3D Printing: Is it Disruptive Innovation

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 Executive Summary

The Theory of Disruptive innovation given by Clayton Christensen in his book “ The

Innovator’s Dilemma” has attracted huge attention from scholars as its main point is that entrant

organizations with the products having inferior performance have the capacity to displace even

the well established firms . According to Christensen (2000) disruptive innovations are smaller,

cheaper, more reliable, simpler as well as convenient as compared to the established or the

preceding products, while still being based on existing technologies. These features make us

consider the rapid proliferation of 3D printing in completely new way. This report provides a

deeper insight in the 3D printing technology in order to discover where its disruptive potential lie

does. The popular media and some scholars consider 3D printing as disruptive technology

although it has been there for quite sometime.

Keywords: disruptive innovation, 3D printing, Disruptive technology

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Table of Contents
Executive Summary.........................................................................................................................2
1. Introduction..................................................................................................................................4
2. 3D Printing is Disruptive Innovation.......................................................................................4
2.4 Disruptive Innovation............................................................................................................5
2.5 3D Printing Domains of Application.....................................................................................7
2.6 Current Scenario of 3D Printing............................................................................................8
3. Conclusion.................................................................................................................................10
4. Recommendations......................................................................................................................10
Bibliography..................................................................................................................................11
Appendix A: Self Assessment.......................................................................................................12
Appendix B: Statement of Acknowledgement..............................................................................13
Appendix C: Peer Contribution Declaration..................................................................................14

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1. Introduction

The original theory given by Christensen (1997) focussed on disruptive technologies and over a

period of time this same theory is being used for providing explanations for various kinds of

disruptive innovations. Disruptive Innovation is the term which has been coined by Clayton

Christensen and it basically explains about a service or a product taking root initially in just

simple applications that too at the bottom of the market and then it persistently moves up in the

market , thus finally displacing all the established competitors (Christensen, 2017). But

according to Markides (2006) this is not true as different kinds of innovations have different

competitive impacts as well as they give rise to different kinds of markets. Thus there are two

specific kinds of disruptive innovations: business-model innovations and radical (new-to-the-

world) product innovations. It is argued that although they share several similarities to the

disruptive innovations theory suggested by Christensen , yet they are different phenomenon

which result in creating different markets , while posing various kinds of challenges for well

established organizations and thus having different implications for the managers. However

business-model innovation is found to be disruptive for the established competitors and Markides

called it as ‘strategic innovation’ (Markides, 2006).

This report will analyse the concept of disruptive innovation as given by Markides and

Christensen and correlate it with 3D Printing, trying to analysing whether it is disruptive

innovation or not.

2. 3D Printing is Disruptive Innovation

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3D printing or Additive Manufacturing (AM) is considered to be manufacturing technology

which has received huge amount of media visibility in past few years. 3D printing has proven

that it has the potential for revolutionising the entire manufacturing process along with lowering

the costs, risks of production, as well as the time frame. It also provides the manufacturers with

new handlers for selecting suppliers. Manufacturers have been using 3D printing in prototyping

as well as for production systems. Several high tech industries like computers, electronics,

Aerospace and architecture have adapted to 3D printing in order to derive various advantages

(Subramaniam, 2015). There are several efforts being made so as to make available 3D printing

available to a wider section of users that too at affordable rates. Thus considering the recent rapid

technological developments in the field of 3D printing along with its adoption, it can transform

industrial scenario across the world.

Some of the physical applications of 3D printing are very striking as it ranges form making

titanium jaw bones, printing chocolates to Rolls Royce jet engine parts and outlandish paper

layered 3D rings. This technology is sometimes also called as third industrial revolution (The

Economist, 2016) . It is also referred to as the technology which will bring major change in the

world (D’Aveni, 2013) . All these descriptions are very modest though and the rise of 3D

printing to limelight is also considered to be just hype or a bubble (Gartner 2013c). It has also

been referred to as disruptive technology by some of the industry experts as well as sources and

that is why this report tries to investigate whether it is really a disruptive technology or not?

2.4 Disruptive Innovation

Disruptive innovation is one phenomenon where the entrant company is capable of displacing

the incumbent one with a seemingly inferior product (Schmidt & Druehl, 2008) . On the other

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hand Gilbert (2003) states that disruption has been and it will continue to be an immense source

of growth for the economy, thus he considers the theory of disruptive innovations to be one of

the most influential theories (Gilbert, 2005). Disruptiveness can just be expressed in relation to a

business model of any company as well as its competitors (Christensen & Raynor, 2003) , thus

creating relativeness is the main essence of disruptive innovation.

Disruption being a relative phenomenon which means there should be an established product

which can be disrupted , however there is recently expiry few patents along with which there

has been birth of an open source 3D printer project and this has given rise to a class of much

lower priced , and consumer grade 3D printers. This supports the characteristics of typical

disruptive innovation given by Christensen (2000), but the notion of 3D printers as potential

disruptive technology has not been studied in detail and therefore there is scattered knowledge

which is available on the topic (Yu & Hang, 2009) .

The original theory of disruptive innovation derived by Christensen (2000) from the historical

data mainly collected from computer disk drive sector as well as many other products and

services for example accounting programs , desktop computers, steel minim ills, hydraulic

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excavators, small Honda motorcycles , minicomputers, and inkjet printers. But he found that the

disruptive technologies were mostly found in B2B along with in B2C markets as well. It has

been argued that most of the disruptive innovations have initiated the most profitable trajectories

in the world history (Christensen & Raynor, 2003) . Disruptive innovations are separated from

other innovations as they are strategically different innovations (Govindarajan & Kopalle, 2006)

2.5 3D Printing Domains of Application

There are several sectors in which 3D printing have been used which include mechanical

designing, architecture, retailing, entertainment, healthcare and many more to go. Rather it can

be said the 3D printing is coming of age as a manufacturing technique. According to the figures

presented by Tim Caffery , Wohlers Associate , a well-known American Consultancy, that keeps

a track of additive manufacturing there are more than 60 million custom-shaped hearing-aid

shells as well as ear moulds that have been made since 2000 using 3D printers. There are

hundreds of thousands of people who have been fitted with 3D printed various kinds of

orthopaedic implants ranging from titanium jawbones to hip replacements joints and various

kinds of prosthetics. This indicates that the healthcare industry has very swiftly adopted additive

manufacturing. Since people come in various shapes and size, the 3D printer is the only one that

is capable of offering customised production (The Economist, 2016).

As compared to $70 billion machine tool market, additive manufacturing is very small one but it

is still expanding at very fast rate and not just in one sector. According to Wohler’s 3D printed

products as well as services have grown by 26 percent in last year and are worth $5.2 billion.

According to McKinsey, a management consultancy in terms of making better products, offering

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lower price as well as improved health, 3D printing can cast huge and effective impact of around

$550 billion per year by 2025. 3D printed objects are increasingly being produced as finished

objects instead of just being prototypes or models. Therefore in a report by PWC additive

manufacturing is going to cross a period of just being a hype as well as experimentation and will

enter a period of rapid maturation. In their research they found that almost two-third of American

manufacturers currently use 3D printing in some form or other (The Economist, 2016).

2.6 Current Scenario of 3D Printing

Personal 3D printers can be called as a disruptive innovation as according to Markides’ ( 2006)

concept of new-to-the-world innovations , 3D printing or technologies or additive

manufacturing fit in this category of new to the world as they do not have any clear cut

predecessor (Markides, 2006) . Thinking of early 3D printing technology in late 1980s which

gives a challenge to both modular as well as architectural dimensions , makes them a radically

disruptive innovation in Carayannopoulos (2009) model. Even Carayannopoulos (2013) has

confirmed that 3D printing can be classified as being disruptive from the perspective of

manufacturing industry (Carayannopoulos, 2009). However in contrast to it personal 3D printers

are just novel forms of architecture or the design configurations that are created on the basis of

existing technology (Sood & Tellis, 2011) .

Most of the affluent organizations like NASA, Ford Motor Company and GE have used 3D

printers for various purposes and Ford Motor Company thinks that 3D printers are good for their

engineers as they can use them in early concept designing. Price trajectories can also be used

for interpreting disruptive innovations by making use of the concepts like performance overlap

as well as preference asymmetry (Adner, 2002) . The gap on the basis of price between the

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lowest priced industrial printers and the personal printers is very large. Therefore because of

higher purchasing cost as well as maintenance costs, these industrial printers are out of reach of

customers. This suggests higher preference asymmetry within the 3D printers market. On one

hand personal printers can be attractive for some consumers or professional users, industrial

printers are attractive just for the professionals. Pricing plays major role in driving disruption and

in this case the player is found to be attractive for both the segments. Thus both the concepts

support personal 3D printer’s disruptive characteristics.

Considering the market share also in 2007 5004 which included 66 personal and 4938

industrial 3D printers as well as AM systems were being sold across the world . For 2014, the

sales rose and more than 98,000 units including 87,000 personal and 11,000 industrial 3D

printers were being sold. Thus the market share of personal printers has grown declining the

share of industrial ones although the industrial printers have also shown a rise. Thus the personal

3D printers are found to match the general criterion which has been set for disruptive innovation.

But on the other hand its very lower unit price as well as small sizes of entrants with the ability

to survive on lower margins indicates a low-end disruption. Thus personal 3D printers can be

classified as hybrid of these approached however inclining more towards the new-market

disruption. This indicates the reason why they did not start running away from upmarket , while

the low end disruptions motivate them to fee away from the attack , on the other hand the new

market disruptions induce the incumbents to just ignore the attackers . There is one more and

clear cut signal of new market disruption in case of 3D printing which is high as well as

increasing rate of growth in new as well as emerging markets. Thus very high rate of growth in

the new markets or in new context is also a signal of disruptive innovation. Thus 3D printing can

be placed on a continuum lying between new –market and low-end disruptions (Deliotte, 2010).

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3. Conclusion
After studying the proliferation of personal printers in-depth it is considered that 3D printing is

disruptive innovation. After analysing the factors causing its advent, differences between

personal printers and entry-level industrial printers , prices market shares etc. as per

Christensen’s views the 3D printing performance and features meet the general criterion for

new markets disruptive innovation, however their proliferation has happened in such a manner

that it doesn’t have immediate results for any individual organization, all though the entire 3D

printer market has been disrupted by the new entrants as well as new products

4. Recommendations
In future this indicates that 3D printing will be finding wider range of applications which will

extend from healthcare to construction as well as beyond. Thus to benefit from various

applications as well as opportunities arising from 3D printing it should move forward , the

organizations should virtually be much faster , capable as well as flexible so that they can very

well understand the implications of 3D printing on the nature of their business. If they fail to do

so, they will be losing market share because of higher competition from various new

organizations that are responsible for creating market changing and disruptive innovations. As

more and more individual consumers are capable of engineering as well as producing their own

goods along with that 3D printing is becoming much more efficient as well as cost effective in

producing goods, there will be many more opportunities for individuals to create innovations ,

generate new sources of wealth , disrupt innovations .

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Bibliography
Adner, R., 2002. When Are Technologies Disruptive? A Demand-Based View of the Emergence
of Competition. Strategic Management Journal, , 23, pp.667-88.

Carayannopoulos, S., 2009. How Technology-Based New Firms Leverage Newness and
Smallness to Commercialize Disruptive Technologies. Entrepreneurship Theory and Practice,
pp.419-38.

Christensen, C., 2017. Disruptive Innovation. [Online] Available at:

Christensen, C.M. & Raynor, M.E., 2003. “Innovator’s Solution: creating and sustaining
successful growth. Boston, Massachusetts: Harvard Business School Press.

D’Aveni, R., 2013. 3-D Printing Will Change the World. [Online] Available at:
http://hbr.org/2013/03/3-dprinting-will-change-the-world/ [Accessed 11 Feb 2017].

Deliotte, 2010. Disruptive manufacturing The effects of 3D printing. [Online] Available at:
https://www2.deloitte.com/content/dam/Deloitte/ca/Documents/insights-and-issues/ca-en-
insights-issues-disruptive-manufacturing.pdf [Accessed Feb 2017].

Gilbert, C.G., 2005. Unbundling The Structure of Inertia: Resource versus Routine Rogodity.
Academy of Management Journal, 48(5), pp.741-63.

Govindarajan, V. & Kopalle, P.K., 2006. ”The Usefulness of Measuring Disruptiveness of

Markides, C., 2006. Disruptive Innovation: In Need of Better Theory. J PROD INNOV MANAG ,
23, pp.19-25.

Schmidt, G.M. & Druehl, C.T., 2008. When Is a Disruptive Innovation Disruptive? The Journal
of Product Innovation Management, 25, pp.347-69.

Sood, A. & Tellis, G.E., 2011. Demystifying Disruption: A New Model for Understanding and
Predicting Disruptive Technologies. Marketing Science, 30(2), pp.339-54.

Subramaniam, C., 2015. 3D Printing – the Most Disruptive Innovation of 21st Century. Research
GAte.

The Economist, 2016. A Printed Smile. The Economist, 30 April.

Yu, D. & Hang, C.C., 2009. A Reflective Review of Disruptive Innovation Theory. International
Journal of Management Reviews, 12, pp.435-52.

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Appendix A: Self Assessment

First before commencing this report I called for a meeting with my group members and then we

created a timeline and divided the entire task into subtasks. Then as per everyone’s choice I

allocated the portions of the report to every team member within allocated time of 4 days and

after that another meeting was scheduled to combine and collate the entire information and data.

Then I took the task of arranging the report in proper format as per the given instructions. In

between one of my teammates faced problem in finding relevant information about disruptive

technology, then I helped in searching relevant journal articles mainly of Markides on Google

using proper keywords. I think that my group had an excellent time management skills and we

completed the report on time by following proper planning, data collection and then arranging

information as per desired format. However once we got stuck as well when I could not find the

article of The Economist, but one of my teammates helped me in searching for the full article.

One very good and new skill that I learnt was searching for accurate and authentic information

on Google using proper keywords. Another thing which added to my talent is that I learnt how to

compile vast pool of information into a relevant report format. The entire process of completing

this task has been very beneficial for me as my time management, cooperation and team work

skills along with data collection skills have sharpened. Thus in near future if I have to undertake

any such group assignment I think I would be better at collecting relevant and accurate

information within short period of time, compiling the data into relevant short information would

be much easier for me and lastly I would be able to work well with the entire team.

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Appendix B: Statement of Acknowledgement

This project started as a group report on Innovation Management for Heriot Watt University.

Along with my lecturers and professors for providing me insights , I would like to express my

deepest gratitude towards my group members as they have made valuable contribution in

making this report. Everyone took out time from their busy schedules to complete this report and

everyone’s contribution has made this entire report worthwhile.

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Appendix C: Peer Contribution Declaration

Team Member’s Names Level of Contribution (%) Signed

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