BookWatch: We’re on the cusp of the third digital revolution, and here’s how not to be left behind


Over the past 50 years, two digital revolutions — in communication and computation — have created unprecedented wealth and transformed how we live, learn, work and play. We are now on the cusp of third digital revolution — in fabrication — that will be equally transformative of markets and society.

A half-century ago it wasn’t obvious that computation capability would progress from fitting in buildings to fitting in rooms to fitting on desks to fitting in pockets and finally to embedding in infrastructure.

The third digital revolution is on a similar trajectory, progressing from room-filling machines to desktop personal fabrication to ubiquitous programmable materials. We are entering a phase analogous to the shift from minicomputers to personal computers — a point at which people who didn’t see the change coming were left in the dust.

So how can investors, entrepreneurs, policy makers, educators and social entrepreneurs avoid being in the dust this time? Here are four observations:

It’s not just 3-D printing
Frosti Gíslason/Saethor Vido

A fab lab

When most people hear “digital fabrication,” they think 3-D printing. While 3-D printers are part of a fab lab, the hype around this additive manufacturing technology misses the wide range of digital fabrication technologies in the short term as well as the longer-term impact of discrete “digital” materials.

With a 3-D printer, you can build a model of a drone, and maybe some of its parts; in a fab lab you can build the whole drone, fabricating both form and function. This is because a fab lab has a mix of digital fabrication equipment that is additive, such as a 3-D printer, and subtractive, such as a laser cutter or a 3-D milling machine, as well equipment to embed programmable computer chips. This equipment is comparable to what is used in rapid prototyping facilities in industry, only it is located in schools, libraries, universities, museums and other community settings.

Throughout the world, people are making everything from food, furniture and crafts to computers, houses and cars across a global network of more than 1,000 community fab labs. The designs are sourced globally, while the fabrication is done locally. And this is the tip of a much bigger story leading from fab labs today, to fab labs being able to make fab labs in the near future, up to a Star Trek–style replicator that can make (almost) anything, including itself. It will do this by digitizing not just the designs of things but also the construction of the materials that they’re made of.

For investors interested in pioneering the third digital revolution, it is essential to understand the full range of digital fabrication capabilities in the short run and the technology road map in the long run.

Value will accrue to organizations that can create better, faster, cheaper additive and subtractive hardware as well as more intuitive CAD (computer-aided-design) and CAM (computer-aided-manufacturing) software and environmentally-friendly, reusable and cost-effective raw materials. Value will also be created by developers of platforms and tools that are interoperable and that can be locally adapted and extended — so they can propagate across the global fab network.

Companies making digital fabrication machines include those that initially sold to industry and are now expanding to smaller workgroups and individuals as well as newer entrants that have always targeted the personal market. Among makers of 3-D printers, the first category includes Stratasys SSYS, -2.41%   and 3D Systems DDD, -3.48% while the second includes Formlabs and Sindoh 029530, -0.82% Manufacturers of subtractive milling machines include ShopBot and Roland DG 6789, -0.70% as well as Shaper Tools and Bantam Tools. Among those making laser cutters, one of the most popular tools in a fab lab, are Epilog Laser and Universal Laser Systems in the first camp, and Full Spectrum and Glowforge in the latter camp. CAD and CAM companies range from the more established DS/SolidWorks and Autodesk ADSK, -0.27% to smaller cloud offerings such as Onshape and open-source projects such as FreeCAD.

Today’s killer app is the process

While fab labs provide rapid prototyping capabilities for individuals, small and even big businesses, one of the most interesting business models doesn’t involve selling things that are made in the lab, but rather selling the benefits of making them.

Designing and making things in a fab lab cultivates essential dispositions, such as creativity, collaboration, critical thinking, systems thinking, design thinking, problem-solving, and resiliency. It also builds literacy and skills in the workflows associated with computer-aided design, computer-aided manufacturing, and material science.

Companies such as Chevron CVX, +1.93%   and Fiat-Chrysler FCAU, -4.21%   are investing in fab labs in communities where they operate, both as philanthropic community outreach and to provide settings where their own employees can benefit from the collaborative design culture in a fab lab.

As a result, there is a strong and growing demand for fab labs from schools (K-12 through universities), community centers, libraries and other public-facing institutions focused on preparing people to thrive in the 21st century.

In addition to better, faster and cheaper hardware and more intuitive software, investors should also look at opportunities that reduce friction in the process of setting up and effectively running a fab lab — including programs that engage and empower youth, provide retraining for adults in job transition, and other process-oriented benefits.

When it comes to fab services, there are opportunities for both new companies (and nonprofits) as well as expansion opportunities for organizations that already provide relevant services. For example, a company that provides technology infrastructure and support to schools and libraries could expand their offerings to include the set-up and maintenance of fab labs. A company that currently provides skills development and employment retraining could design fab-based retraining programs.

Manufacturing for a market of one

The accelerating gains in performance of the software, hardware, and materials in a fab lab will make it possible for individuals to create and adapt designs to meet their personal needs – making products for a market of one. The unseen competitor for many traditional manufacturing businesses will be their own customers.

With computers and communications, there were a few early killer apps (email, spreadsheets, word processing) that evolved into vast ecosystems of applications, allowing for a high degree of personalization. With digital fabrication, the longer-term trajectory will go beyond the benefits of the fabrication process to feature personalized production of products that exceed what can be supplied by traditional markets.

Here the business opportunity centers on those companies that develop the platforms and services that enable individuals and communities to increasingly make what they consume – using local materials to solve local challenges. Global companies such as IKEA, Nike NKE, +2.22% and Philips PHG, +0.61% PHIA, +0.27%  are collaborating with the fab lab network to explore the implications and integration of local production.

A sweet spot for social-impact investing

Digital fabrication represents a great opportunity for the growing multi-billion-dollar social-impact investment segment, including angel, venture, private-equity and a variety of public-private partnerships. Today, investments in services supporting fab labs — providing fab access and literacy — is an opportunity for a blend of social impact and competitive market returns.

In the long run, investments in the digital fabrication technology itself has the potential to produce more self-sufficient and generative societies. Legislation is being introduced in Congress to recognize universal access to digital fabrication as a public-private partnership in the national interest.

The best way to assess the short-term and long-term opportunities, including the potential for impact investments, is to visit one of the growing global network of community fab labs in over 120 countries. This will be equivalent to seeing a floor-to-ceiling minicomputer rack in the 1970s, just before the shift to personal computers. Bring your imagination for the market opportunities and the social impact potential as this technology continues its exponential growth in capability and reach. Imagine leading the way, rather than being left in the dust.

Alan Gershenfeld is president of E-Line Media. Joel Cutcher-Gershenfeld is a professor of social policy and management at Brandeis University. Neil Gershenfeld is director of the Center for Bits and Atoms at MIT. They are co-authors of “Designing Reality: How to Survive and Thrive in the Third Digital Revolution.”