How 3D printing impacts global trade

Researchers believe 3D printing has expanded global trade, contrary to conventional wisdom, which held that the ability to enable local production would reduce it.

A paper, coauthored by Caroline Freund, economist and dean of the school of global policy and strategy at the University of California, San Diego in conjunction with the World Bank, found that 3D printing changed production processes, but left supply chains intact. 

The research, published in the Journal of International Economics, looked at the production of hearing aids, which are commonly produced using 3D printing. Rather than shrinking global trade, the shift to 3D printing actually doubled or nearly doubled producers' exports after five years. 

Freund and her co-authors found similar patterns when they examined 35 other products, including running shoes, aircraft parts and prosthetic limbs. “The technology is a boon, not a curse to trade,” Freund said. “A country’s exports of hearing aids increased more than trade in other similar goods following the adoption of 3D printing by manufacturers there. The new production technology in combination with trade means that consumers around the world suffering hearing loss are benefitting from better and often cheaper hearing aids.” 

One reason behind the expansion is that printing hearing aids in high volumes requires a large investment in technology and machinery. The countries that were early innovators—Denmark, Switzerland and Singapore—dominate exports of the good, while middle-income economies such as China, Mexico and Vietnam also have been able to substantially increase their market shares.

In addition, hearing aids are lightweight products, which makes them fairly cheap to ship internationally. The same is true for the other products the authors examined—lighter products are associated with more trade growth.

“Policymakers often view 3D printing as a means to shorten supply chains when in fact it is more likely to enhance trade and reshape supply chains,” said Freund, former global director of Trade, Investment and Competitiveness at the World Bank.

This pattern could change in future if 3D-printing becomes more accessible to local producers.

---