How Market Consolidation is Impacting the Additive Manufacturing Industry
The accessibility and mainstream adoption of Additive Manufacturing technologies have brought about significant changes to the industry landscape. Recent developments have seen major players like Stratasys, 3D Systems and Desktop Metal vying for a merger deal. So, what does this mean for the Additive Manufacturing Industry? Here we’ll explore the benefits and disadvantages of market consolidation whilst assessing the current situation in the market.
The Current Situation of Market Consolidation in the Additive Manufacturing Industry
In recent months, the additive manufacturing industry has been undergoing a dynamic phase of market consolidation. The merger between industry leaders Stratasys and Desktop Metal is predicted to close by the end of 2023, with a combined value of $1.8 billion.
The merger of Stratasys and Desktop Metal will result in a business that covers a diverse portfolio, including various additive manufacturing technologies and materials, positioning it as a direct competitor to other industry hardware providers. Notably, 3D Systems have also offered to acquire Stratasys, potentially leading to further consolidation, though to date, their offers continue to be rejected by Stratasys.
This comes following investments in the industry, with over $ 1.3 billion in funding for 3D printing industries in 2022. Yet, with further consolidations likely on the horizon, we wanted to focus a spotlight on how this will impact the job and talent market in AM going forward, in the 2024 AM Salary Survey.
Benefits of Market Consolidation in the Additive Manufacturing Industry
Market Consolidation in Additive Manufacturing can have several benefits both on a granular basis for individual businesses but also across the industry as a whole.
A Shift in Hiring Demand
Larger companies that have merged are likely to have different talent needs compared to specialized firms. They are likely to prioritize hiring individuals with specialized skills such as engineers, technicians and designers, leading to growth in the industry.
Market consolidation can lead to increased competition, especially in highly specialized and top-level roles. Companies will need to engage in global talent search, in order to find the best candidates for their needs.
Introducing Economies of Scale
By consolidating individual businesses, additive manufacturing companies can benefit from cost advantages as their production or output increases. As companies merge, operations become streamlined, which reduces production costs and increases overall efficiency.
Increased Investment
Market consolidation can result in access to more financial resources. This means that, after companies merge, they’re more likely to have access to capital, allowing for more investment in research and development in the industry. This can potentially drive more innovation, leading to the use of more advanced technologies and materials.
Expanded Product Range
Through consolidation, businesses can broaden their range of 3D printing technologies and materials. Instead of specializing in one type of product, additive manufacturing businesses are able to diversify their product range. Merging with other businesses, additive manufacturing businesses could potentially lead to cross-disciplinary innovation and cater to a wider array of customer needs and applications.
Risk Mitigation
In the current economic climate, consolidation can be used to buffer against market fluctuations. The opportunity for collaborative working, streamlined processes and better economy of scale can make companies more robust against unpredictable economic conditions.
Competitive Advantage
Some consolidated businesses can benefit from a stronger competitive edge over their smaller competitors. This is due to the increased scale and diversity of the business. Competitive advantages can also come from the change in demand in the job market as skilled roles become more sought after.
What are the disadvantages of Market Consolidation in Additive Manufacturing?
While market consolidation could mark an exciting transition in additive manufacturing, it’s not without its disadvantages. Especially when it leads to a reduction in competition or innovation.
Job Displacement and Volatility
As consolidation often aims to achieve efficiency and streamlined processes, this can result in job displacement. This displacement is often in production-related roles, where manual tasks may become automated to reduce costs and improve productivity. The jobs that are most impacted are entry-level positions, production roles and unskilled work.
Reduced Competition
A merger between businesses can result in reduced competition, especially in a merger between two large companies such as Stratasys and Desktop Metal, which could limit the number of players in the market and give them less incentive to innovate.
Loss of Specialization
Smaller, specialized companies that are acquired by larger companies could potentially lose their agility and focus. This could potentially limit the development of niche applications that were a specialty of the smaller businesses.
Risk of Companies Monopolizing the Industry
In some cases, market consolidation can lead to the dominance of a few different companies due to their dominant market positions. This may raise concerns about practices that could harm customers and smaller competitors.
Have your say with the 2024 Salary survey
Whether you are an employer in the additive manufacturing industry or a professional. We want to hear from you! Our annual salary survey provides insights into hiring across 3D printing careers, and your contributions can help us to accurately reflect the current state of the industry. Have you experienced the effects of market consolidation in the additive manufacturing industry? Let us know in our salary survey today.
For more information about how we can help, contact our team of expert recruiters today. We also have a wealth of HR resources, such as our annual salary survey report to help you stay on top of hiring trends.
Have YOUR SAY WITH THE 2024 SALARY SURVEY
Whether you are an employer in the additive manufacturing industry or a professional. We want to hear from you! Our annual salary survey provides insights into hiring across 3D printing careers, and your contributions can help us to accurately reflect the current state of the industry. Have you experienced the effects of market consolidation in the additive manufacturing industry? Let us know in our salary survey today.
For more information about how we can help, contact our team of expert recruiters today. We also have a wealth of HR resources, such as our annual salary survey report to help you stay on top of hiring trends.
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