Fraud and Froth: Free-Riding the 3D Printing Wave

Abstract

Turning an idea into a working technology is one step to commercialization. Behind every successful technology is successful funding to develop and produce it. If finding funding challenges inventors, investors have the challenge of determining where, how, and with whom to invest. Just because an emerging technology profits some that does not mean that any investor will profit. Standing between entrepreneurs and investors are fraudulent and frothy---speculative, likely-to-fail---firms, a sign of a growing market, reflecting the enthusiasm of promoters and the reality of technological and market uncertainty. Such firms can harm an entire industry by creating distrust and doubt, discouraging investment, and forcing legitimate firms to expand more resources to secure funding. Will fraud and froth adversely affect 3D printing? This chapter offers a historical perspective on people eager to invest in the emerging technologies of independent telephony in the 1890s--1910s, radio in the 1900s, oil in the 1910s--20s, and penny stocks. Although fraud and froth were rife in relation to all these technologies, demand proved so great that the losses comprised only a small part of the market. Similarly, 3D printing will suffer from fraud and froth, but the overall harm should be minimal.