FabLabs’ Economic Models

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Typology

Isabelle Liotard:

"The interviews we conducted give us a better understanding of the FabLab environment, their diversity, and their different economic models, corroborating existing studies that state this reality. The report by Bottolier-Depois et al (2014) for the Ministry of the Economy, Industry and Digital Technology, based on a survey carried out in France and abroad, draws attention to a wide diversity in terms of legal frameworks10, the type of target public, the type of workshop and the mode of funding. Eychenne (2012) categorises FabLabs into three groups. According to the author, FabLabs are (i) educational, (ii) “private business”, or (iii) “general public pro/amateur”.


(i) Educational FabLabs are linked to higher education establishments, e.g. the University of Cergy’s FacLab (Nedjer-Guere & Gagnebien, 2015) or Rennes’ LabFab. The target public is mainly students but these sites also receive all types of public (e.g. young or retired people) during an open and free slot in the week (Open Labs). These sites have an MIT Charter reference.

(ii) “Private-business” FLs are spaces supporting the interests of the companies that set them up, whether well-established firms, start-ups or even self-employed entrepreneurs. Several companies have now opened their FabLabs internally, e.g. Renault’s Creative People Lab or EDF’s I2R. These company FLs (Lo, 2014) are based on the need to cultivate employees’ collective intelligence or collective innovation. In this type of space, only the company’s employees (and not the general public in the widest sense) are invited to collaborate amongst themselves and foster innovative potential with their ideas. In the rest of our study, we shall not take into consideration this type of site, being limited to the perimeter of the company. The aim of these initiatives is to stimulate exchanges between different members of staff and encourage creative approaches that will undoubtedly give rise to projects. These company FabLabs also contribute to the development of knowledge management and knowledge transfer between employees (Nonaka & Takeuchi, 1995).

(iii) “General Public and Pro/Amateur” type FabLabs are sites backed by governments, development institutes or local authorities and private financers. They are neither situated within universities nor companies. They are open to the local area for various users and are set up in the middle of cities to be as close as possible to its needs. They offer services that may be either free or fee-paying, following a hybrid economic model." (https://drive.google.com/file/d/0B6dbzKVh_GtpRnFreEhVajg4bWM/view)


Findings on the Economic Models of FabLabs in France

Isabelle Liotard:

"The diversity of FabLabs and their different characteristics help draw attention to the sites’ various economic models. Without an economic model, they cannot survive unless they receive permanent public funding.

The configurations we observed during our interviews point to two major possible models:

(i) the free, educational, MIT Charter FabLab;

(ii) the fee-paying FabLab, focused on start-ups, projects and training.

Nevertheless, certain FabLabs combine the two formats by setting up some services that are free (e.g. free Open Lab days to publicise the site) and some that charge fees (Eychenne, 2012).


Hybrid funding to set up sites

Our interviews show that spaces often combine their sources of income (public and private funding), thus corroborating the study conducted in 2014 by Bottollier-Depois et al. In the sample of respondents taken into account in this study, half had benefited from public subsidies and half had not. The majority of workshops had been funded by the founders’ own funds (53%). 47% of the workshops had received donations (from their close networks). 22% had received funds via crowdfunding, 18% had received funds from partner companies and 16% from investment funds.

The interviews we conducted drew attention to hybrid funding solutions among the various possible sources of funding. An interesting example is the Draft workshop in Paris. The two founders of the site (opened in 2014) obtained hybrid funding of 130,000 euros to set it up: own funds, classic bank loan, leasing for the machines, zero-interest loan and fundraising via KissKissBankBank (KKBB). ICI Montreuil, which opened in 2012, received very little public funding (5% from Montreuil’s local council) at the start of the project. Its founder contributed private funds to the tune of 20% of the total amount and the rest was covered by Love Money from large companies, banks and artists (including SG, Bouygues, Renault and Sony). A grant was also obtained by winning a contest via France Active.

For spaces that received public funding, the study conducted by Mérindol et al (2014) highlights the fact that the French Tech programme launched in 2013 to support France’s digital ecosystem enabled Usine IO, for example, to benefit from public funding. This FabLab, set up by three founders in 2014, provides an example of yet another combination using funding from an angel investor and large companies. FabLabs are set up with help from public authorities that guarantee their funding, especially at the start of the project. Nonetheless, the sites must plan how they will then sustain themselves and find their own means of funding. The University of Cergy’s FacLab set up a fee-paying University Diploma (3,000 euros per person) connected to a new profession (facilitator), the enrolments for which make up a large share of the site’s funding. It also received financial support from the Orange Foundation and appeals for donations via its website. Rennes’ LabFab, set up in 2012, received the backing of Rennes Métropole, which provided both financial and human resources. It also counts on developing MOOC and on partnerships for specific requirements (responding to calls for tender in collaboration with other FabLabs).


A differentiated public

The widespread view that FabLabs are open to anyone needs to be confronted with the reality of the facts. Although educational FabLabs have a genuine desire to be open to every category of the public, this is not the case for private structures. More specifically, the vocation of the former is to welcome a wide public (pupils, young people, students, retired people, job seekers, employees, etc.) so that they can discover digital manufacturing, try out machines, exchange knowledge, even tinker/hack, and to allow people changing careers to regain their self-confidence. This type of site therefore assumes an educational and social dimension. It creates a bridge between the world of digital manufacturing and the general public, offering training sessions given by members of the FabLab’s team or by people using the site. In this way it forges bonds and fosters exchange. Users are thus users of the site but also occasionally its trainers. Giving one’s time, running a workshop, contributing to a training course, and helping assemble a machine are a few examples of tasks that a FabLab contributor is likely to carry out in exchange for using the site. The aim of the space is to create connections by enabling people to meet, transmit their knowledge, and come together to work on projects (to design, make and learn collectively, as the FabLab announces). Open Lab slots are scheduled so that anyone can come and experiment with digital manufacturing.

The vocation of the second category of FabLabs (fee-paying, with a specific public), on the other hand, is to run a workshop for projects to create start-ups and companies, and providing training opportunities.


As soon as membership is payable rather than free (there are menus of fees depending on the type of services on offer), these sites are not open to a wide public but to:

(i) people wishing to develop their idea and prototype it;

(ii) artisans and artists wishing to use the equipment and exchange with people from other professions to enrich their projects;

(iii) freelance professionals (e.g. designers and architects); and

(iv) employees of large companies coming to train in digital manufacturing and possibly produce limited series of objects. Usine IO hosts 300 projects a year: 70% are startups, 20% are collaborators from large corporations and 10% are independent users (designers, architects, students, etc.). Collaborators from large corporations come to develop their projects and prototype them. At ICI Montreuil, there are 63 skills (craftsmanship, design, etc.) and approximately 150 residents, spread over a space of 1800 m2. EdFab, set up by the competitiveness cluster Cap Digital, opened its doors in March 2017. Located in La Plaine Saint Denis in MSH Paris Nord premises, EdFab’s mission is to host companies (large and small, as well as start-ups) and other professionals (schools, etc.).


Fee-paying services central to the business model v. raised awareness of local needs

Educational spaces such as the FacLab or LabFab do not ask for a membership fee from participants, or only a symbolic sum. Cergy’s FacLab asks a €5 enrolment fee, for example. This approach squares with the desire to be an accessible space for as many people as possible, including schoolchildren. Supported by public funding, these sites nevertheless have also found a sustainable business model by means of associated fee-paying diplomas (see above) and projects set up with local actors such as city councils (introduction to digital manufacturing for schoolchildren, etc.). These sites can also act as the interface between external requests for services and FabLab participants. The space works as a go-between for a request (company, public stakeholder, etc.) and the skills of its contributors. The contributor is remunerated and the site takes a commission from the sum paid by the buyer.

Private spaces offer equipment rental, the possibility of privatising the space and production on demand, a range of services (in response to requests from companies for training or production: Draft, ICI Montreuil), co-working space, etc. They offer training sessions and courses. Assistance may be given to advise companies for prototyping, or to provide support for incubator projects or respond to national or international calls for tender. All these services are fee-paying and can be found on the FabLab website’s price list. These sites thus assume an economic dimension and are developed according to well-defined business models that help ensure their sustainability. In addition to standard training to teach people to use digitally-controlled equipment, other very “business-focused” training may be offered (how to draw up a business plan, setting up public relations, how to carry out a digital project, design thinking, etc.) as is the case at ICI Montreuil and EdFab. These training courses are offered either by FabLab staff and residents depending on their skills and knowledge (ICI Montreuil12) or partly by external trainers (Draft, Usine IO). Some FabLabs even play the role of incubator and provide specialised support for people with projects, as illustrated by the case of Usine IO. The stated objective is to support the transition from the idea through to its industrialisation and accelerata project hardware13 and offer contacts with manufacturers who may be interested in the project. This expertise raised 40 million euros in 2016. Other fee- paying services supplement the business model, such as leasing co-working space, leasing rooms, providing contacts with the network of FabLab manufacturers, etc. Draft offers training in digital manufacturing for employees of large companies who wish to create small series for marketing or promotions, depending on the needs of their structure. EdFab has a dual objective: (i) to offer advice and support to people with projects from the training and education sector. EdFab supplies the site, equipment (two 3D printers and a laser cutting machine, command post for modelling software), training, and the opportunity to benefit from a panel of testers for prototypes; (ii) to act as the interface between companies requesting training for their employees and suitable service providers (from the centre’s network of 1,400 members).


Partnerships and projects

Rennes’ LabFab team is at the cutting edge for setting up MOOC for digital manufacturing. There are currently around 36,000 people enrolled throughout the world for these training courses, with a completion rate of 16%. The lab also works in partnership with ICI Montreuil and the Petit FabLab de Paris (following a call for projects from the Paris Region and the City of Paris) to devise professional training sessions (in partnership with Pôle Emploi). For 5 months, partly classroom-based and partly distance learning (MOOC), people will be able to train in different fields (maker entrepreneur, embedded computer coding, modelling, electronics, how to use equipment, connected devices, etc.) with the possibility of specialising afterwards.

ICI Montreuil also helps other partners, e.g. Cap Digital for training courses, or Usine IO.


Specific structures

FabLabs are of different sizes and thus require different organisational structures. Spaces such as the FacLab Draft are small spaces in which the founders, the FabManagers, play a major role in the system and have a small permanent team (reception, training, contact with external stakeholders etc.). Larger FabLabs (Usine IO or ICI Montreuil) have larger teams and have institutionalised certain practices. At Usine IO (16 permanent staff and 8 experts), the post of expert was created (they can be identified on site by their orange jackets) to provide support for people with projects so that they can benefit from the experience gained by the experts in the past when they themselves created start-ups or carried out projects.

The structure of each site is based on a certain number of rules to be respected, whatever the size of the FabLab. There are “hard” rules and soft ones. Safety regulations are indispensable when using potentially dangerous equipment such as laser cutters, milling machines and 3D printers. When receiving a new person, the FabManager checks his/her competence to use the machines and may even ask for a level of certification (for very specific machines at ICI Montreuil e.g. when working with steel). Training sessions are offered at this stage. After this, organising safety regulations can be left to each FabLab workshop to define. For example, ICI Montreuil’s wood and steel workshops are in charge of their own safety measures and manage this in accordance with the principle of trust. People who work there take responsibility for keeping a well-meaning but watchful eye on the correct running of the workshop. In addition, other types of regulations (hours, use of space, use of equipment, tidying up, etc.) complete the organisational structure." (https://drive.google.com/file/d/0B6dbzKVh_GtpRnFreEhVajg4bWM/view)