Latest from Community & Opinions

Engines of Change

Jan. 1, 2003
'Tis the season to make predictions, and EW offers a few ideas on what may--or may not--happen in the next decade.Forecasting the future in this fast-changing

'Tis the season to make predictions, and EW offers a few ideas on what may--or may not--happen in the next decade.

Forecasting the future in this fast-changing industry is a tricky business. You have to do so with the mindset of a stock analyst forecasting Wall Street's next move, and with a mantra in mind not unlike the investment community's well-worn adage: "Past performance is not necessarily indicative of future growth."

Even with that caveat, this is truly a fascinating time to evaluate the engines of change within our own industry, the broader business world and in society that will have the most impact in the future. Let's take a look at three trends with a ton of potential.

The graying of the U.S. population touches the electrical industry in unforeseen ways. Many distributors who started their businesses are near or at retirement age, and if they don't have any family in the business willing or capable of taking it over, a sale is often in the cards.

And as you will see in "ElectroForecast 2000" in this month's issue (page 26), there's another key demographic trend now in play. The Baby Boom generation has a lot of impact on the electrical market in ways that aren't always immediately apparent. As the biggest single population group passes through their prime child-bearing years and start quietly taking advantage of their AARP discounts, their needs as parents and consumers change. The electrical market feels their aches, pains and consumer urges.

For instance, a key concern of many Boomers was once moving to communities offering the best public schools--creating an enormous boom in school construction. But now they are focusing their attention on things like new vacation homes, empty-nest homes, or assisted-living communities, now for their parents, and down the road for themselves. Look for growth in this construction in the near future.

And if you don't think auto companies that produce red sports cars and motorcycle manufacturers that crank out road bikes aren't tuned into the mid-life crises of the Boomers, guess again. Increased market demand for these products from an enormous demographic equals a need for more factories to meet that need-and for the electrical products and systems that power these buildings.

A backlash against e-commerce slows its growth. Web heads and other technology enthusiasts sometimes forget that just because something is doable doesn't mean customers really want it. Online purchasing and other tools of e-commerce must make life easier for customers to explode the way their proponents expect.

It will be particularly interesting to follow fortunes of online purchasing. It's destined to become a purchasing option that virtually all companies will offer, but it will be years before 50% of the electrical wholesaling industry's total sales move online. Don't be surprised if 1999's enthusiasm for online purchasing dies down if customers' negative experiences with it outweigh the positive.

The demand for low-voltage wiring in the home grows faster than anyone expects. The home is fast becoming a hotbed for new low-voltage wiring after a few false starts. Consumers weren't wowed by the silly automated tricks that Smart House could perform. But the demand for networked computers, home-office equipment and a fiber-optic pipe pumping in warp-speed Internet access, a gazillion television channels, pay-for-view videos and a host of other entertainment, shopping and banking options is the real deal.

I hope you enjoyed our picks for the trends that may pack the most punch. Tune in next month for a few more.