In the popular television series Star Trek, a Replicator is used to produce virtually any item the crew might need out of pure energy: be it food, Earl Grey tea, medicine or spare parts. When resupplying ships in far-away galaxies is not an option, Replicators can solve a number of supply-side constraints, replacing cross-galactic trade in goods.
Modern 3D printers are arguably early beta versions of Star Trek’s Replicators. They enable the production of an array of goods, ranging from plastic, ceramic to metal materials, based on instructions coded in a digital design file. Given the similarities, some might be wondering whether 3D printing has the potential to replace international trade in goods. After all, why would firms choose potentially high transport and tariff costs – and the risk of supply chain disruptions – when they could simply send design files across borders for local production?
This question is on the minds of trade policymakers for a number of reasons, not least of which, particularly for many developing countries, is the potential loss of import duties (i.e. tariffs) which can constitute an important source of government revenue. If 3D printing puts an end to – or a severe dent in – the international trade in goods, then the technology might affect their capacity to collect fiscal revenue.
How much of this is science and how much is fiction?
Answering this question requires thinking more carefully about the differences between 3D printers and the Replicators rather than focusing on their similarities. Unlike the fictional Replicators, 3D printers do not produce items instantly. They take time to print and require careful upfront calibration and post-production steps, including sanding, priming, painting and gluing (figure below). Unlike the pure energy inputs used by Replicators, 3D printers additionally require physical materials and cannot ‘print’ just any type of product, but are limited by both material inputs and size.
There are different cost advantages to the use of 3D printing technologies relative to traditional manufacturing. For instance, injection-moulding techniques tend to be characterized by economies of scale, that is, the cost of each unit decreases as the number of units produced grows. By contrast, unit costs for 3D printing remain relatively constant (‘Additive manufacturing’ in figure below). This means that depending on the number of units produced, one technology has a cost advantage over another (the fictional Replicators are likely to have an even lower and also flat unit cost curve, exhibiting an absolute cost advantage relative to any other technology).
Putting Replicators aside, a review of the engineering literature suggests that while a growing range of goods can be produced using 3D printing, the technology currently has a clear cost advantage when it comes to the production, on a small scale, of materially simple and geometrically complex items. Importantly, with high maintenance and personnel costs, keeping 3D printers in several different locations can be costly. This implies that trading files instead of goods is not necessarily the least expensive option for firms, even in the presence of tariffs and transport costs.
What evidence of the impact of 3D printing on physical trade?
When looking at goods that have been produced using 3D printing – such as orthopaedic appliances (e.g. dental implants, hearing aids), aircraft parts, medications, and some machine parts –– it appears that international trade in those products has grown at a similar, if not faster, pace than total trade over the past two decades (figure below). For instance, trade in orthopaedic appliances – which have experienced greater production through 3D printing technology – has grown almost twice as fast as total trade since 2007. This means that there are only few signs that 3D printing is replacing trade. On the contrary, the evidence to date suggests that it might actually complement trade in goods.
In our latest OECD report, we study the links between countries’ imports of 3D printers and their trade in 3D printable goods, taking into account additional factors that may influence international trade in those products, such as gross domestic product (GDP) per capita, research and development (R&D) expenditure, foreign direct investment (FDI) inflows and openness to trade. We find that the adoption of 3D printing technologies, proxied by measures of imports of 3D printers, is complementary to goods trade during the decade that witnessed greater adoption of 3D printing (2010-2018). The lack of an impact prior to widespread deployment (figure below bars  (empty) and ), as well as the use of a range of robustness checks and placebo tests, lend credibility to our estimations.
On average, a 1 per cent increase in imports of 3D printers is associated with a 0.022 per cent rise in the value of exports of 3D printable products (bar ). While this coefficient may look small, evaluated at the mean, it suggests that a USD 14 000 increase in imports of 3D printers is associated with a USD 3.3 million growth in the aggregate value of exports of 3D printable goods (figure below, bar ). When looking at differences between lower and higher technology goods, the impact appears to be stronger for more complex items, such as orthopaedic appliances, aircraft and machine parts and medicines – while it is relatively weaker for lower technology items, such as candles, hand tools or knives (bars  and ).
These results are significant for developing countries, especially for exports of higher technology items. This means that imports of 3D printers may play a role in helping build the competitiveness of domestic firms and consequently the wider export competitiveness of products that can be 3D printed.1
While it remains important to monitor the longer-term implications of 3D printing for international trade in goods, available evidence suggests that the technology remains a far cry from Star Trek Replicators. In the here and now, rather than substituting trade, 3D printing seems to be contributing to increased trade in goods.
The findings of this report are important for ongoing discussions on the WTO moratorium on customs duties on electronic transmissions. In fact, the evidence suggests that, to date, there appears to be no trade-off between 3D printing – and the associated electronic transmissions – and regular trade in goods, meaning that there are no compelling reasons to be concerned about tariff revenue losses as a result of wider adoption of 3D printing technology.
The technology also appears to hold benefits in the form of greater trade in goods that can be 3D printed, including higher technology exports from developing countries (e.g. orthopaedic appliances, aircraft parts, medicines). The technology might also bring benefits to consumers who will be able to avail themselves of a larger variety of more competitively priced goods, and generate benefits in the form of lower obstacles to entrepreneurship.
Overall, this means that, when considering the impact of 3D printing on international trade in goods, separating the science from the fiction is important, particularly if we are all to live long and prosper!
The opinions expressed and arguments employed are those of the authors and do not represent the official views of the OECD or of its member countries.
Disclaimer: The views expressed in this article are those of the authors based on their experience and on prior research and do not necessarily reflect the views of UNIDO (read more).