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Industry Standards--A Train of Thought

By: Louis A. Kren

Friday, March 11, 2016
 

In the centuries-old industrial timeline, additive manufacturing is merely an infant. And as a relative newborn, it struggles as it grows, yet embodies unlimited potential.

Paging through this inaugural issue of 3D Metal Printing, we see what the technology already accomplishes, as well as some of the struggles it faces along the way−standards and quality-assurance, for example. But these struggles shouldn’t necessarily bring alarm bells. The fact is, as any new technology matures, such issues are common.

“Information Rules,” authored by Carl Shapiro and Hal R. Varian, details how economic lessons from our industrial past apply just as well in the New Economy.

“Ignore basic economic principles at your own risk,” they write. “Technology changes. Economic laws do not.”

In their book, Shapiro and Varian recount how the American railroad industry−with technology once as shiny and new as additive manufacturing−arrived at a set track width. No one gives track gauge a second thought today, but in the early-19th century the issue threatened to leave this transportation mode fractured. One of the first railroad lines in the South, the South Carolina, chose 5-ft.-gauge tracks (the rails were 5 ft. apart), and other lines in the region followed suit. In the North on the other hand, most lines adopted the “standard” gauge popular in England on mining lines, with rails spaced 4 ft. 8.5 in. apart. Apparently, note the authors, this odd distance dates back to Roman times, when it was considered the ideal width of a loaded cart when pulled by a horse.

By 1860, the United States had seven different gauges in use, with just over half of track mileage of the so-called standard gauge. The next most popular: 5-foot gauge concentrated in the South. Interestingly, gauge differences aided the South during the Civil War, as Northern armies found it difficult to move troops through the South on railroad lines. This historical fact resonated in Finland, which deliberately standardized a railroad gauge that differed from Russian railroads to better defend against possible invasion. The rest of Europe didn’t take heed, adopting a common gauge that simplified Hitler’s march across the continent in World War II.

If invasion isn’t on your radar, standards in general can be quite beneficial, allowing for simple interconnections, larger networks and greater efficiencies, argue the authors. But...

“Private interests can diverge from social interests,” they write. “Battles over which standard to set, or whether there should be a standard at all, are common.”

To illustrate, let’s return to our railroad-gauge example. In 1853 in Erie, PA, three different widths of railroad track met, leading to riots over plans to standardize. Who rioted? The workers whose jobs entailed loading and unloading cargo and changing car wheels…standardization put their livelihoods in jeopardy.

In the end, power settled the railroad-gauge matter. Winning the Civil War gave the North power over the South, effectively keeping that region out of the standards debate. Also, the big Northeastern railroads wanted Western goods moved east and were backed by the Northeast-centered federal government, which itself actively pursued Westward expansion. Of course, these railroads wanted to use what they already had. Thus the standard gauge won the day.

“Southern railroad interests finally met and adopted the standard gauge,” reads “Information Rules.” “…during the spring of 1886, the gauges were changed, converting…more than 11,000 miles of track in the South to match.”

Lessons from this experience remain relevant today, argue the authors:

• Incompatibilities can persist for many years.

• Markets tend to tip toward the leading player.

• Seceding from the standard-setting process can leave you in a weak market position in the future.

• A large buyer can have more influence than suppliers in tipping the balance.

• Those left with the less-popular technology will cut their losses, either by employing adapters or by joining the bandwagon.

Think about these lessons when considering how standards may shake out in additive manufacturing.

 

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