Recession or Reorganization? A Boom For Tech?

Around the world we are strapped with a financial situation. We have lived beyond our means overextended in credit – pay now worry later. We see traditional businesses suffering, Auto makers screaming for help.

Is it that people are not spending money any more or that business has undergone its most radical shift in years? Lets take the auto manufacturers for example. The automobile is essentially the same today as it was when it was invented. LIttle innovation has been made to shift us away from the fossil fuel burning model.

When we suffered our multiple oil shortages and price rigging auto manufacturers did the minimal amount of work to reduce our dependence of fossil fuel. Sure, they have produced token cars that are hybrid but the innovation is stalled.

People around the world have decided it is too expensive to possess an automobile and now automakers are looking for bailouts. Will this help the automakers? Doubt it.

Tech however is recession proof, people are always innovating. Its in the human DNA. To solve this oil dependence problem new technologies must be developed to more efficiently burn fuel or come up with alternative options.

Lets move beyond the car. People are unwilling to pay a premium for gadgets anymore. A $5,000 flat screen TV is out of the question but with R&D prices have plummeted. My TV that cost $2,500 a year ago costs only $1,200 today. DVD players can be bought for $20, BluRay Players for $150. Lets look in the mobile space, manufacturers are driving prices down. $200 for an iPhone rather then $500 a year ago. Blackberries for free. Don’t tell me that people will all of the sudden stop using a cell phone. Software is no longer $500, developers are coming out with cheaper more frequent updates. Its a price correction in full effect. Sure legacy businesses and products will suffer in the short term but adaption and investment in R&D tech will allow products and brands to evolve to the new tastes of the consumer. Gone are the days of fat profits and wasteful products. Companies that are lean and focus on highly refined desirable products will succeeded. Those who resist the trend will fail.