Time to turn the page—on the calendar and the economy

In a few days we’ll be starting a new year—and I say good riddance to the old one. I doubt that anyone will ever look back and refer to 2009 as the good old days.

The year started with the federal government shelling out billions of dollars to rescue financial institutions deemed “too big to fail.” Then came another multi-billion “stimulus package” that was supposed to jumpstart a stalled economy and create new jobs for millions of little people.

As I write this, the national unemployment rate stands at 10 percent—which means one out of every 10 of the little people is still out of work— and the president is contemplating yet another stimulus plan.

But as Scarlett O’Hara famously said, “Tomorrow is another day.”

U.S.-based manufacturers appear be carrying that sentiment into the New Year. The cover story for this issue, starting on page 14, addresses the top trends we can expect to see in the manufacturing sector in 2010.

My reporting for that feature led to several surveys in which U.S. manufacturers expressed optimism about their prospects going forward. Of course, I wonder if that optimism is due more to wishful thinking than fact-based analysis, particularly when most industry experts see other economies—specifically emerging ones like China and India—experiencing robust growth in 2010 while the U.S. continues to plod along. But I guess the 1.5 percent growth rate that the International Monetary Fund projects for the U.S. economy is a vast improvement over the contraction we’ve seen the past couple of years.

As you can learn by reading the cover story, the economic downturn is influencing the business strategies manufacturers are expected to deploy in 2010—with three major areas of emphasis being:

• Inventory optimization;

• Strategic pricing; and

• Open innovation (a new form of collaborative product development).

The focus on optimizing inventory should help guard against being caught with too much—or too little—inventory, depending on how the economic winds actually blow as the year progresses. Strategic pricing is a means of getting the best price—and thus the highest possible profit—on all goods sold. Open innovation offers an easier means of getting access to the expertise necessary to move innovative new products to market faster.

As manufacturers adopt any or all of these approaches, some of them will no doubt turn for help to new, up-and-coming software vendors who specialize in these areas.

We profile 40 such vendors in the Emerging Software Vendors section, starting on page 19. These mostly small vendors operate under the radar, but their solutions—which attack specific problems faced by numerous manufacturers—enabled many of them to show strong sales growth in the most challenging economic environment many of us have ever seen.

It’s no coincidence that most of these emerging vendors deliver their solutions under the Software-as-a-Service model, or via platforms that don’t require users to purchase, install, and maintain large, complex software systems.

As running a manufacturing business becomes a more complicated, users want technology that’s easier to use. That trend will continue beyond 2010—in both good and bad economies.

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