Innovative Solutions _______ January 2007
In this issue
-- Feature Article: The Changing Global Competitiveness Landscape
-- Engineering Tip: Top 5 Engineering Hints You'll Rarely Hear
-- On A Personal Note: Think Long Term on Energy
-- On A Lighter Note: A Compliment for Microsoft
-- Article Policy

Welcome to the January 2007 edition of Innovative Solutions, the monthly newsletter from Innovative Thermal Solutions. If you find this information interesting or useful, please share it with your friends and colleagues.

Word count approx. 850
Reading time approx. 3-4 minutes.

Feature Article: The Changing Global Competitiveness Landscape
Last month I discussed some highlights from a report released by the Council on Competitiveness on Nov.14, 2006 titled Competitiveness Index: Where America Stands. This month I will discuss some more of the findings from the report. I think it is vitally important to understand these macro trends and how they will impact our businesses and the products we develop.

Emerging markets are rapidly growing their economies, exports and share of global investment. Over the past two decades, the global economy has changed dramatically. In the mid-1980s, China, India and the Soviet Union were all planned economies closed off to most international trade. Today they are major exporters and recipients of foreign direct investment. These three economies, together with other fast-growing emerging economies primarily in Asia and Latin America, have rapidly come to play a critical role in the global economy. In the past five years these countries have averaged almost 7 percent annual growth compared with just 2.3 percent average growth in developed economies. These economies not only present serious competition to us, but also a tremendous opportunity to expand the markets for our products.

Emerging markets already have the largest, fastest growing population. While the US population recently passed 300 million, China now has 1.3 billion and India 1.1 billion citizens. And most emerging economies are projected to grow rapidly while all of the largest developed economies (apart from the United States) are projected to see their populations shrink due to aging and low birth rates. China’s population is not projected to peak until 2032. Fast-growing populations mean that per capita income will grow slowly, despite rapid growth in output. Even with 50 years of 7.5 percent growth, China’s per capita GDP will still be less than that of the United States today. But the sheer size of many emerging economies means that many are already important consumer markets and their growth potential is significantly larger than that of the developed economies. In 2005 there were just over 1.3 billion middle income consumers worldwide. According to projections by A.T. Kearney, by 2020 the number will rise to 2.3 billion. The industrialized world will add about 100 million new consumers, while the developing world will add over 900 million new consumers. China alone will add 572 million consumers. By 2020, 80 percent of the middle consumers will live outside of the industrialized world. Emerging markets already lead in certain consumer markets. China already has the world’s largest market for mobile phones. In 2004 China had 335 million mobile phones in use compared to 171 million in the US. In China that number is projected to rise to 807 million by 2010. By that date China is projected to have 336 million Internet users, the United States 306 million and India 585 million.

The world is changing and it’s changing quickly. Supplying professional services and products to these emerging markets is an opportunity to grow your business. Innovative Thermal Solutions has affiliates in both India and China. Please call us at (517) 424-7107 to explore opportunities for your business in these emerging markets.

Engineering Tip: Top 5 Engineering Hints You'll Rarely Hear
Here is some interesting reading for anyone involved in or forced to work with engineering. Not unlike my own “10 laws of design and development” these are just practical issues too often overlooked. Top five engineering hints you'll rarely hear.

On A Personal Note: Think Long Term on Energy
Yesterday I paid $1.80/ gal for regular unleaded gasoline. It was just a few months ago that the price was over $3.00/gal. The free market system works. Consumption has declined due to people reducing their usage and using alternatives (and the warm winter has helped reduce demand). Exploration and production are both up due to the high price. But beware, the coming energy crisis has not been averted. It’s still coming, we just don’t know when. I read an article last month that truck and SUV sales had actually picked up due to the falling gas prices. I believe in the market’s ability to set the price of oil (and gas). But we all know that whether it’s stock prices or crude oil prices, nothing goes only up or only down. Markets go up and they go down. It is the long term trend and the end result over a period of time that is important. I still believe in the peak oil scenario. Oil production will peak someday. And when that happens it could bring serious disruption to our global economy (and life style). Don’t let this recent decline in prices sway you from a strategy of developing energy efficient products.

On A Lighter Note: A Compliment for Microsoft
And this supposedly true story about Microsoft:

I once got an especially helpful reply to a question I asked on Microsoft's on-line tech support service. I wrote back to thank them for a complete and concise reply, and said how much I appreciated it.

The next day I had a response: "We are looking into the problem and will contact you with a solution as soon as possible."

Article Policy
© 2006 Innovative Thermal Solutions. All Rights Reserved. You are free to use material from the Innovative Solutions newsletter in whole or in part, as long as you include complete attribution, including live web site link. Please also notify me where the material will appear.

The attribution should read: "By Bob Utter of Innovative Thermal Solutions. Please visit Bob's web site at for additional articles and resources on engineering services and new product development." (Make sure the link is live if placed in an eZine or in a web site.)

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