Jan. 30, 2009 — From the opening moments of the Photonics West event “Executive Panel on World of Photonics: Business Issues from the Executives’ Perspectives,” it was clear that not all is doom and gloom. Asked about bright spots in the industry, the panelists ticked off the market segments that will likely continue to do well: green technologies – especially solar – medical and biotech applications, and miniaturization, demand for which will probably continue as products grow ever more compact.
One of the executives added that the new administration in the White House recognizes that, to remain competitive, the US must make investments in fundamental research. And this can only be good news for those in the optics and photonics game.
Of course, the views aren’t spectacular from everywhere in the industry. Semiconductor business is “way, way down, the only truly dark spot today.” Even some corners of the health care sector are having trouble. Manufacturers of large MRI, CT and PET scanners are running into trouble as reimbursements to clinician-run imaging centers (as opposed to hospitals) have been curtailed, resulting in fewer sales to these centers.
From an R&D perspective, the upheavals of the past year might ultimately prove transformative and even fruitful. In response to the “bright spots” question, one of the panelists recalled a recent interview with Warren Buffett in which the financial giant noted that, five or 10 years from now, the current economic crisis will likely be viewed as the disaster that gave birth to the greatest period of innovation in our lifetimes.
The other panelists agreed that we are already seeing a significant amount of innovation in the photonics industry as companies scramble to hold on to market share and penetrate new markets. “People here [at Photonics West] are talking about new projects and new ideas,” one said. Another added that he has seen as much or even more innovation at the 2009 show than in the past several years.
The economic turmoil might force companies to be creative not only with the technology they develop but also in the ways they conduct business. One of the panelists recommended that businesses be more open to collaborations with other companies, for example, to facilitate sharing of resources.
The discussion later turned to whether now is a good or bad time to launch a company in the optics and photonics industry. “It goes back to the innovation cycle,” one of the panelists explained. “Today can be as good as any to start a business.” He added the obvious caveat: Obtaining financing is currently very difficult, if not impossible. We saw very few, if any, venture capital deals in the last quarter, and the banks simply are not lending money.
Still, if would-be entrepreneurs have the money, now can be a great time to start a business – at least in terms of capital expenditures. “All of the resources are marked down,” another of the executives explained. Attorneys and machine shops are offering services at significantly discounted prices, for example, and equipment can be bought for a fraction of the usual cost.