JimPinto.com - Connections for Growth & Success™
No. 223 : 8 January 2007


Keeping an eye on technology futures.
Business commentary - no hidden agendas.
New attitudes, no platitudes.

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Top-50 automation companies

Each year, CONTROL magazine has been publishing a list of the top industrial automation companies. In past years the rankings have been skewed with inadequate definitions and faulty information. This year it's good to note that the list has been cleaned up with the help of ARC, the leading automation research company.

Many people think of "industrial automation" as a market. In reality, it's a fragmented collection of markets (plural) loosely linked under the "industrial" category. Control magazine's lengthy selection criteria illustrates the complexity and fragmentation - the list of what has been included and omitted is itself quite lengthy and complex. Marketing professionals would do well to review not just the list, but the criteria.

CONTROL has ranked the list based on N. American revenue. Emerson and Rockwell are at the top, though clearly their world rank is behind Siemens and ABB, ranked #5 and # 3 respectively for N. America. Honeywell ranks #4 in N. America, but is behind Schneider worldwide. Invensys is at #6 for N. America, and #7 worldwide. GE is #8, both for N. America and worldwide.

The Japanese are way down the list for N. America - Yokogawa at #20 and Omron #18. Worldwide, Omron is ahead of Invensys, and Yokogawa just behind. One wonders how Yokogawa's #8 world ranking will affect their commitment to be the process control leader by 2010; perhaps they'll simply shift the definitions to accommodate the result.

Some surprises as you go down the list. Phoenix Contact has pulled way ahead of Weidmuller; they were close a decade ago. National Instruments in #16; OSIsoft # 27; MTL # 29; Matrikon #43; OPTO-22 got an honorable mention at #57 (off the top-50 list).

CONTROL admits that they have found it "nearly impossible" to achieve a hard number for "process automation" only, so they're reporting all automation, and they're showing numbers where they have a good idea of the ratio between "process" and "discrete". The numbers are still skewed, apparently not including "instrumentation" in the mix. The data is for 2005, as 2006 numbers are not yet available for many companies.

With the uncertain definitions, this review exercise is only a litmus test of leadership. This is the ONLY published ranking, and clearly everyone will be studying the list. Schneider, the aggressive French giant, will simply accelerate its worldwide acquisition program as it climbs towards coveted world leadership.

Click CONTROL - 50 automation companies worth watching

Click Jim Pinto's "Urge to Merge : 2000" - the top-10 list 6 years ago

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2006 Technology advances

In the global mix of a new century, arguably one of the most important life-changing factors is accelerating technology. Throughout the world scientists, researchers and developers are continuing to push the envelope in all arenas - communications bandwidth, biotech, genetics engineering, nanotechnology.

We see some of the changes on the surface - more people carrying ever smaller cellphones and complex gadgetry with continually increasing functionality. But, beyond these visible changes lay significant and sinister shifts. The awesome power of technology is available not only to advanced nations and giant corporations, but to ordinary people and terrorists alike. As the years click forward, more key technology benchmarks are being achieved and quickly pass into the past, leaving behind a new reality.

To help you to keep pace with this ever accelerating technology scenario, I've provided selected technology links.

Click Popular Mechanics - 10 Tech Concepts You Need to Know for 2007

Click The Year in Nanotech - Dazzling displays, handheld sensors, cancer killers, nanotube computers

Click Year's most significant advances in information technology

Click The year in Energy - Biowaste to fuels, plug-in cars, lithium-ion batteries, cheap solar energy

Click The Year in Biotech - Brain Chips, Gene Chips, Magical Pills, and Stem-Cell Cures

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Automation World Innovation Series

At the suggestion of Gary Mintchell, the talented and insightful editor of Automation World magazine, I researched the process and art of innovation in the modern context. My series of articles on the subject may interest you.

Creativity is developing new ideas. Innovation is implementing creative ideas into valuable or profitable solutions. Innovation happens when organizations make money or gain value from creativity. Effective innovation is the timely and efficient implementation of new ideas that can result in significantly increased revenues and profits. What is your company doing to stimulate innovation?

In the past, innovation has been viewed as a creative process that leaps from the minds of a few imaginative people. But in today's global business environment, innovation must be developed as a reliable, measurable process that yields consistent, positive results.

As the global innovation center-of-gravity shifts, the long-term economic implications are enormous. Looking back, the last major innovations in industrial automation were in the mid-'70s - DCS and PLC. Will wireless be the next big innovation breakthrough?

Products are becoming commodities in the fast-moving new global business environment. To succeed, businesses need a competitive differentiator a proprietary edge which can only be developed through innovation, knowledge and experience.

Click The Pursuit Of Innovation

Click Organizing an Innovative Company

Click Wireless: The Next Innovation Breakthrough?

Click Automation Knowledge & Innovation

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Global warming & dimming

I just watched the new DVD "An Inconvenient Truth", the articulate and enlightening communication on Global Warming by Al Gore. He starts with the comment that he "used to be the next President of the US".

The experts all agree that global warming is indeed occurring, though they are divided on just how much of it is being caused by humans. In any case, whether mankind is to blame or not, there is a definite trend and it behooves us to use our resources to find out what we can do about it.

Al Gore pointed out a key point: relative to it's size, Earth's atmosphere is about as thick as a coat of varnish on a sphere. We are affecting that thin layer and in some areas we are destroying it. Clearly humans are causing significant changes on the planet.

A related problem that's getting very little attention is "Global Dimming". Along with invisible emissions, there are many visible particles such as soot and ash that cause a haze which reflects the sun's energy. While the increased level of green house gases in the atmosphere is slowly warming the earth, the decrease in energy from the sun is acting to cool the planet, offsetting the effects. But this is NOT good; the bottom line is: humanity IS having a definite affect on the environment.

The world is about to experience a shift unlike anything ever seen before. Humanity must act now on climate change or face devastating economic consequences. Some estimate that at most we have about 10 years before the shift is unrecoverable.

Click BBC - Global dimming

Click PBS - The Contrail Effect

Click Why the Sun seems to be 'dimming':

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2007 view of the future

Another year has ticked off on the calendar of the new century. More than ever before there are new opportunities, challenges, dangers and possibilities. Already, in the first decade, the world is undergoing an epochal shift to a new era.

Demographics:

    Nearly 50% of the global population is under the age of 25 - the largest youth generation in history. The overwhelming majority of these young people live in the developing world. Most of them know about the quality of life in the West and most have seen and used computers and cellphones.
Global Oil Supply:
    Demand for oil is growing - from 79.8 million barrels per day (mbpd) in 2003 to 84.3 mbpd in 2005, with China and India accelerating. Supply has already peaked - world oil production has stalled at about 84 mbpd, while demand has already exceeded that. Up to now, oil importers used mostly economic and political means to compete for oil, but countries will inevitably resort to military strategies soon. Indeed, many think that Oil is the primary reason for US involvement in Iraq. Finding new energy resources is an imperative.
Species Extinction:
    Humans continue to destroy other species at an alarming rate, rivaling the great extinctions of the geologic past. We are beginning to disrupt the vital functioning of ecosystems on which all life depends. The speed of species extinction has forced scientists to refer to the current era as the sixth extinction event, comparable only to five other events in the past billions of years. Most researchers say it is not too late to reverse the trend - but will humanity heed the warnings?
Climate Change:
    Earth is already as warm as at any time in the last 10,000 years, and is within 1C of being its hottest for a million years. Another decade of business-as-usual carbon emissions will probably make it too late to prevent northern ecosystems from triggering runaway climate change. Global warming may soon become a "runaway train".
Economic Disruption:
    During 2003-4, for fear of "deflation" the US Federal Reserve reduced interest rates so low (1%) that mortgage lenders began offering below-prime mortgages with little or no money down, and refinancing of existing mortgages sky-rocketed. Many loans had extra-low payments in early years with a substantial increase after the "balloon" period. We should see a dramatic increase in mortgage defaults starting in 2007. This will be a major threat to the solvency of many banks. Unless drastically changed, the current world financial system will soon hit crisis-level.
Biotech & Genetic Engineering:
    Livestock cloning is common and the US FDA says cloned animal meat and foods are safe. How long before human clones and genetically engineered human babies become common? What are the social and societal impacts?
The "perfect storm":
    The breakdowns in multiple sectors will be exacerbated by increasingly sophisticated terrorism, serious global shortages of drinking water, growing population pressures, and the possibility of other shocks. The convergence of climate, oil and financial trends alone could produce a confluence of crises - a "perfect storm" - that will change the future of humanity on this planet.
Humans are resourceful and even with accelerated change, new systems and technology will inevitably be developed to bypass the frailties of the old world. The new world will be highly interdependent and connected. The complexity of our present communications systems link individuals in ways that would have seemed impossible just a couple of decades ago. As the ability to interact in increasingly more sophisticated ways develops, humanity will begin to act more like an organism, rather than unrelated individuals and nationalistic groups. Concepts and perspectives will infect the "global brain" and produce behavior never before seen. We will rapidly become citizens of this planet, and ecological interconnectedness will rapidly become obvious.

This futures discussion summarizes some of the recent writings of John Petersen, president and founder of The Arlington Institute. John is the author of two acclaimed books about the future and has also authored "The Road to 2012: Looking Toward the Next Two Decades", a book-length report used at the highest levels of American government as a basis for strategic planning.

Click Visit The Arlington Institute

Click View from the future

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eFeedback

Ron Bengtson [Ron@AmericanEnergyIndependence.com] comments on America's gradually developed oil addiction, and recommends higher taxes to help develop solutions:
    "We humans are designed to adapt to incremental changes in our environment (an ability that is biologically inherent). It is amazing what we can learn to tolerate.

    "Our acceptance of the pain at the gas pump is similar to our acceptance of housing prices. (A $300,000 house is an incredible bargain in California today, yet wages and salary increments have barely changed since the time when houses were under $50,000). This psychology of adaptation helps humans (and animals) survive in a changing environment. But, predatory capitalism (and its political pawns) knows how to exploit this natural willingness to 'forget' the past and accept present conditions (reality).

    "We need leaders that are willing to give a 'wake-up' call to everyone who has 'adapted' and accepted higher gas prices. Sure, the Europeans are paying more than twice what we pay, but more than 50% of the price of gas in Europe goes directly into public funds to pay for things that benefit the people. In the USA, high gas prices drain the local economy, giving nothing back.

    "Today, Americans are willing to pay $2.50 per gallon, but refused to pay $1.50 when gas prices were at 50 cents per gallon. If we had allowed a .00 gas tax years ago, we might be paying $3.00 a gallon today, but the extra $1.00 would still be part of the price.

    "Think about this: 140 billion gallons of gasoline are sold in the USA every year. A $1 gas tax would produce $140 billion in tax revenue to spend on the development of alternative fuels.

    "It would take a real leader to convince people to 'adapt' to pain that is good for the country."

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Neil Brown [neil.brown@rtel.com] on pricing of industrial products and systems:

    "I liked (and mostly agree with) your piece on wireless automation products, especially the pricing bit.

    "A few years ago I presented a series of talks about how 3rd generation process control systems - led by Emerson's Delta V - would sweep away the 2nd generation dinosaurs, leaving them in a price vs. performance dead end. My opener was to ask the audience: If computer memory cost as much then (1999/2000) as it had 25 years before (1974) how much would the memory in the laptop I was using to show my Powerpoint presentation be worth? The answer (roughly) is $500M. Do the math - 100 Mbytes of core-memory vs. today's RAM.

    "The reason for this is the cost/volume relationship of digital devices. For digital devices, when the sales volume increases by a factor of 10, the price falls by a factor of 4. Look back at recent consumer products and you'll see this is close to the truth (e.g., LCD televisions, digital cameras, DVD players, recorders.

    "Much of the cost of a digital device is the development, design and testing and then the tooling up; once volume production is under way, the marginal cost of unit production is low. Further, the proportion of total cost of many products represented by software is rising steadily, and software has virtually zero marginal cost of manufacture.

    "I can buy a sophisticated digital wireless device (wireless router) for about $50 in the US. OK, an expensive pressure transmitter, say, has more mechanical parts and assembly operations, and needs calibration, testing etc, but the huge price discrepancy can't continue. 'Nichts dauert fur immer' (nothing lasts for ever) - was spray-painted on the Berlin Wall the night it was torn down!"

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My recent article "America needs leaders - now!" resonated with Howard Bales [heybales@gmail.com]:

    "I enjoyed the thread of your recent commentary. I am a public transit advocate, so I was happy to see it get a mention. Public transit impacts your other comments on poverty and oil addiction. Wouldn't it be cool if the man you overheard saying he'd left his family money for food and gasoline said, 'Honey, I've left you money for food and train tickets.' ?

    "Concerning leadership, I wanted to point you to three websites that I have recently been exploring. One is www.worldchanging.com which is working to improve the connectedness of progressive strategies and solutions to problems. The second is www.zaadz.com which is more of a personal growth community leveraging the connected power of personal development. And the third is www.integralinstitute.org which promotes a very powerful paradigm for addressing business, political and personal growth.

    "Together, I see these sites as an emerging energy that will empower the middle class to insert more control over our world. It is the middle class who will solve the issues of poverty and therefore terrorism. The middle class is a lot more connected to the issues of poverty. They can see it in their neighborhoods and families. Imagine if the middle class decided to give micro-loans instead of upgrading to Vista.

    "You mentioned the tipping point of wireless automation. Here's to the tipping point of the empowerment of the middle class as the future leaders of America and the world."

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