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.


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.

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.
Each year, a panel of Control Engineering and Plant Engineering editors and industry expert judges select the System Integrator of the Year Award winners in three categories.
Pipe fabrication and IIoT; 2017 Product of the Year finalists
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A new approach to the Skills Gap; Community colleges may hold the key for manufacturing; 2017 Engineering Leaders Under 40
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The cloud, mobility, and remote operations; SCADA and contextual mobility; Custom UPS empowering a secure pipeline
Infrastructure for natural gas expansion; Artificial lift methods; Disruptive technology and fugitive gas emissions
Power system design for high-performance buildings; mitigating arc flash hazards
VFDs improving motion control applications; Powering automation and IIoT wirelessly; Connecting the dots
Natural gas engines; New applications for fuel cells; Large engines become more efficient; Extending boiler life

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

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