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President Biden, Right to Repair, and 3D Printing

[Source: News18]

Charles R. Goulding and Preeti Sulibhavi review new Right to Repair legislation and how it may lead to increased 3D printing.

Competition. From natural selection to business, competition has always been a part of life.

In fact, healthy competition can enhance progress, across industries. It can also drive down prices and improve product development for customers when supply meets demand.

In recent decades, large corporations, whether it is in technology, pharmaceuticals or agriculture, have been “consuming their competitors” rather than competing for customers. That is why on July 9, 2021, Biden signed an executive order with the key objective of cutting down on anti-competitive practices by big business. 

The targeted industries include agriculture, technology and big pharmaceuticals. The executive order on deregulation is aimed at saving the average family $5,000 each year. In fact, the average household would save $330 each year if it could repair its products rather than replacing them. The replacement of products as opposed to the repairing of them adds up to $40 billion nationally, according to the New York Times article titled, “Fight for Your Right to Repair Gadgets,” published on July 15, 2021. Currently, extra costs for repairs fall disproportionately on minorities and Latinos.

With 3D printing and additive manufacturing now widely accessible, the lack in resources for a small company can be alleviated, to some extent. 3D printing is efficient and cost-effective and can now be used with many practical materials, including metal. 3D printers are now less expensive and can complete similar tasks done by traditional expensive manufacturing machinery and equipment.

The industries that Biden and his Administration intend to focus on are all industries that have 3D printing technologies already being integrated. Agriculture utilizes construction and farm equipment from companies, such as Caterpillar, that are seeing 3D printing as a valuable resource. Technology companies can become the designers and developers of scanning software for 3D printers. Pharmaceutical companies can utilize drones and other 3D printed technologies in delivering vital drugs and medications to patients. Or as we reported, with the help of Biden’s executive order, to improve hearing aid availability to our seniors.

The “right to repair” concept that is part of this executive order and allows consumers to bypass manufacturers to seek third-party repairs on products they own. This issue spans industries, from farming to manufacturing, and now consumers who want to use inexpensive, independent repair facilities (as opposed to going through the manufacturer for repairs) can in fact, do just that. This is not an obscure issue, as anyone with an iPhone or a car knows, sometimes going to a small repair shop makes more economical sense than going to the dealership for your car, or the Apple Store for your smart device.

The small repair shop then becomes a resource. To handle the potential increase in demand this executive order will likely bring, 3D printing could be used to manufacture the required parts and components. As we reported back in June, 3D printing is already being used for fabricating critical repair parts in the bus transportation industry. This concept can be applied across a wide array of industries that consumers will now be able to go to third-party vendors for more economically sensible, 3D printed parts.

In the UK and the rest of Europe, the right to repair includes allowing for third-party vendors to manufacture parts or components even after the product (i.e. appliances, phones, etc) has stopped being manufactured. The length of time depends on the type of appliance and/or device in consideration. Now, Biden is chiming in along with the UK and Europe and allowing customers to visit third-party repair facilities for their washing machines, vacuum cleaners, and dishwashers, etc. This will provide consumers with greater options and often better pricing.

The Research & Development Tax Credit

The now permanent Research and Development (R&D) Tax Credit is available for companies developing new or improved products, processes and/or software. As of 2016, eligible startup businesses can use the R&D Tax Credit against $250,000 per year in payroll taxes. 

3D printing can help boost a company’s R&D Tax Credits. Wages for technical employees creating, testing and revising 3D printed prototypes can be included as a percentage of eligible time spent for the R&D Tax Credit. Similarly, when used as a method of improving a process, time spent integrating 3D printing hardware and software counts as an eligible activity. Lastly, when used for modeling and preproduction, the costs of filaments consumed during the development process may also be recovered.

Whether it is used for creating and testing prototypes or for final production, 3D printing is a great indicator that R&D Credit eligible activities are taking place. Companies implementing this technology at any point should consider taking advantage of R&D Tax Credits.

The Invisible Hand

Adam Smith coined the phrase to illustrate the natural movement of prices and the flow of trade in a free market (laissez-faire) economy. Capitalism is driven by competition, which can arguably be part of the invisible hand (or at least one of the fingers). The intersection of supply and demand can be influenced by technology – that includes 3D printing, now an economic actor in this economy.

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