Sidney Hill, Jr.: Economic storms slow investment, but not innovation

As I write this, the U.S. Congress is debating something called the Emergency Economic Stabilization Act of 2008. You may know it as the financial services industry bailout. Whatever it's called, the emergence of this legislation offered a rare opportunity to see clearly how what happens in Washington can affect our everyday lives.

10/01/2008


As I write this, the U.S. Congress is debating something called the Emergency Economic Stabilization Act of 2008. You may know it as the financial services industry bailout.

Whatever it's called, the emergence of this legislation offered a rare opportunity to see clearly how what happens in Washington can affect our everyday lives.

The breakdown of the financial services sector—the primary part of the economy that this act aims to stabilize—stems from large numbers of people being unable to make mortgage payments. It appears that many of those mortgages should not have been issued in the first place. What also has become obvious is that this situation is making it difficult—if not impossible—for both individuals and businesses to get new loans.

This fact resonated with me as I began reviewing pages for this issue of MBT, which focuses on emerging software vendors and technologies. The vendors highlighted in this issue are, for the most part, smaller companies that have unique products to offer—but lack the large customer bases of the huge enterprise software suppliers.

In the tech sector, companies typically rely on venture capitalists or other private sources of funding, rather than commercial banks. Still, when a credit crunch hits, it injures businesses of all sizes—and the smaller ones are hurt the most.

For the companies in our emerging vendors list, the blow can be twofold: These companies may have trouble getting the funds they need to continue developing their products, and they are likely to find many of their customers—which also are small and medium-size businesses—feeling the need to delay new software purchases.

There is a potential silver lining in this cloud for a number of our emerging vendors—those that offer their products in the Software-as-a-Service (SaaS) model, which greatly reduces the cost of both the initial system deployment and ongoing maintenance.

While it's not likely that the SaaS model alone will be enough to persuade large numbers of companies to adopt new software in the current economic climate, it is likely that the memories of this period will cause a lot of companies to look much closer at this model when the economy recovers and people are ready to resume software purchases.

This will indeed be good for a number of the companies on our emerging vendors list—companies like Plexus Systems, which offers a SaaS-based ERP suite; and New Momentum, with a SaaS-based product that helps manufacturers reduce myriad supply chain risk factors.

If you read our emerging vendors coverage, you will notice that the SaaS model is not the only innovation in the manufacturing software space. You'll learn about companies like River Logic, a newer vendor offering a solution with a new twist on supply chain optimization; and Zontec, an established vendor of statistical process control (SPC) software that now makes SPC results available through mobile devices like the iPhone.

This issue proves that innovation continues in all economic climates. Let's just hope that the Emergency Economic Stabilization Act of 2008 clears this current storm sooner rather than later.





No comments
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2015 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
Strategic outsourcing delivers efficiency; Sleeve bearing clearance; Causes of water hammer; Improve air quality; Maintenance safety; GAMS preview
World-class maintenance: The three keys to success - Deploy people, process and technology; 2016 Lubrication Guide; Why hydraulic systems get hot
Your leaks start here: Take a disciplined approach with your hydraulic system; U.S. presence at Hannover Messe a rousing success
Flexible offshore fire protection; Big Data's impact on operations; Bridging the skills gap; Identifying security risks
The digital oilfield: Utilizing Big Data can yield big savings; Virtualization a real solution; Tracking SIS performance
Getting to the bottom of subsea repairs: Older pipelines need more attention, and operators need a repair strategy; OTC preview; Offshore production difficult - and crucial
Applying network redundancy; Overcoming loop tuning challenges; PID control and networks
Putting COPS into context; Designing medium-voltage electrical systems; Planning and designing resilient, efficient data centers; The nine steps of designing generator fuel systems
Package boilers; Natural gas infrared heating; Thermal treasure; Standby generation; Natural gas supports green efforts

Annual Salary Survey

Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.

There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.

But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.

Read more: 2015 Salary Survey

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
This article collection contains several articles on the vital role that compressed air plays in manufacturing plants.
This article collection contains several articles on the Industrial Internet of Things (IIoT) and how it is transforming manufacturing.
This article collection contains several articles on strategic maintenance and understanding all the parts of your plant.
click me