Patrick Zammit, president of Avnet Electronics Marketing talks to Electronics Weekly in the latest in a series of exclusive interviews where CEOs give their impressions of the last 12 months and point to the challenges and opportunities which lie ahead for the industry.
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Downturns allow you to rethink what you do and re-adjust your strategies and resources.
Looking ahead, Europe has lots of good opportunities to rebound, not in the mass market, but in 1000s of industrial applications where we are world-leading in innovative technologies.
A review of the world economic crisis and its effects in our industry will reveal that it was the most surprising and sharpest downturn over a short time, but not the deepest.
It looks as if the European electronics markets will end 2009 with a minus of around 25% (same for distribution). This sounds like a lot, but from 2001 to 2003, the decline was at least as deep. And some readers may remember the memory crisis back in the 1980 where the downturn was even worse as were the industry effects.
What we learn from that is that downturns may enforce existing trends but they do not trigger them.
In Europe for example, outsourcing or off-shoring are not new. We will see a short term cost-related increase, but the big bulk of manufacturing has gone long ago.
In fact, sustainability discussions and the increasing pressure from customers, consumers and authorities will lead to a rethinking of some purely cost-driven measures and favour production return - near-shoring is the new buzzword.
More importantly, during the crisis Europe has not ceased to be innovative.
Especially in industrial electronics we see new products and technologies everywhere, driven by energy production, energy saving, waste management, overall power management, comfort, security and/or communication.
This is not about big platforms like mobile phones; it is about applications that barely touch one million pieces per year. But in their combined variety, complexity and innovation they will define Europe’s future electronics industry structure.
By nature, manufacturers need big platforms to develop new architectures and drive technologies. As the future European electronics industry does not offer them, Europe will turn into a distribution-operated market much more than it is today.
I see the next decade for Europe becoming very rewarding from a technology innovation perspective in fields like environmental technologies, medical, security and communication. And I can, with similar ease, foresee that it will become a decade for distribution.
Author is Patrick Zammit, president of Avnet Electronics Marketing