"Wind, Solar, 3D Printers": A Decade Of "Disruption" In One Chart

While "disruption" may sound like a pervasive buzzword cliche that has ubiquitously, and hopelessly penetrated investor jargon in recent years, the reality is that there is nothing new today that wasn't just as annoying innovative over a decade ago, only instead of batteries and LEDs, the two categories now seen as most "disruptive" (another word for deflationary) , it was Wind, Solar, 3D printers and various other fads, as the following chart from Goldman summarizes:

Yet while their coolness may rise and fall, these buzzwords all have one common them: they result in sharp cost-reductions in any industry they touch, leading to narrow and in some cases broad deflation as industry efficiencies rise, and as entrentched competitors find themselves cutting prices to stay competitive with new technologies, even as early equity investors tend to get wiped out as only later iterations of the underlying technology emerge as viable, or as Amara's Law states:

"We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run."

That statement is the basis of how a recent report by Goldman assesses the lifecycle of any technology. The initial conception stage for a new piece of hardware is usually followed by a phase of high expectations. This ‘hype’ part of the cycle is notable for the innovators or the hardware manufacturers outperforming, not just because of the excitement around the new product, but also because demand growth tends to outpace the supply-side response, supporting high prices.

Over time, however, these conditions deteriorate as high prices and a growing addressable market inevitably attracts competition, scale and commoditisation, dragging down the pricing power of hardware providers.

3D printing is a good example of where this has happened recently. As the first chart below shows, 2013-14 was marked not just by high ASPs, but also by strong share price performance for the sector. Since then, however, competition has intensified and both these metrics have declined, much like the number of investor questions we’ve received about 3D printing. Does that mean it was an overhyped product? No. Matthew Cabral writes on page 20 that 3D printing is a growth industry and is attracting larger players such as GE and HP; i.e., falling hardware costs are increasing the probability that it will be broadly adopted and disrupt existing technologies.

When new technologies become more economically viable, we view it as the end of the hype cycle and the beginning of the theme cycle. In this phase, opportunities lie among the enablers and users of the
tech. Solar is a technology that is crossing this threshold, potentially benefitting enablers such as smart  grids, batteries and infrastructure plays, and the users (from electric vehicles to households to industrial companies).

The final stage sees supply and demand dynamics reversed, as the scale of demand eventually pushes down hardware costs sufficiently low that the technology becomes mainstream. At this stage, there is often a revival among hardware manufacturers: those with a cost advantage benefit from rising demand, while others that can innovate are able to enjoy relative pricing power. Wind energy is an excellent case in point here; as the second chart below shows, over the last two years, turbine prices and share prices have decoupled, as the technology has become more economical.

Of course, it’s never as simple as this. For products to make it out of the lab and succeed commercially, they need to make a compelling economic case relative to existing alternatives. While innovation and demand-driven scale are ideal catalysts for costs to decline, most new technologies require external factors to resolve the chicken-and-egg situations that often deter commercialisation.

Ultimately, if successful, the outcome is broad-based cost (and price) reductions, prompting the Federal Reserve to speculate whether or not it ever had a firm grasp on the concept of inflation (or deflation) in the first place.

Comments

HRClinton TBT or not TBT Sat, 10/07/2017 - 14:58 Permalink

Solution: 1. Private properties with Green Watts 'sell' excess Watts (from whatever Renewable source) to Local Green Grid, and 'buys' it when needed. 2. Local Green Greed (public, co-op or private) generates, buys, and sells to a network of Locals. Excess is sold to Regional Green Grid.3. Regional Green Grid does Demand-leveling.This should be obvious to anyone with IQ >100, but clearly it isn't - judging by the comments. 

In reply to by TBT or not TBT

DEMIZEN TBT or not TBT Sat, 10/07/2017 - 14:46 Permalink

it depends on distribution costs and quatities demanded. new composite materials will alow curing at sites composite materials with any demanded mechanical properties. well be able to use aluminim molds to cure materials with way better mechanical properties that molds itself. easy to melt and reuse again. people forget 3d scanners and how these will effect copyright law and flow of information.

In reply to by TBT or not TBT

JuliaS cossack55 Sat, 10/07/2017 - 22:55 Permalink

3D printers are production tools. An average person with a wallet is a consumer, not a producer. To such person a 3D printer has no use, as it requires too much technical know-how to be useful. One has to be able to generate ideas and produce CAD files, instead of merely downloading them off Thingiverse. And even then, it is only good for prototyping, or small scale restoration. It is not a mass production tool. And it is not a new tool either. Computer controlled layer deposition has existed since the 70's. It's just that the general public wasn't aware, wasn't interested, or the items were beyond the budget of a person who might've had an actual application for them.These days anyone can buy a 3D printer. But can anyone use it in a cost effective manner? When you print a bottle cap and it takes you an hour and $10 in wasted filament (before you get it right), instead of buying a pre-made one for a dime, why would you? Desktop 3D printers were marketed to people who had no use for them - they were marketed to consumers. That's why they failed. They did fail as a commercial product.How many people have the level of expertise of say, Dave Jones, Ben Heck or Jeri Ellsworth? How many can use a 3D printer to do something that cannot be produced through other means and will actually cost less than if they were pressed, CNC'ed or injection moulded?When the primary customer is expected to be technologically and financially illiterate, what kind of market do you expect to build? The one that exists right now, where the biggest users of 3D printers are youtubers who buy them just so they could put together a review.They are an amazing tool, don't get me wrong. I've had one myself that I built long before companies such as MakerBot even existed. Designed motor controllers, set up the work bench, written G-code software from scratch, and I've been doing CAD since 1989. Still, from the moment the first cheap commercial product showed up, I thought they were doomed to fail. Once again - as a consumer product, not as a prototyping tool. They have succeeded as the latter, but that market is tiny in comparison and is already fully saturated. Everyone who wanted to get 3D printer already got one, as far as I'm concerned. Yet, Kickstarter doesn't seem to have received the memo. They're watching ads produced by people like them, thinking the market is going. It isn't. It's already done.The next post 3D printer fad is robotic arms. You'll see them being marketed just like 3D printers in the next 2 years. Once again, they'll be advertised as consumer products and they are more so than the last overhyped molten filament dispenser, but they are still, a production tool. Not a consumer device. You'll see exact same trend repeating. Mark my words. They'll rise and they'll fail, leaving only a handful of individuals will will be able to directly benefit from newfound affordability of such devices that used to only exist in auto factories.Majority of people are consumers. Not producers. Anyone living in a city and employed in the service sector has no practical use for a 3D printer or a robotic arm. But that won't keep them for buying into the hype and wasting money, at least initially, before the world moves onto the next fad.

In reply to by cossack55

adr Sat, 10/07/2017 - 14:04 Permalink

Well I saw an ad for Sandcoin's ICO. The first cyrptocoin for high quality sand. Is it going for a multibillion dollar marketcap? At least 3D printers were real, overvalued massively but still real. 

VWAndy Sat, 10/07/2017 - 14:15 Permalink

3D printing is not a disruptive thing. Its simply progress in the right dirrection. Calling it disruptive is wrong. Wind and solar are just a giant waste of time and resources.

RAT005 VWAndy Sat, 10/07/2017 - 14:28 Permalink

2 scales that work for solar and 1 scale that doesn't:Works #1: DIY home that about matches daytime usuage depending on occupied or empty during the day.  About 2-4 panels with micro inverters plugged into the home.  Of course most municipalities outlaw this scale since it isn't a subsidized "jobs creator" and the utility company has no benefit, less tax income for municipality.Works #2: Huge commercial/industrial rooftop installations close to big users.  At least 50 panels.Doesn't Work #1: Commercially installed residential net meetering usually 10-20 panels.  The labor adds 50%, maintenance is out of reach, net meetering means the neighboring ~5 homes use the power and pay more for it during the day so the generator can net meter the power back to their home in the evening for a discount.  The 1 owner almost wins, the 4-5 neighbors loose.

In reply to by VWAndy

RAT005 DEMIZEN Sat, 10/07/2017 - 14:50 Permalink

That would be Works #1 in my list.  Basically instead of every 5th home having 10-20 panels commercially installed with a subsidy paid by other tax payers, have every home have 2-4 panels installed by home owner. The package would be sold at HomeDepot and such.  The total number of panels is about the same for the Save The Earth crowd and the installed cost is much lower plus everyone benefits relative to their actual participation.  The base load for coal then is slightly reduced but quite stable.

In reply to by DEMIZEN

DEMIZEN RAT005 Sat, 10/07/2017 - 15:28 Permalink

right. wind turbines are great to run gages and repetitors off the grid at night, where sustained wind, cloud, and marine layer present. the technology was not meant for politicians to score voting points and install a shitload of them like palm desert.a line of sight, large viewsheds usually coincide with elevated winds and low infrastructure density.

In reply to by RAT005

DEMIZEN Sat, 10/07/2017 - 14:40 Permalink

sell showels never dig for gold unless you know is there. and wait for all that funny money to spill on the main street and you will see the real demand unleahed.these charts are big bank money rigged comic books.

djsmps Sat, 10/07/2017 - 14:33 Permalink

3D printing in some form has been around since the 70's. It was called stereolithography. The cost just went down and someone coined a cute hipster name for it.

my new username Sat, 10/07/2017 - 14:39 Permalink

Cost and Price reductions as a result of innovation or other market changes are NOT deflationary. That is called the market at work.
Deflation is a money event, as are disinflation and inflation.

Hikikomori Sat, 10/07/2017 - 14:47 Permalink

A REAL disruptive technology on few people's radar - hyperrealistic love dolls - will soon have artificial intelligence.  Women may have to seriously step up their game.

Hikikomori mkkby Sat, 10/07/2017 - 16:04 Permalink

mkkby - that was already done over a decade ago - the Japanese invented hyperrealistic dolls, and they are now being made in the US as well.  They are starting to put intelligence programs in them - keep in mind, YOU choose when and how the doll talks.  There is a "reluctant" doll you can buy today, if you fantasize being a rapist, and want to try it out.  When men no longer need to rely on human women for their sexual needs, bitchy but sexy looking women will find their client base has dried up.

In reply to by mkkby

coast1 Sat, 10/07/2017 - 16:23 Permalink

I use solar panels for my off grid situation..  Four (4) sets of 500 watt panels..panels = $500 a setbatteries = $500 a setinverter = $200 a setchaarger (in case its a very cloudy day and u have a generator)  $200 a set,$1500 x 4 = 6kI only use propane for heat, so I have more than enough power for anything else..I still havnt figured out for a washer and dryer tho...anyway, I have had this set up for about 7 years now with no problems...Altho, I am thinking I may need to replace batteries in the next couple of years, which will cost me 1k....as far as wind power, its not good IMO3D printers are awesome, hoping to get one and learn it someday

DEMIZEN coast1 Sat, 10/07/2017 - 17:58 Permalink

extend time on your wash cycle you will need less power to get the same work done. W=Pt use vertical drums.air tunnels are great for drying. heating/cooling the air right at the top/bottom with paint/radiator you will yield good air flows. use your circumstances any extra odorless hot air in surroundings, look at the fruit drying concepts run fans with solar/ heat with propane if you are very into it.I used to get oil on my shirts sank my clothes in a plastic drum lock it and spun it on a turntable for a while. magic happened. now I just throw shirts.

In reply to by coast1

DEMIZEN coast1 Sat, 10/07/2017 - 21:04 Permalink

great. here is some good advice in the right direction. most appliances are made for hi power with restricted space and time in mind. if you have time and space and restricted power consumption your equation is different.http://www.rpc.com.au/information/faq/power-consumption/washing-machine… have a Haier hlp21in it cost 200 and worked flawlessly for 4 years now and keep going. it runs fine on the 800w inverter, I also recommend sharp half pint microwave also runs on the same inverter npfor a very primitive belt driven turntable you can modify a steering arm assembly /w rim that let you snug on a plastic barrel and use 12v motors. you can take one off an old zip scooter lol. zip scooter motors are gold in your situation. lying around everywhere. I used it for beer brewing and converting starch to sugar w amylase but works for tough stain washing too if you ad some borax and bleach. worked fine straight off renogy 100w panel 

In reply to by coast1

coast1 malek Sat, 10/07/2017 - 18:37 Permalink

its not useless,  but its lacking alot of information..its all about math, and there are simple equations that you can easliy learn to see how much electricity you use, and as far as batteries, I forget the name brand but at $250 each and specify for solar panels.. I use a freidge, 2 freezers, a vacuum cleaner once in awhile, lights,  computer, tv monitor, ( i use for watching dvd'd), a blender, etc. only minimal use if you use a microwave, but I dont like microwaves.. For power tools i use a generator most of the time...i live in the northwest, so soalr is not as productive as if I lived in southern calif, or texas, nevada etc.  Verizon for phone/internet, but because I am out in the country its a bit slow, buy unlimted data/text etc. cooking and heating is propane, and all I lack is a washer and dryer.

In reply to by malek

DEMIZEN malek Sat, 10/07/2017 - 20:21 Permalink

I would use Peltier for cooling. cool water to 4C and keep food vacuum sealed in it. I don't think you can beat it efficiency-wise. You can use computer heatsinks on both heat and cool sides. temp probe with a switch is 14 bucks on amazon. If you have a big family use marine cooler. peltier chips will kick in every hour for a minute or so if in shade or grounded. or you can get a freezer chest with a bad compressor and modify it for DC with peltiers it will make an excellent beer and wine cooler.

In reply to by malek

post turtle saver Sat, 10/07/2017 - 22:59 Permalink

love all the experts here shooting down wind power... clueless... Texas gets 10% of its capacity from wind power... in fact, the only reason it isn't more is the feeds into the grid for the wind farms need to be upgraded to take on the capacity the farms can actually generate...another fun fact... Texas is its own grid... furthermore, by law power generated in Texas has to be consumed _in Texas_... California wishes they had the green energy program Texas has, ours actually *works* 

Killerdiggler post turtle saver Sun, 10/08/2017 - 00:42 Permalink

I read yesterday how Scotland wind produced 215% of the WHOLE countries energy needs. 86,467 Mwh. Over a six month span, they produced 125%.  Wind power is awesome if you live in a windy area, more efficient than solar. How is that a stupid idea?As to 3d printing, anyone that likes to work in the garage should have one. A cheap printer is around $200. Plastic is about $15 a kilo. That's a lot of plastic.  Anyone can  print enough stuff from thingiverse alone to pay for the cost of printer and plastic in a few weeks. All that Chinese crap that breaks is easily replaced. I have made parts that sell for $40 to $50 for a bucks worth of filament. Look around and see anything in your house that's plastic and you can make it yourself at home. It takes forever, but it's still quicker than Amazon. Every kid should learn how to 3d model and design. It will be interesting to see how copyright is enforced when everyone can print their own products.What happened with the self sufficient Zerohedge? Everyone here just seems to complain over anything that will make their lives better.

In reply to by post turtle saver

VWAndy Sat, 10/07/2017 - 23:24 Permalink

 3d printing has already found a few places to be useful. Recreating obsolet parts for car restoration is one. The setup I saw was pretty straight forward. They had a laser 3d scanning table thing and a cheap 3d printer one graffics pc. Printing unobtainium in one day is very impressive. 300$ gets you a printer. Turn a young creative kid loose with one and see where it goes. A perfect gift for that grandkid that lacks dirrection. Making shit can be very addictive in a good way. 

The Iconoclast Sun, 10/08/2017 - 08:51 Permalink

Invisalign 3D prints clear plastic disposable braces, basically.  Your dentist takes an impression, they use a CAD-type program to design a sequence of one-week wear appliances.  You change them out every week, then after so many months depending on how crooked your teeth are, your teeth are straight.  Pretty amazing.  Definitely disruptive to orthodontists.We make a case that contains a small computer, a software-defined radio, and a touchscreen.  Did many iterations on it until we had it right, then sent the files out to get the cases mass-produced by traditional means (injection molding).  But we ended up printing hundreds of cases on two fairly cheap printers to keep the pipeline going after we needed a change in the case to accomodate a different screen and fell behind on getting the new cases mass-produced.  Not as slick-looking but completely serviceable.  Not sure how big the opportunity is for the manufacturers who are already under severe pricing pressure, but definitely helped us and easily integrated into our processes.Plus the tech will improve.