The Third Industrial Revolution

08/30/2012 12:53 pm EST

Focus: MARKETS

Nicholas Vardy

Editor, Bull Market Alert, The Alpha Investor Letter, and The Global Guru

Nicholas Vardy, CIO of Global Guru Capital, discusses what he means by this statement, and what implications it has for investors.

Are we nearing a third industrial revolution? We're here now with Nicholas Vardy. How does that work, a third industrial revolution? Is that possible now?

Yes, it is. A couple of weeks ago, as we record this, The Economist magazine had a special supplement on what it called the third industrial revolution.

The first industrial revolution was the mechanization of textile production in the UK in the 1700s. The second happened in the US in the early 1900s, with Henry Ford and his manufacturing technology. The Economist suggested that the third industrial revolution is coming right now. We're right at the start of it. We don't even realize it. The reason for that is the emergence of 3D printing.

Now explain, what is 3D printing?

3D printing is really a revolutionary new technology. Picture the following possibility: You design a part or pretty much anything on your computer screen using computer-aided design, and you actually press a button and you have a 3D printer, or a box, which actually manufactures that specific design, that customized design, just for you in the material that you choose.

It completely revolutionizes the whole process of manufacturing, because mass manufacturing, what Henry Ford introduced, basically he said anyone can have a Model T as long as it's black. You just design one thing once, and you basically give everyone the same thing.

3D printing, however, is precisely the opposite because you can design anything and you can immediately produce whatever you design. It could be jewelry; it could be a filling for your tooth. There are people in North Carolina working on actually printing body parts based on your DNA.

People at Cornell are actually printing cupcakes. They're designing cupcakes on software, and they were able to produce that using 3D printing technology. It's actually the closest thing to the transporter that you had on Star Trek. You can actually design something, let's say in Montreal, Canada, and print it out in Johannesburg, South Africa.

One of the 3D printing companies in the United States-which is one of my recommendations, Stratasys (SSYS)-actually designed a Harley Davidson-style motorcycle, and actually printed it within the span of a few hours. They manufactured a fully functional motorcycle, which the CEO demonstrated in a video where he pressed the button and he basically launched the whole motorcycle and he could ride it away. It's purely designed on a computer and printed out using a 3D printer.

The implications of this technology are really revolutionary-hence the words the third industrial revolution.

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