Roundup From ECIA

Last week's Electronic Components Industry Association executive conference was one of the most informative in recent memory. All the presentations, including a mesmerizing one by the inventor Dean Kamen of DEKA Research and Development Corp., provided some takeaways for the electronics supply chain. I've picked out some items by Glenn Derene, senior technology editor for Popular Mechanics; Sheila Kloefkorn, president of KEO Marketing; and William A. Strauss, senior economist and economic adviser to the Federal Reserve Bank of Chicago, that I think will be helpful as the industry plans for 2012.

Glenn Derene on the cloud
Most people and businesses are already using the cloud, Derene says. Facebook, World of Warcraft, and Twitter are all cloud-based services. Still, the industry has a ways to go before it becomes comfortable with the cloud. For some of the downside, look no further than Facebook. Some classic examples of unresolved issues in the cloud include content licensing, privacy, and the need for yet more passwords.

One of the most compelling uses of the cloud is near-field communication (NFC) for cellphone-based buying. (See: Google & Vivotech Gear Up for NFC Rollout and Near Field Communication Serves Up Supply Chain Link.) NFC services, which use the cloud for data storage, use RFID technology for its “tap and pay” capability. This is one vehicle by which customer loyalty can be optimized — because you are always connected, your purchases can be aggregated by vendors, which can offer you preferred pricing. You can also aggregate coupons on your phone. “What you pay is flexible,” says Derene.

Sheila Kloefkorn on SEO
Supply chain companies can benefit from SEO in a fairly simple way, Kloefkorn said. Component data and specs are widely distributed by suppliers, distributors, and aggregators. By linking to key words and phrases in this data — even if your file is a PDF — individual companies can drive up their search engine results.

William A. Strauss on the economy
Strauss made a few interesting points that run contrary to conventional wisdom.

First, when adjusted for inflation, oil prices are well below where they were 30 years ago. Expenditures on energy are below the historical average. So oil is not as expensive as we think, and we seem to be doing a better job of using it.

Second, inflation isn't as bad as we think. If you remove the most volatile components from personal expenditures (food and energy), inflation has averaged 3.4 percent in 2011 and will drop to 2 percent in 2012.

Third, Europe can handle its economic crisis. The question is whether it wants to. Unlike the US, which is one big market, Europe still sees itself as a bunch of independent marketplaces. When US auto companies began to flounder two years ago, the government stepped in and bailed it out, and the auto industry has stabilized. The move was deemed good for the national interest. Germany stepping in to help Greece is different. Each country has its own national interests at stake. However, Strauss says he believes the situation will be resolved.

Strauss's summary:

The outlook is for the US economy to expand at a trend pace the second half of this year and next year.
Employment is expected to rise moderately this year and next, with the unemployment rate edging lower through 2012.
Slackness in the economy will lead to a relatively low inflation rate over the next 18 months.
Vehicle sales are anticipated to rise at a good pace.
Growth in manufacturing output will be solid in 2011 and 2012.

6 comments on “Roundup From ECIA

  1. Tim Votapka
    October 31, 2011

    Have been to several of these myself, so when a fellow editor uses the word mezmorizing, it must have been good. For me the best one that stands out was a NEDA conference some time ago that featured Commander James Lovell of Apollo 13 fame. His personal account of that mission was so engaging, you almost forgot to ask about the state of the electronics industry!

  2. Jay_Bond
    November 1, 2011

    Your summary seems to hit all of the right points from this conference. I also agree that while we are using many cloud based services currently, there are still some major flaws and it will take some time before many companies will mainstream. The analysis of the European debt crisis was dead on; Europe can easily do this, assuming they want to. This is a very different situation than what the U.S. was and is facing. 

    November 2, 2011

    How can Straus say ” If you remove the most volatile components from personal expenditures (food and energy)” when in many countries these are the biggest household expenses.

    November 2, 2011

    Sorry I just read the other posts and was reminded by Rich that Strauss is in fact a comedian.   That makes his comments more enjoyable and one should forget my last post.

  5. Barbara Jorgensen
    November 2, 2011

    Yikes. Sorry for any confusion on the speaker. This Strauss (William A.) is indeed from the Fed, and his cv lists numerous banking and economic venues. As to removing food and fuel from the PCE, the purpose was to identify the underlying trend in inflation. Becuase food and fuel are so volatile–look at what oil prices have been doing–removing them provides a baseline to measure inflation in what I think are refeered to as “durable goods.” I'm not sure if that is a standard practice, but it was helpful in understanding his point.

    As for the RHPS, the conference only provided M&Ms during the presentations and those were way to valuable to throw at anyone.


  6. Eldredge
    November 2, 2011

    Right. And at the same time, saying that, adjusted for inflation, energy cost is well below where it was 30 years ago? It is an unrealistic economic evaluation to eliminate energy and food from the analysis.

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