from the computer design file directly to production. Any changes can be immediately reflected in the design file and printed again to get the desired outcome.3) Complex Structure Production. 3D printing can produce structures that traditional manufacturing doesn’t. Since you are literally building the product from the ground up you can manipulate the internal dynamics of the product. An example is bioprinting an organ with a complex network of blood vessels.4) Customization. In addition to the streamlined process, each and every iteration of a product can be easily customized to order. An example of this is transplant organs. One major problem in transplanting organs is the rejection rate.By using one’s own cells to print body parts, transplant success could be dramatically increased. For the ladies, imagine printing that “perfect set of shoes”. Ones that fit perfectly, and look how you want them.Limitations of Additive ManufacturingThere are a few limitations currently with this technology. I suspect they will be overcome in time but for now there are a few.1) Slow Speed to Build. For many more standardized parts and processes, additive manufacturing is much slower that subtractive manufacturing and increases production times. Research done by the Frauhofer Institute for Laser Technology points to a potential fourfold increase in printing speeds for metal objects after certain advancements are made .2) Limited Object Size. We obviously can’t print a jumbo jet, yet. Some things will need to be made the old fashioned way by combining parts, but all the parts could be made by 3D printing.3) Limited Detail and Resolution. There are many parts that are still made crisper and their textures more appealing with die-cast manufacturing.4) Price. As with all new technologies and adoption, scale is needed to drive down cost and make the process more economical. As this form of manufacturing is further adopted and gains some economies of scale cost should come down to the point of being extremely competitive when compared to subtractive manufacturing.Low cost commercialization will arrive once patents expire and competition increases.The average industrial 3D printer now costs about $75,000 with some costing over $1 million.Retail 3D printer prices have declined from $30,000 a few years ago to about $1,000 for some models .Let’s run through some examples. Let’s say you were building a book shelve. eed nails? No problem print some. Lost your hammer? No problem print one. Screws? Print them. Plastic or metal shelves? Print them.All in the comfort of your own home. Want a different case for your iPhone print it. Need a guitar print it ( http://cubify.com/products/guitars/ ). Need a new heart? No problem. Fire up your bioprinter and print one (http://www.explainingthefuture.com/bioprinting.html ). In time, we may be witnessing the “democratization” of the manufacturing sector as individual consumers and entrepreneurs print what they want.This may all sound crazy and something from a science fiction novel but we are slowly moving in this direction. In fact 3D printing is increasingly being used by Fortune 500 companies and is intimately involved in commercial enterprises.Boeing now prints some 200 different parts for ten of its aircraft platforms .GE purchased a 3D manufacturing firm in order to print some of its aircraft parts as well. Some 40,000 acetabular hip cups (the socket for the hip joint replacements) have been built with 3D printing.Invisalign, a dental appliance maker, has produced 50,000 to 60,000 dental appliances using printers.Staples announced that it is offering a 3D printing service in the Netherlands and Belgium which allows customers to upload 3D designs and pick up their creations that have been manufactured at their local Staples store.Even NASA now uses 3D printing technology to build metal components for its rocket engines.Despite some early uptake by the manufacturing sector, it is likely that 3D printing will face the two main barriers to the adoption of any innovation or new technology: vested interests and regulation. As we just described there will be losers in this revolution. Similar to the difficulties seen in the music and entertainment industry, there is likely to be a lot of push back from companies that own intellectual property rights who do not want to see digital design files of their products floating around the web. In addition, the first ever gun was recently just produced by a 3D printer. The ease of printing almost anything poses some obvious moral questions which will need to be discussed and legislated as the technology advances.Disruption and InvestmentGiven this potentially huge shift in the fabrication process, some industries and countries are potential losers and winners.This technology is creating a new market that will disrupt and alter entire industries. According to a Wohlers report on additive manufacturing and the 3D printing industry, “sales of personal 3D printers grew 200% to 400% every year between 2007 and 2011” .According to NeoMam Studios, an infographic design agency, if 3D printing sales continue to grow like the personal computing industry in the 1970s and 1980s we could see a printer in nearly every home by 2040. McKinsey Global suggests that the potential economic impact across various applications could amount to $230 to $550 billion per year in 2025.If you believe in this revolution its best to avoid sectors and companies that could be hurt over the long-term.This would include subtractive manufacturing companies such as machine tool companies and plastic injection molding companies.Also, this technology has the ability to accelerate further just-in time inventory management as goods are printed as needed. Additive manufacturing eliminate costs and vendors associated with retail and wholesale distribution and shipping.Thus industrial warehousing companies and distribution industry participants could be negatively affected. It is also negative and disruptive to nations and countries that rely heavily on the machine tool industry.According to Gardner Publications, China is currently the largest country in terms of this production. Conversely, industries that involve rapid innovation and, high customization or high-value add will benefit immensely from 3D printing process. Advanced economies can produce more goods locally.Software designers and computer engineers will likely become even more valuable job positions. It is unlikely, however, to boost manufacturing jobs as this process is highly automated.There are currently three main publically traded additive manufacturing companies. ExOne Co. (Ticker: XONE) just went public on February 6th of this year and is already up over 130%. Stratasys (Ticker: SSYS) and 3D Systems Corp. (Ticker: DDD) are up over 170% and 360% respectively since the beginning of 2012.Obviously the potential of this technology has not been ignored by the market.This is an area to keep on your radar screen. It has the feel of a “New Industrial Revolution” in the making.Disclaimer: This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by Anchor Investment Management Ltd. to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy.