Charles R. Goulding and Preeti Sulibhavi examine what Poly Risks mean for the 3D printing industry.
When we say “Poly Risks” we are not talking about 3D printed polymer materials.
Poly Risks mean multifaceted overall risks and are a concern of Thomas Buberl, the CEO of AXA the global insurance company. Some of the Poly Risks that Buberl is concerned about include Cyber Risk, Geopolitical Risk, and Climate Risk. We have added Supply Chain Risk to the Poly Risk list.
Cyber Risk
Some of the 3D printing industry’s largest opportunities are with defense/aerospace products and MedTech devices.
Increasingly these business sectors need smart products with 3D printed embedded electronics where cyber security is paramount.
Manufacturers in the defense sector are subject to mandatory Department of Defense (DOD) compliance requirements.
Hospitals are no longer protected sanctuaries and have been subject to numerous hacks and ransomware extortions. New York State has announced US$500 million in grants to improve cyber security to help address the current crisis.
Geopolitical Risk
Global conflicts are the daily headline news stories. At AXA, Buberl steered the company to profitability despite taking a US$325 million charge related to the Ukraine war. Governments throughout the world including the US, Europe, and Asia are markedly increasing the defense portion of their national budgets. In previous periods of conventional warfare 3D printing was not a mature technology. Now 3D printing is being utilized in the defense sector to recover product design, improve product design, and accelerate volume production.
Climate Risk
Climate Risk is of deep concern and particularly for upcoming generations. The large Inflation Reduction Act (IRA) tax incentives and accompanying state incentives including grants and tax credits are transforming the US energy infrastructure. The new incentives are immediately transforming the US solar and geothermal markets. Numerous new US solar fans are presently being constructed and we are seeing a large increase in geothermal projects.
Supply Chain Risk
The Coronavirus demonstrated the fragility of US supply chains resulting in new and expanded diversified offshore supplier networks and increased onshoring. The Geopolitical and Climate Risks discussed above augment the need for ensuring more reliable critical product supply chains.
The Research & Development Tax Credit
The now permanent Research and Development (R&D) Tax Credit is available for companies developing new or improved products, processes and/or software.
3D printing can help boost a company’s R&D Tax Credits. Wages for technical employees creating, testing and revising 3D printed prototypes can be included as a percentage of eligible time spent for the R&D Tax Credit. Similarly, when used as a method of improving a process, time spent integrating 3D printing hardware and software counts as an eligible activity. Lastly, when used for modeling and preproduction, the costs of filaments consumed during the development process may also be recovered.
Whether it is used for creating and testing prototypes or for final production, 3D printing is a great indicator that R&D Credit eligible activities are taking place. Companies implementing this technology at any point should consider taking advantage of R&D Tax Credits.
Conclusion
The 3D printing industry will benefit from evaluating the Poly Risks. With cyber awareness, the 3D printing industry will create more secure and reliable products. Geopolitical and Climate Risks create business opportunities. Strong supply chains avoid business interruption.
