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Upsides Of A Downturn

Mark Mayfield, AV Technology, 14th May, 2009

The new millennium is just now getting underway, nine years later. Besides the obvious and most recent big change (our new president), the current world economic crisis is a catalyst of major and fundamental change that seems to be affecting all industries — including ours.

One pervasive shift is the concept that “less is more.” This is often, but not always, a good thing — like in the case of American workers. Boards of directors seem convinced that fewer employees means more financial stability, but we all know it doesn’t always work out that way in the long run.

But when there’s just plain too much of any one thing, some “culling of the herd” can be healthy. Social psychologists have studied the phenomenon of excessive choice on buying behavior. In professional journals like the Journal of Personality and Social Psychology and the Journal of Consumer Research, researchers consistently come to the same conclusion: the more choice, the less buying.

The same is true in the technology industry. Do we really need 12 new models of video projectors every month? And how many “new” loudspeakers do we need? Or have your tried to buy a wireless router recently? For fun, visit Best Buy and ask the salesperson to explain the differences between a, b, g, and n wireless products. There’s too much choice, and it changes too quickly.

So in this new millennium we are finally paying the price, and it can be a little painful. Perhaps it’s “Darwinian economics” — but when we come out of this, we’ll have a more streamlined economy that’s more geared to what we need, than what marketers want us to need.

We’re seeing signs of this retooling effort already. Major industries are reinventing themselves, some with significant government oversight (that’s putting it mildly), and some because they are seeing the future. One example is the flat panel display industry. Already, companies like Pioneer and Vizio have announced they are discontinuing plasma display manufacturing in favor of LCD, which already outsells plasma 7:1 according to analyst firm Display Search. Now, this same firm has noted what could be yet another shift for LCD manufacturers — away from flat panel technology altogether and toward photo-voltaic (PV) technologies. There are technical similarities, and certainly the demand for solar power products looks to be a major growth industry.

Is this a bad sign for AV/IT technologies? On the contrary, it’s a very positive sign when major industries can reinvent themselves to focus on what will be important in the future. Certainly, more variants of already-commoditized technologies are not what we need. But truly innovative AV/IT technologies that allow demonstrably better communication with less environmental impact will continue to flourish — at least for the next millennium. Link to Article