“Additive manufacturing” is the industrial version of what is referred to as “3D printing” at the personal or desktop level. It’s hitting the big time:
General Electric is making a radical departure from the way it has traditionally manufactured things. Its aviation division, the world’s largest supplier of jet engines, is preparing to produce a fuel nozzle for a new aircraft engine by printing the part with lasers rather than casting and welding the metal. The technique, known as additive manufacturing (because it builds an object by adding ultrathin layers of material one by one), could transform how GE designs and makes many of the complex parts that go into everything from gas turbines to ultrasound machines.
I don’t think that the adoption of additive manufacturing will do much for our employment situation (my main concern) but it will help our trade imbalance (a secondary concern) and that in turn may improve our employment situation at least a little.
This is what the Chinese really need to be concerned about: when intellectual property concerns, transportation costs, or just plain issues of control outweigh the very small benefits of China’s low wages for manufacturers. You can’t get any lower than zero and additive manufacturing is a big step in that direction.
Why should it help our trade balance, and why should the Chinese (or Indians) feel any concern? 3D printing has been around a few years now — pastry chefs were playing around with ten years ago; it’s not a military secret and the patents are available to anyone in the world. Granted, it may become a hugely important technology, like writing or electricity or road building, but in the nature of things, it’s available for anyone.
GDP = PCE + BI + G + (E – I)
Right now trade (E – I) is a drag on GDP because our imports are so high. If imports go down (as would be the case should we start manufacturing more of what we consume), that would be less the case.
The Chinese should be concerned because their main competitive advantage is low labor cost for manufacturing and there’s nothing lower than zero. Shipping costs become a greater issue and they are far from their main markets.
[shrug] I’ve been watching people complain about high US imports and the need to get our international trade “in balance” for 50 years now. And it never happens. At some point the realization sinks in that it just won’t happen, that other stuff is going on (foreigners buying US bonds, businesses repatriating overseas profits, trade in “invisibles”), etc.), and that a crude “imports = exports” trade balance probably isn’t possible without a massive disruption in US economic and social structure (i.e., a violently bloody revolution). We’re stuck where we are, in other words.
Elsewhere … China is ceasing to be a low-wage source of labor as its wealth increases, and is exporting production to Viet Nam and elsewhere as fast as it can. Basically it’s repeating US behavior in the 1980’s and 1990’s, looking to do in Africa what we did in China and SE Asia. Expect India to follow the same path as the 21st century wears on.
What’s going on, overall? On an individual basis, people in the USA and Europe are wealthier than others in the world, but population growth in the USA and EU is low or nonexistent and their economic growth rate is anemic. China and India are probably close to their 21st century population maxima , but will need higher growth rates for decades to come to get per capita incomes up to say 1/2 US levels. Trade with USA&EU isn’t going to provide that increased income; they’ll get it from internal growth, from trade with each other, and from trade with underdeveloped (but developing!) places in Africa, South America, etc.
A century from now, maybe India and China will be as economically stodgy (“solidly productive”) as say Europe is now, and world economic growth will be driven by modernization in Africa and central Asia. We shall see (well, our great grandkids will).
The point is, on a large enough scale, things like 3D manufacturing (and electrification, and canal dredging, and nanotechnology, and so on) are strands in the development of the world economy, but not the drivers. What the USA does with such “disruptive” technologies is only of local and transitory interest. [/shrug]