As 3-D printers redesign manufacturing,we see data security shaping up.

Security is taking on a new look

October 25, 2017 • HOME MANUFACTURING

3-D printing is emerging as the next industrial revolution. As products traditionally created in factories are soon assembled in homes, the need to protect information becomes critical.

In the next 30 years, 3-D printing will revolutionize manufacturing and presents the potential for a new industrial revolution. Already, we are seeing new trends emerge in the healthcare and fashion industries. U.S. hearing aid companies have now adopted 3-D printing as the primary source of creation [1] and several athletic footwear companies are implementing this as well. Countless products that have traditionally been created in foreign factories and sold in stores will soon be created at home. Along with this convenience, however, also poses a significant threat to those who traditionally manufacture these products. Theoretically, everything manufactured will become data; a downloadable, digital blueprint susceptible to being copied, stolen and distributed illegally.

Consider how the music industry has been impacted by digitalization and the significant revenue losses incurred from illegal file-sharing. This same threat applies to the film and television industry more recently. Similarly, will 3-D printing soon spell the end for manufacturers of PVC piping and auto parts makers as people gain the ability to build these products themselves? An estimated one million 3-D printers are expected to be shipped to customers in 2020, as compared to 220,000 in 2015, 90% of which will be ordered by the lower end of the market as these products become more affordable for consumers. As the supply chain becomes shorter, the need for data security will only grow stronger.

There are between 80 to 90 million cybersecurity events every year, costing the global economy $575 billion annually and are the #1 source of economic attacks against governments and IP theft for corporations [2].

The rapid growth of cloud use is compounding this threat. Cloudlock estimates large organizations store upwards of 100,000 risky files in cloud apps that violate corporate data security policies, on average. And with an expected 50 billion devices connected to the internet by 2020, tracking those susceptible to threats becomes a major issue. This has led to several examples of high profile cyberattacks in recent years, including Home Depot, Target and an Equifax scandal still unfolding.

This significant threat creates an opportunity for the cybersecurity industry, set to be worth US$170 billion by 2020 1. Adding to the attractiveness of this industry is a business model positioned as a win-win for both these security providers and their clients. Companies employing such security intelligence technology are realizing a lower annualized cost of cybercrime, translating to an estimated return on investment of 21% [3].

The increased occurrence of cyber-theft is on a dangerous pace and getting worse as complexities arise. Through all this, AGF has you covered and is working diligently to invest in leading companies capable of fighting back against this growing risk.

[1] Bernstein, July 2016

[2] Bank of America Merrill Lynch, September 2015

[3] Ponemon Institute Research, Bank of America Merrill Lynch, September 2015

Commentaries contained herein are provided as a general source of information based on information available as of October 12, 2017 and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and the manager accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Investors are expected to obtain professional investment advice.

Published date: October 30, 2017