Seurat calls for AM incentives.
In a lengthy post Seurat CEO James DeMuth outlines reasons for the US government to develop new ways to incentivize the growth of additive manufacturing.
Seurat is a Massachusetts 3D print startup company that’s developing an unusual process they call “area printing”. The technology is quite scalable and should enable large-scale manufacturing of metal parts using an additive approach.
The metal 3D printing market seems to be doing quite well, so why would DeMuth be so concerned about progress? Why boost an industry that seems to be proceeding at a reasonable pace, aside from several spectacular over-investments in certain publicly traded AM companies?
DeMuth’s concern is China. He writes:
“The United States is on the verge of repeating a costly mistake that could jeopardize its position as a global leader in manufacturing. Just as it ceded dominance in solar panel manufacturing to China after developing the technology here, the U.S. now risks losing its competitive edge in the crucial field of Additive Manufacturing (AM) due to a lack of strategic action.”
In other words, DeMuth feels US progress in AM isn’t fast enough to keep ahead of China.
Why would China be faster in developing additive technologies? It’s all part of their long term strategy to modernize their economy. In the 1960s China was a largely agrarian society, and even prioritized manual labor. This was the Great Cultural Revolution, where mass upheaval of Chinese society took place. Millions of people were severely affected, with up to two million deaths.
This ended with the passing of Mao Tse-Tung, and his successors vowed to never let this happen again. Their strategy was to introduce elements of capitalism and generally modernize society. This included quite a number of tactics performed over very long time periods — decades — including subsidies and incentives.
The strategy worked, and China quickly grew into a modern industrialized society, more or less, with vast amounts of manufacturing activity. Initially that manufacturing leveraged the widespread availability of low-cost labor in the country, but more recently emphasis has been put into robotic solutions as labor costs rose.
Today that strategy is still in force, and the country is still working to modernize many aspects of Chinese society. An example would be the gradual replacement of coal-fired power plants with carbon-neutral equivalents. The country still produces the most CO2 from these plants, but has been increasingly replacing them.
Similarly, they boost various industry sectors through subsidies and similar mechanisms. One of them is additive manufacturing, and this is where DeMuth’s concerns are focused.
AM is being caught up in a vastly larger economic strategy by China, but it’s being caught nevertheless. AM activity in China is enormous, partly due to the subsidies, but also because there is a gigantic manufacturing sector to buy products.
This is evident in our weekly leaderboard of publicly traded 3D print companies. Recently we added the two largest AM companies in China, which we discovered were publicly traded on Chinese exchanges. The two companies, Farsoon and Bright Laser, were immediately placed at the top of the leaderboard due to their valuation. As of this writing their two valuations represent 42% of the total valuation of the leaderboard, with 17 other 3D print companies combining for the remaining 58%.
What should be done? DeMuth suggests the following:
- Tax Credits for companies that invest in developing AM technology or use additively manufactured parts
- R&D Grants for projects focused on advancing AM technologies, materials, and factories.
- Streamline the procurement and qualification processes for AM parts
- Fostering partnerships between industry, academia, and local governments
These seem to be quite reasonable tactics to compete with a country that is using an economic strategy to boost their internal industries.
DeMuth concludes with:
“The support of industry leaders, stakeholders, and policymakers is needed to secure America’s position as a leader in this transformative technology. Together, we can ensure that Additive Manufacturing does not become another example of how China swooped in and dominated a market while the USA stood idly by.”
Via Seurat
