Don’t be gloomy because innovation loves a crisis. Jonathan Schwartz of Sun emailed his company pointing out that now was the time to go on the offensive. The necessities enforced by the credit crunch will be the mother of invention. To save money, companies will be forced to automate, innovate and think about how they sell in order to make that profit. Less capital means fewer customers means greater competition.
You’re not going to hear from any of our customers, “let’s stop buying technology and hire more people to do the work.” They’re going to default to the opposite – automating work, and finding answers and opportunities with technology, not headcount. And in that process lies an opportunity for Sun – to engage with customers in driving down cost, driving up utilization, and driving the changes that yield immediate and long term benefit. The right question for every customer you meet is – “how can I help?” I assure you, they’ll have ideas for us. And we have no shortage of ideas for them. Personally, I’m reaching out to customers and partners just to check in and offer help – I’d recommend you do the same.
At the end of the day, the public debates may not really matter. They are there for politicians and economists to weave a myth of control and pretend that they steer our lives, using our money to justify their drivel.
It is the private debates amongst companies, venture capitalists and entrepreneurs that really matter. With less money to go around, there is a strong incentive to accelerate change and adopt business models that profit from the information revolution rather than kick against it. As an example, the mainstream media may enter its death rattle as consumers shift towards online business, because it is cheaper, better and quicker.
The downside is that a general downturn may cause research programmes which do not have an immediate or predictable return to falter, as sources of capital dry up. Therefore, the immediate consequences of this crisis could be an acceleration of information technology permeating everyday lives but a longer curve for the development of nanotechnology, stem cell research, robotics and other technologies.
Blimey! Are Sun Systems still around?
The last time I worked with any of their stuff they had a well deserved reputation for massive unwarranted complexity. It seemed that almost every box they shipped had it’s own hardware spec and every piece of software they issued had a differnet release number. Often something like 6.2.11.4.10-4-95.
What you got when you bought Sun, (and a lot of the high-end US systems manufacturers), was an expensive system with a massive support contract and the necessity for a large in-house tech support team.
I suppose Mr. Schwarz is right in his assumptions, but when you’re looking for technology to reduce manpower in the current climate I reckon firms will be after cheap and easy to maintain.
I’m not sure, but this doesn’t sound right to me. A recession is not a shortage of enough cash with which to meet a strong demand, it’s a shortage of demand. In a recession, nobody is buying. There’s no business. And as a rule, people only invest in automation when there’s increased demand and the consequent price rises have provided the money for investment in increasing production capability. The point of automation being an investment is that it costs a lot of money up front, but lets you make more and cheaper in the long run. If you could do it to make more profit without a huge up-front investment, they’d have already done it. And also, because they’ve now got too many staff for the work available, wages drop and people get cheaper. The economic balance shifts towards manpower over automation.
A recession results in quite the opposite effect to that suggested. There’s no work, there’s no spare money, labour is cheap, costs are reduced by laying off the minimum number of people you can get away with and not replacing them with machinery, and investment for the future is put on hold.
It’s only in the recovery after the bust that innovation gets its chance, when the growth of demand faster than supply fuels investment. But that’s a year or more away.
I don’t know. Maybe they’re just trying to talk up some business, or maybe they really do have something in mind. IT doesn’t work quite the same as heavy industrial manufacturing, say. But it sounds like tosh to me.
However higher taxes (those direct and a billions of indirect ones), red tape, an atmosphere of irrational hostility towards enterpreunal people can create powerful barriers to inventiveness. Just remember how it was funcioning in COMMUNISM. Almost all current problems derive from the excess of SOCIALISM that has poisoned our so called “democratic life” and yet the confused people are going to vote for even more socialism to fix them. It is like trying to cure a syphilitic by infecting him with a gonorrhea. It seems that we are losing our collective mind; isn’t it a sign that (according to the Bible) the ARMAGEDDON is approaching?