Industry View
13 CVSN INSIDER May 2009 Be Open To Change If we all had our own personal crystal balls that we could use to predict what was going to happen tomorrow, next month or next year, we most assuredly would take advantage of it. Economic theory says the best crystal ball we can use is the past. The factors that drive eco-nomic shifts can be seen in certain historical trends and knowing how to watch these trends can make all the difference in preparing your-self and your company for the future. One of the most interesting of these trends is something called the Power Wave Theory. A Power Wave is a shift or advancement in tech-nology that brings about major changes. There are three phases to a Power Wave. First comes the innovation process and creation of technol-ogy. Second is the spending and investment phase. Finally, we get the rapid growth wave, known as the Ah-ha phase. What happens is that a few innovative and pio-neering business people incorporate this new technology into their existing businesses. The new technology starts to penetrate the broader market, slowly at first, then more rapidly, un-til it reaches the critical mass, at which time people commonly say, Ah-ha, I need to figure out how to use this in my business. Those who dare are the ones who succeed. Those who don't fall by the wayside. Look back to the 1840's and 1850's. The development of the steam engine allowed industry to devel-op more rapidly. Now jump ahead 70 years to the 1920's and 1930's. Electricity, the Model-T, telephones and radio were all in their infancy. The Carnegies and Fords embraced these new technologies. Move ahead to the early 1990s. While the computer had been around for a while, it wasn't until the 1990s that personal computers started to flourish Phase I. Innovation fol-lowed within this new technology: Enhanced computer hardware and e-commerce Phase II. So here we are at Phase III. Are you saying Ah-ha yet? You should be! Your customers want what they want quickly, easily and inexpensively. Spending the right amount of time and re-sources now will give you advantages in the future that your competitors won't have. Set-ting up web sites, using technologies like supply chain management, vendor managed inventory and having computer-literate em-ployees managing your internal functions are things we didn't think of 10 years ago. Yet these are the things that make your business quick, simple and cost effective. Knowing when to do these things is the next critical point. Economic theory also tells us that birth rates drive economic growth. A book called The Great Boom Ahead, written by Harry S. Dent, gives great detail about how the theory works. Simply, individual spending tends to peak in the mid-to-late 40s. Aggregate spending should correlate with the size of the size of the mid-to-late 40 population. So given the enormous mass of baby boomers in their peak earning, spending and investing years, it follows that our economy is growing. The inevitable has to follow. The economy will plateau as the baby boomers age. There will be less spending, less purchasing less trans-Point Spring & Driveshaft Company Bill Ryan CEO INDUSTRY VIEW