Rising tide

The consumer electronics industry is resilient enough to lead the way out of the global economic crisis, says Gary Shapiro

We struggle daily with news that seems bleaker than each day before. We are gripped by the worst economic crisis since the Great Depression. We are worried about our economy, our jobs and our future. But in all of this unsettling turmoil, our industry remains a rare bright light. We do not seek a government handout nor bailout money. Instead, we offer opportunity.

To every other industry and to every government, I say embrace us. Use us. Think about how our products can enhance efficiencies, save money, save energy, improve services and allow telework.

A rising tide lifts all boats. And innovation in technology is the moon that will cause the economic tide to rise. Innovation is the best medicine to end economic stagnation. Indeed, radio blossomed in the 1930s and helped lift not only our spirits, but the economy up from the Great Depression. For the past two decades, our industry has been the economic engine transforming our economy. In the US alone, we have created jobs for more than 15 million Americans. Not only in research, design, manufacturing and retail — but in related industries such as music and movies, broadcast, cable, satellite and services. This translates into a trillion dollars annually in economic activity. And we directly sell some $700 billion of our products around the world. Although our industry is not immune to the current economic doldrums, we are the industry that will breathe life into the economy. The 20,000 new products unveiled [at last month’s Consumer Electronics Show — CES] are a testament to the never-ending spirit of innovation that drives our industry and propels the global economy.

Broadband and wireless deployment, new Internet-based services, mobile and 3D video, connected homes, cars and on the go — Ipv6 — all will fuel our industry and our economy.

Our industry has enjoyed seven uninterrupted years of revenue growth. It is amazing to think that in only four years in the last three decades have our industry sales shrunk. The most recent time was in 2001, when the attacks of 9/11 helped to paralyse an already challenged economy. Our industry fell three per cent. A decade before that, in 1991, a brief recession caused industry revenue to be roughly flat at negative 0.8 per cent. In the more prolonged recession of 1974 and 1975, our industry posted double-digit revenue drops each year. Last year, on this stage I shared Consumer Electronics Association’s (CEA’s) 2008 projection of six per cent revenue growth. We didn’t quite achieve that, but with an estimated 5.4 per cent growth in 2008 we were strongly positive — not a bad achievement compared to any other industry. Indeed, even in this troubled environment, we are selling more of our products than ever. Consumers in the US will buy more than one billion consumer electronics (CE)?products in 2009.

But for 2009, we believe revenue growth is unlikely. We project flat revenue for the year. Specifically, we believe that the CE industry will post a 0.6 per cent drop in revenue — less than one per cent — for 2009 compared to 2008 revenue. Although unit volume of sales will be up in 2009 on strong demand, consumers are enjoying very good deals on our products, and that impacts industry revenue.

That we are stable in this tough economy is a testament to the vital role that our products play in the lives of consumers. Families need entertainment that replaces a night out on the town. Job seekers need computers, mobile phones and broadband. Commuters need GPS. Kids need — or at least want — video games. Our industry is resilient, and we will lead the way to a global economic recovery. 2010 will be a year of recovery, and we expect to return to industry growth. People crave technology. Not just [in the US], but worldwide.

Edited extracts of keynote address given by Gary Shapiro, president of the CEA, at last month’s CES show in Las Vegas