lambert: (off-mike) for coming. this is avery timely and interesting topic. we have a great panel. i just wanted to remind everyonethat this is on-the-record, which is a little different for the council events, so as longas you all understand that, that whatever you say will be on-the-record. i won't do much of the introductions becauseyou have them in front of you. i would just say a few things. you know, brad, coming fromlockheed martin, one of our heritage defense companies very important to us, and focusingon this issue is very important, started his career at ge astro, which was one of the firsttransactions i actually was engaged in there, and then moved from the engineering worldto the business development world, will give
us a really good, i think, perspective ofthis new and evolving technology from a large corporation point of view. and then we have cliff, who has written someseminal articles about manufacturing innovation and what it means for both national security-- he's also written several interesting articles -- if you care to look at them, i would adviseyou to -- about chinese innovation in manufacturing technology, as well. and so he'll give usa very good, i think, overview of the international dimension of this particular area, 3-d printing. and then we have hugh, who's in a new role.he has just joined 3d systems and came from 20-some years at t. rowe price, where youinvested in companies. so you obviously -- it
took you 20 years to find one you wanted togo to work for, now is in the role as vice president for corporate development and venturesat 3d systems. and 3d systems is the printer that you see out there. that's the one i boughtfor my children last year for christmas. they think santa claus bought it, so don't letthem know, but we spent yesterday or our snow day designing the ring that is being printedright now that i will have to take home to them. and 3d systems is one of those great americansuccess stories that we'll get into in a little bit here, but the ceo was just named, i think,the forbes top 50 people to examine as they grow, and i think the company itself is now,according to forbes, ranked number two in
technology and number five in overall of the100 global fortune magazine's fastest growing companies. long heritage company, but somethingthat we, at least in my role in the department, we looked at this technology and these companiesvery, very closely. again, there's a 3-d printer out there. youcan see some of the things we're doing with it. but i just -- before we get started, i'mgoing to ask the panel just a couple of questions, and i'll try to hurry up so we can get toyour questions. but i do want to talk a little bit about u.s. manufacturing and just howit punches above its weight. and i think a lot of these statistics will not be knownto you. but i had the benefit of working with peopleboth in the department and the white house
who really cared about u.s. manufacturingand the manufacturing renaissance that we're experiencing. so manufacturing still only accounts for about12 percent of u.s. gdp. but it accounts for 70 percent of all private-sector researchand development funding. sixty percent of all u.s. r&d employees are involved in manufacturing.and over 90 percent of all patents that are filed in the united states deal with manufacturing,not to mention that a majority of our exports from this country come from our manufacturingcommunity. also, contrary to popular opinions, manufacturingcreates very well-paying jobs, and we're not even here talking about the spillover jobsthat are occurred. but the last data we have,
which was from 2011, says that new hires inthe manufacturing sector on average make 38 percent more money than those in the non-manufacturingsector. we are truly in an environment where we aretrying to have this renaissance of manufacturing in the united states, and i'm pleased -- iwas pleased to be part of the president's initiative on the national manufacturing initiative-- the institutes. when we got all of the experts, including many people in this roomand around the table, together and said, what was the first pilot project we should fundas part of the president's initiative? there was almost unanimity about additive manufacturing,particularly 3-d printing. and then we worked closely with the whitehouse for the department to take the lead
on that youngstown effort that was announcedjust a few -- six months after the president announced his initiative. and that is 3-dprinting, and that's what we'll be talking about today. it is truly a revolutionary science.it's a revolutionary technology. but it is fraught with complications, everything fromintellectual property to many things you read in the paper every day about what you canprint at home and what you can't print at home. and hopefully we'll open that discussionup to try to discuss a lot of those -- of those issues. so let me start with cliff. and i'd just askabout manufacturing in general and about how transformation, a revolution -- you've writtena lot about this -- a technology like this
can be. waldman: well, i think in the manufacturingspace, technologies are starting to do what they should do, which is to solve problems.and as we've become more globalized, we have both more opportunities and more problems.and i think two of the interesting problems, two of the critical problems that technologyand manufacturing technologies in particular can help us with are, one, entrepreneurship. one of the reasons that we have such a weakjob market recovery started even before the great recession, years before the great recession,when we saw a slide in business start-up activity. and i have to say that, even within manufacturing,business start-up activity has been sliding,
and sliding prodigiously. one of the things that a 3-d printer can dois it can incite, you know, a manufacturing start-up within a house. it's becoming -- itmay become the manufacturing equivalent of a fax machine in a basement. that thing overthere can fit on somebody's table, and then the imagination and the ambition of the entrepreneur-- we may have a whole new sector that we very much need in manufacturing and in theeconomy as a whole. second of all, a lot of manufacturing -- domesticmanufacturing development policies thinking is starting to become regionally based. andi just finished a large project for the southern governors' association thinking about advancedmanufacturing within the south. very interesting
analysis, but one of the biggest challenges-- certainly in the south and in other parts of the country -- is, ok, the urban centers,which are gaining in population dramatically, certainly can be areas of dynamism, but howdo you allow manufacturing to infiltrate the rural areas? i mean, you can't -- it seemsto me, you can't really have an effective regional development strategies, if you thinkabout the urban areas that ignore the rural areas. so i think small technologies, efficient technologieslike 3-d, which is in its early stages, can help with the -- sort of the broad need toinclude rural areas, to infiltrate rural areas with manufacturing technology. so, again,those two things are examples of how technology,
particularly in manufacturing, can be an enabler,a problem-solver, as they should be. lambert: so with that, brad, having -- representinga company that has both interest in both large centers and small rural areas, how are youseeing this technology transform the business case for a company like lockheed? pietras: sure, i want to echo what my colleaguejust said regarding about how it really enables manufacturing across a number of sectors thatwouldn't otherwise have access to it. and, you know, as sort of the culmination of theintegration of a number of technologies, the same way that paper printing did with theinternet and with your printer, with your inkjet printer at your desktop, bringing togetheradvanced materials with digitizing of the
manufacturing process and design enables thissort of renaissance of manufacturing at a very high-tech level, but it also democratizesit. it really makes it available across a diverse set of domains and creativity thatdoes things like -- like the internet did for information, this could do for manufacturing. and in a similar way for a large industry,it really impacts everything from something as simple as taking costs out of manufacturing.so rather than taking a multi-ton ingot of titanium and hogging out 99 percent or moreto come up with a part, you then instead start with the material in some other form and thenbuild the part in a very efficient, in a very logical way.
not to mention, it allows you to have accessto that third dimension in manufacturing that you might not be able to get when you're tryingto actually machine out a solid state of metal. say you wanted to put something, a structurewithin a structure, but you could never get the machine tools in, so rather than havinga multi-part integration, welding seams, and building a very complicated part, you canactually just print it as one single large part, and that not only enables more sophisticateddesign and more capability, it also takes a lot of the cost of the manufacturing out. not to mention the diversity, as well. ifyou consider that you no longer have to have collocation of large manufacturing with yourdesign engineers, but you can actually have
the parts built from a distance. i think thatalso enables a lot of both innovation and new ways of doing things that we hadn't consideredbefore. lambert: so i want to go to you and talk aboutthe stratification of the industry. but before i do, the implications of what you just said,brad, about intellectual property and the -- and i think this is open for all of thepanel -- but we saw that in the department at least as one of the big hurdles there.who would own the design? and who would be able to print it? and what would the protectionof that file, in essence -- i mean, we saw it as a revolutionary ability -- we couldprint ships -- you know, parts on a ship instead of tendering them.
but what are the implications of a companylike lockheed? how do you -- how are you viewing the intellectual property issue? pietras: sure. like any other intellectualproperty or trade secret, it brings with it much of the same problems and more, becauseof what you said. you can have a design where you can have a three-dimensional scan of itnow and then just upload a file and recreate the part almost very precisely. so that -- you have to now consider, how doyou assure that the part quality is the same, if it gets into the pipeline in terms of logisticsand things of that nature into a supply chain. i still think, though, that much of the know-how,much of the performance of the parts will
be in the material used itself. and so theformulas and recipes used for the material to actually create or print the part willhave a significant impact as to whether or not you can really reproduce something soeasily. lambert: truly secret sauce. pietras: indeed. indeed. it's a secret saucein the part. and i think not just the polymers that you see out in the hallway, which isa fantastic sort of version 1.0 of 3-d printing. but when you consider things like advancedmetals and titanium, things of that nature, where you can not only use a single metalor single formulation, you can actually create gradients and have multiple different typesof materials in -- mixed in, just the way
you change colors in your ink, you could changethe material properties at a certain part or a certain location in the part that you'rebuilding or the item that you're building. and that type of manufacturing capabilityi think is yet to be realized in terms of what can we do with that. it's very exciting.it's not yet realized. it's a whole new dimension of the problem. lambert: well, now turning to somebody whospent a career investing in companies and finally chose one, i'd be very interestedin your point of view of the stratification of the -- how the industry has developed,and particularly how the u.s. industry compared to the global industry. this is a global -- youknow, as brad pointed out, i mean, you can
build a file somewhere and have it printedsomewhere else. it is a global industry. but we still have a few u.s. players, or maybejust one now... evans: yeah. well, ok, so my company is 3dsystems, and it invented 3-d printing 30 years ago, and it's headquartered in rock hill,south carolina, so a good, old-fashioned -- in chemical alley, if you will. but, really, the way to think about the industryis a consumer side to the industry and an industrial side. and on a consumer side, there'sa proliferation of start-ups. there's over 100 companies that are doing a consumer machine,like you see out in the hall, under $500 bucks, assemble it yourself. there's no shortageof those companies. there's a lot of them.
on the industrial side, so now -- so that'sa $500 printer that will do plastic. (crosstalk) evans: and then as you move to an industrial-sizedprinter, you're up to $1 million in some cases machine as big as the stage that can do aircraftwings and can do lots of really interesting stuff with lots of different materials. andthere are really about 10 companies that are -- the german -- there's a number of germancompanies that are quality and at work. there is -- there's 3d systems, the inventor ofthe field, and then there's another u.s. company that's merged with an israeli company andis more -- looks more like an israeli company today, so it's really an israeli-type companyin the field. and you can think of maybe 10
companies that are delivering machines thatindustrial users are evaluating and implementing into their factories. now, that's where we stand today. many governments-- china, singapore, many other places -- have announced big spending plans to bring 3-dprinting to their shores. and so i think we're going to see -- we're going to see the landscapechange over time. lambert: that leads me to my question thati'll ask all three of you before we open it up to questions from the audience, which is,the u.s. government was, frankly, i think, in many ways out in front of trying to -- youknow, it was a -- in my opinion, a paltry sum that we did to help industry in this field.
immediately, it was copied by all of theseforeign countries with a much larger number, more zeroes involved at the end of it. whatshould u.s. government policy be? should there be a u.s. government policy about this new,exciting emerging technology? i turn to you, first. waldman: i'd like to sort of phrase it ina broader arena than just 3-d. we're in a time where there's a lot of cutting-edge technologiesthat are sort of encircling the manufacturing sector -- 3-d, virtual simulation, the internetof things, many, many things -- and i think we need a policy that will sort of give usthe biggest bang for the buck on this. that means that the u.s. should probably investin education. what's the best way to -- you
know, bring our scientists or engineers towork in teaching people how to use these things. enable our entrepreneurs -- as i said at thebeginning -- who have interesting ideas for using 3-d printers and some of these otherthings. and then, at the same time, to regulate excesses that are unfortunate and can createintellectual property problems and other sorts of things. and it's just the -- people always talk aboutpolicies in terms of the u.s. government. again, with regional thinking starting tosort of encircle manufacturing policy, the states have a role to play there. so i cansee a federal-state cooperative that would invest in education and help us get the biggestbang for the buck with this whole panoply
of manufacturing technologies that are reallystarting to infiltrate goods production. lambert: interesting. pietras: yeah, i completely agree. in particularwith the strengthening of intellectual property laws and protection will always be very importantin this arena, and any new innovation, i think, we need to be as aggressive in creating theright environment for the entrepreneur to get return on investment so the market canwork properly. lambert: right. pietras: we spend a lot of money on researchand development in the united states both as a government and as private agencies. andif we can't capitalize on that research and
development investment, then eventually we'lllose in the long run, for sure. education, i think, is also critical. manufacturingof the future in the united states -- the reason manufacturing is coming back to theunited states is because technologies -- like advanced manufacturing, robotics, 3-d printing,and such -- are taking the cheap labor force component out of the equation. and so manufacturingof the future in the united states isn't just going to be folks on the floor bending metaland sweating and, you know, sparks and dirty manufacturing. it's going to be computer science.it's going to be mathematics. it's going to be material science. and i think i mentioned before, one of theexciting parts about 3-d and additive manufacturing
isn't just the fact that you can digitizeand press a button and get a product out. but the fact that you now have control ofthe placement of the material properties all throughout whatever it is you're designingis truly a revolutionary capability that simply just doesn't exist in any other technology. to really take advantage of that, we needto prepare an engineering and scientific workforce for the future that knows what to do withthat. and that's really been the strength of the united states throughout our history.many people copy us, but the innovation occurs here. and now taking away that sort of manufacturingcost advantage from -- away from our competitors also brings in that -- it keeps that long-termeconomic benefit of the investment we're making
today in manufacturing. i think that's goingto be a very important revolutionary change in the future of the country. evans: great. to me, you guys both hit tome the number-one issue the government can get involved with. if you can push 3-d printinginto the schools, i think you set yourself up for the manufacturing platform for thefuture, all the way down to the fourth grade. it should be in science classrooms. thereshould be curriculum attached to it. and not just the printer, but also the newtools of design, because we're moving away from traditional cad cad-ing and softwarecoding to some very intuitive ways to ideate, using your hands, digital playworks, scanning,and teaching the children the ways to use
-- to express their creativity through thesenew tools of design, press the button, print it out. it's extraordinary exciting. and ifwe teach the kids to do it, they will come through the system, and it will really meansomething for america. lambert: i'll just say that the applicationi think you all invented, the ipad application, where you can actually design it, my kidsuse that all the time. i have a 6- and 8-year-old. they use it all the time. but then they actuallyhave to translate it into millimeters, and it truly -- you know, you can draw it, butthen you actually have to, you know, design it in a different program. and then they printit out and they get to see the result in, you know, four or five hours. it's reallytruly amazing.
with that, i'd like to open it up to questionshere, please. when i recognize you, state your name and affiliation. and remember, again,this is on-the-record. question: rob cortel (ph) with intelix. soi'm hearing all this about protection of ip and the government has to get involved, andblah, blah, blah. it seems to me that, in fact, this has actually created a life ofits own. when you think about alternative uses, biotechnology, et cetera, and so i'mkind of posing to you the question, is there an open source strategy equivalent for theindustry, where you -- you do own the ip, but somehow you kind of stand back and letall of these other things proliferate. lambert: that's interesting. i'd point toyou first, because i know 3d has wrestled
with this... evans: yeah, the -- well, the... lambert: ... about a proprietary system... evans: the open-source community is very activein this field, and a lot of those consumer machines were an outgrowth the effect of reprap,which was an open-source movement that created a lot of companies. and so open-source isout there. the sort of second divide in the industryis what we might say is a closed versus an open system, which is -- which is when yousell the machine, do you provide the materials yourself to what goes into the machine? ordo you -- or can any materials go flowing
through there? i think -- but i think whatyou're really referring to is, how do you control the flow of a .stl file -- all thesefiles are .stl -- in stereolithography. how do you control the files that get moved aroundand printed in different places? and there's no easy answer to that question. lambert: it just makes, you know, all theproblems we've had with cybersecurity, both in my former job in the department, but alsojust in industry, it just makes this more complicated, because now you do have designengineers who are designing really nice products. and how do you control, to your point, theip -- i mean, who owns -- who... question: well, i'm actually not talking -- i'mactually not talking about files. i'm actually
talking about the use. so what you describedwas a razor blade strategy, so you give everybody a razor and then -- i mean, the blade -- imean, the razor, and other people -- you keep providing blades. but what i'm asking is, the uses -- now, maybethere's a strategy in providing the materials, maybe there's a -- there's a whole categoryof issues around the ip of the cad files, or whatever you want to call them, the dotfiles. the other issue is the uses, so you have scientists out there taking the machineand modifying it for the use in creating biological, you know, organisms or mechanisms or thingslike that. that's really what i'm talking about.
do you want to control it? or do you wantto encourage it? because if you encourage it, then you actually create this industrythat, by the way, the government doesn't have to deal with -- i mean, doesn't have to getin the middle of promoting. waldman: the one thing i'd like to guard againstthese days is this unfortunate pattern for the united states, where we were are worldleaders in disruptive technologies, but less good with incremental technologies, wherewe create the 3-d printers, but, you know, the changes, the evolutions are sort of -- andthe benefits of the evolutions are sort of given away in a less than optimal competitivearena. so... lambert: bps.
waldman: bps is a perfect example. let's notsay that the 3-d printer is here, hooray, we did it, and stop -- you know, we shouldbe constantly innovating even if right now innovations continue on the margin. thosemarginal innovations are as valuable, have proven to be as valuable for an economy, fora domestic manufacturing sector as even the initial thrust. and so in a broader sense,your question is asking, you know, let's not stop innovating. just because the machineis there, you know, it's the first draft of it. we should be, you know, considering howwe can benefit from future drafts and getting toward a more and more final product and notgiving that away. lambert: and i'd just -- from, you know, again,my previous life, defense, i was a constant
shill for saying, you know, we can two things.we can either build walls around what we have or we can continue to make things people wantto steal. i'd rather go with the latter, and i think that's -- this industry is exactlyin that position right now. evans: people are hacking these machines allover the place. the bioprinting essentially came around because they could take -- ratherthan extruding plastic through the nozzle, like you see in the hallway, stem cells gointo the top of the funnel and come out the nozzle and get deposit in the place, and thestem cell differentiates, and effectively starting hacking these fen machines, and allof a sudden we have bioprinting. you don't want to stop that. i want them to hack away.
lambert: let's go over here. yes, ma'am? question: it seems clear, but correct me... lambert: i'm sorry. could you state... question: and i'm julia moore with the pewcharitable trust, but was with the national science foundation during the nanotechnologyinitiative days. but it seems clear to me that this is a less labor-intensive industryand that while you do need an educated stem workforce, you're going to need fewer peoplethan you did to build the old industries that america is used to. is that an accurate perception on my part,that the workforce demand is going to be lower
and, if so, what do we do with those employees? lambert: it's right up your alley. waldman: this is something i talk about allthe time. i mean, workforce issues are probably the number-one issues for mapi members. ido speeches. we have our council meetings. and i could be talking about one thing, andsomehow the issue gravitates over to workforce issues. as to your question, i would say i'm not sure.i know that's the theory, that these technologies are creating less of a labor-intensive manufacturingsector, and therefore will just need fewer jobs. i think that's a very static view ofthings. i think it's going to reallocate the
kinds of jobs that we need. and what we're going to have to do is takethe lower skilled workers and invest in them. but the number of jobs -- i know that's theprevailing theory now -- but i think that's somewhat of a short-sighted prediction. lambert: i would agree. that's -- i mean,how many people is lockheed -- how many engineering talents are you having on this particulararea in 3-d? pietras: oh, we have many programs going onin 3-d spread out across the whole of the industry, in particular trying to understandhow we can create better performance in the products that we make today, in terms of loweringcost, but also what can we do tomorrow with
the technology? i mentioned before the advanceof the material properties and how we can create different structures and differentarticles. you know, there's -- and just one commentto follow-up on what we said about the dynamics of the market -- i think any disruptive technologywill cause -- it's a disruption by definition. it's not necessarily a bad thing. it's a shift.and if we remain static, then one could argue, well, did the advent of personal computersand printers obviate the need for anyone to have, you know, anything that was done beforeat a specialty house? because now people could do it at home. but what it did is it -- the technology enablesmore people to come to the marketplace with
more ideas. and that by itself will causechanges in the workforce, but those changes throughout history have always been for thebetter. it's been a shift towards more improved manufacturing capabilities, lower cost accessto manufacturing capabilities to different sectors of society, and then, of course, theglobalization of that technology increases the entire market space. and as you said before, it's really up tothe united states to create both the policies and the future, you know, set us on the rightpath for the future, and that's going to require a lot of thinking today, because we don'twant those innovations that we're creating here at home to just enable economies aroundthe world by themselves. we want to make sure
that we have the same enabling, the same growthin the united states as it grows worldwide, because it will. it's not going to stay here.and that's not a bad thing, because the diversity of thought and ideas is going to benefit everybody,including the united states, and it keeps us sharp and moving forward. lambert: absolutely. it's great. sir? question: norman neureiter with the americanassociation... lambert: sorry. can you wait for the... question: norman neureiter with the americanassociation for the advancement of science. what's the present market size of 3-d printing?and if you look out 10 years, what do you
project it to be? what are your particularmost promising sectors in this area? and you say, did you invent it 30 years ago? whattook so long? we only have heard about it in the last two years, and it's suddenly thebiggest thing going. that's pretty slow. go back to the integrated circuit in '58, youknow, we were in a trade war with japan within 30 years. i mean... evans: thirty-year overnight success. it'sthe way a lot of technologies develop. this one was, in the words of stephen jay gould,maybe, punctuated equilibrium. it was -- forces were building, building, building, and thenit just -- and then it broke out. it reached the tipping point.
the industry is $3 billion today. and yousaid, what is it going to be in 10 years? and my estimate is $30 billion. i think it'sa 10x in 10 years. i am an outlier on that. that's my belief. and there aren't many whojoin me. question: too low or too high? evans: i'm an outlier, in that is no one elsethat thinks -- that that's a reasonable number. they think it's a lot lower. (unknown): i think it's a lot higher. evans: the major use cases are everything.it's a horizontal technology going everywhere. it's going into medical. it's going into aerospaceat a very fast rate, because you can 3-d print
aircraft engine parts and take weight out,and so they're redesigning aircraft engines to 3-d print a lot of these parts. and onceyou do the aircraft engine, you can do the car engine, you can do trains, you can dohelicopters. anything that moves in transportation is going to have a 3-d printing input, becauseyou can take weight out of the design with the way the printers work, and weight is goldin transportation, fuel savings. the proliferation of this technology in medical,it just takes your breath away. we don't have time to go into it. there's so many differentways that surgeons are using it, in the way that radiologists are now using it. dentalhas been a very significant use case. it's really everywhere. consumer goods, your 3-dprinting sporting goods, 3-d printing of musical
instruments. you're seeing 3-d printing ofshoes and clothes. food is coming. there's no -- i really -- i don't have that -- maybewicker furniture and helium balloons will not have it. lambert: yes, over here? question: rebecca patterson, national defenseuniversity. i'm wondering if you would talk a bit about any concerns you have on the consumerside, then. given the proliferation across all these sectors, do you -- are you concernedabout flawed designs by copiers or poor use of materials, any of those sorts of issues? evans: yes, i am.
lambert: i think that's a big issue. and youdidn't say guns, but somebody's going to say it, so we might as well start talking aboutit. i mean, there are -- you know, as every new technology evolves, there are both goodand there's evil. and as an industry, that's something that they'll have to wrestle with,and i don't know if you have any thoughts about your worries or concerns about how thisadvanced technology might be used and from your historic -- for bad uses for societyas opposed to good uses. evans: i don't have any revolutionary thoughts,other than to say this is the government i think needs to come up with some good effectiveregulation that tamps down the use cases that are not in society's interest. and that'snot unlike any other technology. and we -- 3d
systems is very supportive of any legislationthat uses this technology in a responsible fashion. waldman: advancements have risks, and allof them -- and, yes, we can 3-d print a gun. maybe we can 3-d print a technology that canstop a shooter. you know, so you have to sort of consider the good and the bad points, whichis why markets -- while they are doing tremendous amounts here, we need, you know, a littlebit of policy into the picture. to your question, sir, i understand that thefirst experiments with 3-d printers were done in the 1960s, that there were some initialexperiments -- i have -- i have no idea if there's any correlation, but think about -- thinkabout the -- you know, the federal investment
in basic science in the 1960s, the apolloera, and it's been sliding ever since. i don't know if there's any correlation, butit certainly is at least an interesting morality tale that the initial experiments for thisvery breakthrough technology started in a period when federal -- you know, federal investmentin basic science, the apollo-era thinking of the government was really at its high andhas been sliding ever since. lambert: yes? yes, ma'am, in the back. question: so my name is sara agarwal. i'mwith hewlett-packard. and as you know, we've made a lot of announcements about going intothis very important sector belatedly, but in a big way. i focus more on emerging markets,and my sort of thinking around this is that
there's incredible potential in emerging marketsto change their production methods to go from raw materials to more value-added services,right? i mean, if we think about the fact that coted'ivoire could tomorrow start producing chocolate, instead of just manufacturing cocoa beans,or botswana could produce high-end diamond jewelry, as opposed to just mining, that hasfantastic implications for economic change, which ultimately alters relationships betweennations, right? and i think that's why we talk about these things at a place like thecouncil on foreign relations. so my question is, have you all thought aboutthe implications of not only for the united states, but for other countries how this couldpotentially change relationships between countries
and across regions because of changes in manufacturingcapabilities and economic advancements? waldman: that's interesting. let me startwith you. i'll just say that we -- you know, i think the u.s. has obviously led in thiseffort, and particularly i give credit to the administration for focusing on it threeyears ago. but since we've done that, we have seen just an explosion of replication, inessence, from other nations at a much larger scale than the u.s. government has done. idon't know what your experience has been. waldman: well, i'll say two things. if youhad asked -- if i had -- asked me about china and india, let's, you know, specifically focuson that -- a few years ago, i would be answering your question in the context of the u.s. havingto get its act together in response to those
competitive threats. now i think china and india need to -- we'rerealizing that they have issues there that they need to think about. china needs to sortof embolden its rural population, its middle -- for its own social stability, and, youknow, for the sake of people who are still living in -- you know, in great poverty, inspite of the -- you know, the booming advancement of china. now, what you have to think about it in termsof global manufacturing supply chains is that we have a lot of -- the united states is involvedin a lot of products that are made in 11 different countries, where you have -- you know, whereeverybody has some piece of this. and i think
3-d printing could take those -- you know,that 11-country supply chain and turn into a 30-country supply chain that could extendfrom central china to canton, ohio, which would -- which is not a zero-sum game, whichwould embolden everybody, which would be helpful to manufacturing workers in ohio and to thestandard of living in the poorest parts of china and india. this technology can, i think, embolden largerand more global manufacturing supply chains to both the benefits of emerging markets andto the advanced economies which for a while are going to, you know, need a shot in thearm themselves. lambert: sir?
question: excuse me. edwin williamson, sullivanand cromwell. a little sort of a comment on the question on the -- about the last subject,as well as one that was earlier, the whole issue -- sort of the effect on the manufacturingbase, not so much domestically on the u.s. i mean, i recognize that this would not bea zero-sum game. but back to china, i mean, my -- i've heardone futurist say that 3-d printing will basically put out of jobs the 600 million people thatthe chinese government is planning on moving from rural areas into cities. a little morecomment on the impact there. lambert: it is a disruptive technology. evans: it's disruptive. i'd be cautious onany of these grand statements developing.
but my -- the way i'm thinking about it isthat the paradigm is shifting from design locally, produce globally to design globally,produce locally. and it's an inversion. and so the way it's really working today isthere's perhaps a shoe designer located in portland, oregon -- think of that company-- and they make a shoe design, they send it to asia, and a million shoes get made.it comes back to america and ends up on retail stores and hoping someone walks by and buysone. and when you look at the tools of design today-- i'm thinking of grabcad and other type of cloud-based collaborative design houses-- you can throw a design onto a collaborative cloud-based system. designers from all overthe world can contribute to it. hey, do this,
do this, move this, shape it this way, youcan get input from designers all over, so a lot of these guys in india that contributeto these designs. so you've got global design, and then we're just going to send that fileto a printer in boston, because there's -- we've got orders for 1,000 of these shoes in boston,and it has boston celtics on -- you know, written into it or something. so i see it as, you know, design functionis going global. manufacturing is going local, and that's an inversion of where we've been. lambert: i think that's what we've seen inreal examples. and if you think about, if you go to a site like sd (ph) or shapeways,which some of the jewelry out there is made
by, these are designers from all over theworld, but they're printed mostly here in the u.s., and those are u.s. jobs that arecoming. sir? question: i'm bob perry from the corporatecouncil on africa. my question has to do with supply chain integrity, performance integrityof products. there's a problem with counterfeiting now, so once you start distributing the productionprocess, how do you set and police standards to assure that products that are produced-- and i say it's particularly important in aeronautical, biological sense, to get everyonein the supply chain producing to meet the standards so that you don't have failure.
and this is both a u.s. problem. and thenin globalized production, i think, there has to be buy-in from all producers. lambert: it's an excellent question. evans: that's integral to our strategy at3d systems, which is we have an integrated system, and we cannot guarantee the outputof that machine if you don't use our materials, because our materials are engineered to gointo the machines, and it's all -- and we're like apple. we deliver you a solution, anoutcome. and so if you start salting in all these new things, we can just -- it's goingto -- the structural integrity of the part could be compromised.
so our view is that an integrated system andthe way that we do it, which is you buy the machine and the materials together as a package,is how we provide that safety and security. pietras: yeah, global supply chain is certainlya challenge, and it's -- and it requires really rigorous understanding of where your partsare manufactured, the materials used, the provenance over the components, as well. i think one of the areas where you're goingto find -- we've simplified a little bit the whole process of 3-d printing and expandedit into many things where it isn't ready to go just yet, but it is certainly on its waythere, to your comments about the growth. the materials required to make critical partsare -- it's a very stressful -- in the aerospace
industry, weight is critical. form and functionare critical. and so you can't just take any old material and create a part and do a one-for-onereplacement. the design of the individual parts on an aircraft, in particular a fighterplane or especially in a satellite or a spacecraft, a manned spacecraft, where weight is a premium,are designed with precise and intricate knowledge of the material properties. and how you'vedesigned those parts is completely coupled to that knowledge and understanding of thescientific application of those, right to the granular structure of a composite. so it's not so simple as to just say, well,i'm going to set up a 3-d printer and i'm going to start manufacturing parts and slipthem into a supply chain. in the future, when
3-d printing expands into metals and otherthings that are -- that could do that, there's a number of technologies already availabletoday to assure the integrity of the supply chain. right from just simple things as stampingparts and having visual inspectors following the parts in terms of the shipping and secureshipping, down to nanotechnologies, which can be mixed into the materials themselves,and a simple scan will tell you whether or not the provenance of that part came fromthe manufacturing. and each individual machine can have its own individual nanotechnologystamp on each part. so you have a built-in provenance and checking system that cannotbe forged. so i'm confident that the technologies arewell in place and well utilized in today's
supply chain and will be extended to thisnew technology. and i think that the globalization of the supply chain is something that -- weare all becoming international companies. and to work with selling into a country ata large scale, the country's naturally going to want to look to benefits that will occurfrom the partnership with u.s. industry. and this is just one incredibly enabling technologythat can help us grow as an -- growing our international markets from domestic supplyin the united states. question: fred roggero from -- well, retiredair force. but one of the things is, given that the technology's advancing at the speedof moore's law, yet the bureaucratic policy, as you've discussed, is still rooted in industrialrevolution era, a long time ago, where is
that change going to come from? when are wegoing to get those agreed-upon standards for metal materials, for example? is that leadershipfor that change going to come from industry, from the manufactures like lockheed, or fromgovernment? and how do you think that happens? lambert: i'm sure there's going to be threedifferent opinions here, and i'll add a fourth, which is government's not very good at doingthis. industry standards tend to help us. i think it needs to come from industry. but that means industry has to mobilize, soi'd be interested in your comments, because in a vacuum, the government will find a solutionto a problem that may not exist. so... pietras: i'll just say, there's already anumber of standards in place for testing materials.
so, for example, any types of aluminum titaniumpolymers composites, there is -- there are scores of industry standard tests that goon, you know, three-point bend tests and, you know, fracture tests and pull tests. any -- and we have developed at lockheed martina number of new materials already that are going into our product lines, and they havehad to go through the same rigorous testing before qualification for flight or qualificationfor space or wherever the application is. so i think that the mechanisms for creatingthe new -- for characterizing the materials and the parts already exist and will continueas they have been very successfully in the past. so i'm not too concerned about whetheror not the standards organizations can adopt
to the new technologies. they've done a pretty-- working with nanotechnology and the insertion of nano-structures into polymers and composites,we've had to go through all the same rigorous testing and worked with nist and with otheragencies in the u.s. government, as well as with niosh and osha and epa to assure thatany new materials that enter the market are safe and do all those things -- the mechanismsare in place, and they will be exercised. you can't just put a new material on the marketthat might not perform properly. the mechanisms are there, i think, to assure that we'll adjust. lambert: and i'd just add, that's a uniquelyamerican thing. i mean, again... pietras: we are leaders there, for sure.
lambert: ... a shoutout to nist and to otherorganizations that help make these standards a reality and common. and that's why, frankly,the world looks to us to set these standards, because we still have that role in settingthose standards. sir, in the back? question: hi, i'm marc levinson with the congressionalresearch service. a question for hugh evans based on your comment a moment ago about howyour company is essentially selling solutions that include materials. could you take usthrough a little bit how you handle an order, an industrial -- potential industrial useris coming to you looking for a machine for a specific purpose? does that mean that you'reactually custom-designing the material to
be used in the 3-d printer for that particularcustomer and that that's part of the transaction selling the printer? evans: not exactly, but a little bit. the-- an industrial user who gets started, industrial users effectively do two things. they havetheir cad drawings. they have their cad file. and they will frequently send the file towhat we call a service bureau, which is just a -- factories that we have, we have 10 ofthem, that have legions of these machines in there, and we start doing printing outtheir parts for them and shipping them to so many industrial customers just get goingby essentially outsourcing it to a -- to a service bureau and say make -- start makingthis. and can we make it in this? it's a low-durometer
silicone. can you get these properties in?there's a lot of black magic that goes into what materials are you going to use, whatmaterial batches you're going to do, and what machine? what's the speeds? it's just a lotof learnings that go on. and once the customer essentially is orderingmore than 10s and 20s of something, then they say to themselves, ok, it's time for us tobuy that machine, put it inside of our four walls, and just run it 24/7 for ourselves.so many customers just start with sort of the outsourcing -- you see this in the pharmaceuticalindustry a lot. they outsource it and then, once it gets to a certain critical mass andthey have the knowledge of what they want, they bring it inside their walls. i don'tknow if that helps, but that's what we see.
lambert: and are you -- from a make-buy decision,in terms of -- from a major company, do you -- do you see that you're outsourcing a lotof that capability to firms that can perform for you? or are you trying to bring that in-house? pietras: well, it's a combination. i mean,it really depends on the application. i think right now the exciting thing that we're lookingat is the very high-end, high-performance side of this. so much of it's being workedin-house, but with the manufacturers of the machinery themselves. because as i said before,the real value comes in as, where are the materials that are being printed? and in theaerospace industry for sure, the high performance aspect of that becomes critical, and it'sa collaboration.
in order for the suppliers of the machinerythat creates the 3-d printers to really understand the market, they need to work in collaborationwith us to understand what we're trying to do with it. and so this -- it's not -- noone's working in a vacuum. it's really a collaborative environment. and it goes all the way backto university research, which funds the primary principal material science that enables thistechnology which allows us to then put it into our programs. lambert: having just heard that, how wouldyou compare this to the other manufacturing revolution that you've written about in theu.s.? i mean, the collaboration between designers and users in the u.s.?
waldman: well, i'll even broaden it, designers,users, all parts of the supply chain, and various parts of government. i think one ofthe things that these advancements are doing is making this old sort of economic policyparadigm of government versus private sector very, very antiquated. i think the efficiencyof these technologies and the fact that, you know, they can only -- they extend the imaginationmeans that they also extend the supply chain. collaborations between -- within the privatesector, between the private sector and the government are going to become so common thatnobody i think eventually is going to -- in this policy area is going to be thinking about,should -- does the government have a role? does the private sector have a role? it'sgoing to just sort of push that old fight,
at least in this area, to the side. lambert: interesting. i would ask one questionof all of you. probably won't name names, but in my experience, there were very fewpeople in a policy role on capitol hill in particular that really were focused on thisrevolutionary technology. and senator brown, obviously, has been very active in it. what role do you see, if you see any role,for capitol hill to be playing in this debate, whether that be in the protection of ip orwhether that be in credits or investment? waldman: i think they need to learn. i thinkthey need to very much be in a learning phase. i think they -- one of the things about theunited states is that we have a lot of very
good public resources, both for training peoplein this new world of technology and for sort of investing in their development. but we tend to underutilize them. we use themvery inefficiently. so i think i would want capitol hill to do two things, one, learnas much as they can, and then think about how we can use our existing resources moreefficiently to think about standards, to think about bringing back a kind of apollo-era investmentin basic science, which was -- the remarkable -- i think the success of the '60s was collaboration,was the -- not just the dollar investment, but the investment in a collaborative effort.it was a cold war -- it was a cold war-motivated thing, but it motivated us in the right way.and i think we have to start thinking like
that again. pietras: yeah, i agree. i mean, as for whatthe government can do, one of the great things government can do in any of these types ofthings is really bring public awareness to what's happening. it can be inspirationaland aspirational as the apollo program was then. and understanding how this is going to impactthe future of the nation, in terms of starting with the educational systems and stem rightat the grade school era. i think about the idea that, you know, when you learn aerospaceengineering, it typically is in advanced -- you don't really get into it until you're an advancedundergraduate class, where you have wind tunnels
or some things. imagine in the sixth gradeif i could print out -- you know, i could do an aircraft, you know, a small prototype,and i could have three teams, and each team prints out a different structure, and thenthey go try them out in the playground, and then they can sit down, why did this one work?why didn't that one work? go back and -- in a day. i mean, this is -- the excitement is at thespeed at which innovation can occur can also have the same impact on education and inspiringyoung people to go into science. so if one of the roles that can happen in policy isto really inspire that educational aspect of it and really show how it impacts the nationas a whole.
and one thing that -- as we're sitting heretalking about it and thinking of examples of -- you mentioned the apollo program. everybody'sseen the apollo 13 movie, i'm sure, with tom hanks. it's a great movie. and there's a pointwhere they throw a bunch of stuff on the table and say, "this is what they have to work with,and they need to fix this unit. how are they going to go do it?" and it's the famous ducttape and tubes and wires. imagine, instead of that, they called up abunch of engineers and said, "this is the problem. they need to make a modification."and rather than throw duct tape and tubes on the table, they upload a file to the spacecraft,and they print out the right adapters to fix the machinery. and they didn't have to takeany of that stuff with them.
these are the types of inspirational thingsthat i think really have a great impact on future generations. and not to go longwinded,but when you a have a 30-year aircraft program, the people who are going to work on that aircraftin the last third of it are just being born today. so we need those children to come up throughthe educational system inspired by science, inspired by technology, and ready to reallylead the revolution in manufacturing, because we need them and we know we need them now.and our aircraft are flying knowing we need those people excited and educated in scienceand technology, math and engineering. evans: it's a great answer. the -- my onlylittle contribution to this discussion would
be that, in my world, i'd like to rebrandstem into steam, science, technology, engineering, art, and mathematics, because the people i'mrunning into who are making the most effective use of this technology are the -- they callthe makers. i think it's a social movement. i think it's a profound social movement. and they don't -- many of these guys do comeout of mit, but many of them come out of fit and parsons and rhode island school of designand mica. and they're makers. and they're artistic, and they're brilliant, and they'rea little different. and it's phenomenal. and it's bringing into the design function people,i think, who are a little bit -- who are very creative, and this tool is very liberatingto them. so i've really had a recent appreciation
for the artistic aspect of integrating thisinto the traditional engineering function. lambert: that is another way i think thistechnology is truly revolutionary, is that you may find an engineer who designed oneof your key parts that has green hair. and that is -- you're seeing that more and moreof the interchange. i want to close on time, so i thank everyonefor coming. i certainly want to thank you. i want to remind everyone this was on-the-record,but it's -- as we said in a phone call earlier this week, we could spend days on this topic,because it is truly, i think, a revolutionary topic, and it has multiple policy implications.and i thank the council for hosting the event. thank you, all.
(applause)
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