Ponoko and the HBR’s Breakthrough Idea of 2007

Smart Economy: Nanotech could create a new Robinson Crusoe Economy 07-047

What does nanotechnology mean to you as a consumer? Perhaps you first think of smart appliances or cool gadgets that make life easier. But did you ever think it could bring about a complete change on how we buy and make things, and so soon? Did you ever think that you would no longer just be the consumer, but also a producer?
Walter Derko of Smart Economy blog talks about the social impacts of nanotechnology, as brought to light from the Harvard Business Review’s list of Breakthrough Ideas for 2007. In particular, he wonders how people and businesses will adapt and cope with “desktop nanomanufacturing”. We feel designers, creatives and forward-thinkers who want to become involved with Ponoko will be at the forefront of embracing, if not leading this change.
From the Harvard Business Review:

The scientific and technological revolution that may occur as a result of nanotechnology has been much discussed. Generally unappreciated so far, but of potentially much greater impact, are the sociocultural and business implications. Nanotechnology may change society over the next few decades just as much as information technology has over the previous few — and in ways that are still hard for our minds to grasp.

Nanotechnology is distinguished from other forms of technology, past and present, by the infinitesimal size of the materials involved (less than 100 nanometers wide) and by its method of operation. Conventional manufacturing carves or distills a purpose-suited device from a mass of raw materials. Nanotechnology, like nature, assembles objects atom by atom, following a design that calls for only what is needed: a place for every atom and every atom in its place. This method of constructing objects (which themselves do not have to be small) will reshape the future not only of manufacturing but also of distribution, retailing, and the environment.

Because conventional manufacturing begins with large and unformed inputs, it needs scale, and economies of scale push factories to become larger and more centralized. If, however, manufacturing is “additive” (assembling products atom by atom) rather than “subtractive” (distilling them from a mass of materials), factories can be quite small — small enough to be no more than a set of tiny machines and production blueprints — and can be operated almost anywhere. The marginal production costs of these factories should approach zero, and their production processes should create no pollution or waste.

These developments also challenge accepted notions of the economic place of durables — products with a shelf life independent of their utilization. At present, much economic activity amounts to providing “permanent” solutions to ephemeral problems. Thus, the plastic cover placed on a Starbucks cup solely to prevent the purchaser from spilling the scalding contents is of no use whatsoever to a stationary consumer once the brew cools off. Thanks to nanotechnology, however, many products would endure no longer than the need that gave rise to them.

Industrial or business-to-business markets are likely to embrace this technology first, given their quest to reduce costs throughout the value chain, which they could accomplish by eliminating several of its links. Already what are called synthesizers, assemblers, or automated fabricators have been developed to create items, such as prosthetics, using nanotechnology’s additive approach. In the next few decades, we may see the domestic, user-friendly successors to these machines — ”personal manufacturing” units, or PMU — become standard home appliances.

Consider this scenario: In preparing for a dinner party the following day, a couple decides to create a new set of dishes. They sit down at the console of the family PMU (essentially a keyboard, a display screen, and a manufacturing chamber containing the atoms to be assembled). Working with design software (the manufacturing blueprints), they input the instructions and watch as the atoms in the chamber are organized into plates, bowls, and cups. Since the number of atoms used to manufacture the dishes is the same as the number composing them, all the costly steps: extraction or collection of raw materials, transportation, transformation, waste disposal, that currently precede a product’s use or consumption are eliminated.

Ever since Adam Smith laid out their essential characteristics, market economies have been understood to rest on specialization: Individuals are producers of one thing and consumers of everything else. In what is sometimes called the nanocosm, by contrast, consumers could become the sole producers of finished products of all kinds. Consequently, they would continually evaluate whether to make or buy. We are all aware of the decentralizing and personally empowering effects of PCs and the Internet. By making individuals largely self-sufficient, the nanocosm would push these effects to the extreme, in essence creating a Robinson Crusoe economy.

Nanotechnology would thus hasten the trend away from manufacturing prowess and physical assets (hardware) as sources of competitive advantage. Obviously, the vast number of companies that offer durable or even disposable items would be at risk — as, ultimately, would those handling inventory and logistics or offering after-sale customer service, maintenance, and repair. In short, the ability of end users to perform for themselves functions now performed by other economic agents would wipe out large segments of the value chain.

Competitive advantage would lie in knowing the customer and designing the manufacturing blueprint and software. We might also anticipate the emergence of a new entity, midway between the traditional make-and-sell, command-and-control organization and the more modern sense-and-respond, adaptive organization. This new entity would function as a systems integrator, focusing on “menu design”, component acquisition and assembly, and efficient coordination of the activities and interactions of the market-savvy designer, the PMU maker, the PMU operator, and the provider of the atomic building blocks.

I want to point out here the “emergence of a new entity”, which brings together the creatives and makers, both of whom can also be the consumer – this is exactly what Ponoko is all about. We really believe that the future is one that can be sustainable and creative. In many ways it’s a return to life in the past when goods were produced locally by local artisans, but within the digital age it takes away many of the barriers that were inherent within that model. The need for specialized tools and knowledge in many ways are removed by the use of high technology and distributed creativity. While the distributed manufacturing model means you aren’t tied to just selling locally, you also don’t need economies of scale or luxury goods-level pricing to make and sell your goods.

I was a big fan of the Robinson Crusoe story as a kid, but honestly I don’t think it’s the perfect analogy in this case. I think that we are looking at a really new paradigm here. The future stories of how we live will be even more exciting.

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Will Ware

I participated in a discussion (http://www.foresight.org/nanodot/?p=250) about 3d printers some time back on Nanodot, a Slashdot-clone website for nanotechnology news items and commentary. I am an admirer of 3D printer projects like Fab@Home and RepRap, and Gershenfeld’s thing of putting fab labs in the developing world. I hope all these things really take off, and I hope they continue to improve.

Regarding quantitative economic analysis, afaik nobody is thinking much about it. The price of goods falls, what does that do to the price of land, the price of insurance and legal and medical services, the price of skilled and unskilled labor? We tend to believe (as do I) that everybody will be better off in the long-term steady state, but who wins and loses while the short-term transients are sorting themselves out? I don’t think anybody knows, and somebody should at least run some simulations.

It’s very blue sky at the moment on what the implications could be for the short term economic effect. I also haven’t yet discovered anyone who is doing simulations. But I think that is a reflection of truly how bizarre the technology still seems for most people, there is a real air of science fiction around it to consider that everyone could be printing products at home. Most people think it’s a phenomenon that is 100 years away from widespread adoption, not five.

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