It’s said it’s always darkest before the dawn. With continued high unemployment, escalating national debt, and soaring trade deficits with China, the economic news seems pretty dark. Two events occurred last week that are like a bright dawn coming after a dark night.
The first was the Design-2-Part Show held October 20-21 in Long Beach, California. This show features design and contract manufacturers located in the United States. While some of these companies may also have a plant offshore, no offshore-only companies are allowed to exhibit in the show. The mission of The Job Shop Company that owns and puts on the dozen different Design2Part shows around the country is to support and feature American companies.
This year’s show was exciting! It was the most well attended show since the fall of 2007, before the recession started. Show management said it was one of the best southern California shows in the history of the company, with attendance up 21 percent over last year’s show in Pasadena and up10 percent over the 2008 show in Pomona. In fact, it was so well attended that many exhibitors had trouble talking to all of the attendees that were visiting their booths. The attendees weren’t just browsing, as many exhibitors had far more leads from this show than the two previous shows.
The demise of shows such as the Design-2-Part show was expected because of the Internet. But there’s no substitute for the face-to-face interaction provided by trade shows. At the Design2Part shows, engineers get to see and touch actual parts built by the exhibitors. This gives them ideas to use for new products they are designing and shows them how other people have solved problems they may be encountering in their design phase.
What made it even more exciting this year was the number of attendees that came to the show looking for domestic sources for parts for new products or looking for a domestic source to replace an offshore vendor for parts for existing products, with some even bringing prints to quote. We heard several stories about quality problems with offshore vendors that are making it no longer advantageous to source the parts offshore. One company mentioned that because parts coming from China didn’t meet dimensional specifications, they had to rework the parts and modify assembly steps at their own cost. When they contacted the Chinese vendor to return the parts, the Chinese vendors said, “We’ll be happy to accept a new order for the parts,” but wouldn’t give credit for the defective parts from the previous order.
Other factors mentioned in the decision to rethink sourcing offshore in China were the increases in wages as a result of the suicides and strikes during the summer, as well as increases in shipping costs.
The other event was the 17th Annual TechAmerica (formerly AeA) High Tech Awards that were presented at a luncheon attended by over 600 people in San Diego on October 22nd. This event highlighted the creativeness and ingenuity of American companies, which is one of our greatest strengths in competing globally. There were ten categories of awards this year with the addition of contract services for the first time. Out of many dozens of applications, three to five finalists were selected for each category. The award winners in each category were:
Software: Anakam Inc. provides integrated no-touch risk-based identity verification and multi-factor authentication solutions for government, healthcare, and commercial organizations. Anakam was just acquired by Equifax Inc. earlier this month.
Internet/Web Commerce: Anonymizer provides a proprietary set of solutions for the corporate online privacy sector.
Contract Services: D&K Engineering provides full turnkey development and manufacturing services, as well as focused projects to address a specific client need anywhere along the product life cycle.
Computers & Related Products: Z Microsystems provides field-ready computing technologies, focused on government and DoD, including a full range of deployable data storage systems.
Defense/IT Solutions: DefenseWeb Technologies helps government organizations address complex automation and information technology challenges through innovative software development. DefenseWeb became a wholly owned subsidiary of Humana Inc.
Semiconductors, Industrial & Analytical Instrumentation: Quantum Design provides automated temperature and magnetic field testing platforms for materials characterization.
Communications Products & Services: Entropic Communications is a leading fabless semiconductor company that designs, develops, and markets system solutions to enable connected home entertainment.
Medical Device Technology/Instrumentation: GenMark Diagnostics, Inc. provides the eSensor® XT-8 to perform multiplexed molecular diagnostics utilizing a micro fluidic system to accelerate target binding and improve time to result.
Clean Technology: Reaction Design empowers transportation manufacturers and energy companies to achieve their clean technology goals with a comprehensive and east-to-use set of software simulation tools, chemical models, and expert consulting services.
Outstanding Emerging Growth (under $5 million revenue): Seacoast Science, Inc. provides the next generation of chemical sensor and chemical detection devices for a variety of markets including leak detection, military, homeland security, air quality monitoring, and emission gas detection.
While the technology represented by these companies is amazingly cutting-edge, it is even more amazing that many were founded and have grown to be successful during the recession of the early 2000s and the most recent Great Recession in a state that has the 49th worst business climate in the United States. One new technology company starts every day of the year in San Diego, and high-tech companies represent six percent of all companies in San Diego and eleven percent of the workforce.
These companies are an example of the entrepreneurial spirit and ingenuity of Americans and provide the best hope for a resurgence of American technology-based manufacturing and services in the face of challenging global competition.