5 Industries on Life Support: Does technology simplify our lives...or complicate them in ways we didn't foresee?
by Joe Mont
Monday, April 4, 2011
you read the print edition of a newspaper, still make calls over a
landline or plan to rent a tuxedo for an upcoming wedding, you are doing
what many of your friends and neighbors gave up long ago.
a market research firm, recently compiled a list of 10 industries that
may be on the "verge of extinction in the United States." Within its
database of close to 700 industries, about 200 are in decline, with the
ones selected having seen large and steady drops in revenue and number
of establishments. From the beginning of 2011 to the end of 2016, these
industries are likely to deteriorate further.
"People might think
that we are coming out of recession and these industries have hit
bottom, so therefore everyone should be going up," IBISWorld Senior
Analyst Toon van Beeck says. "But that is definitely not the case. A lot
of these revenues peaked in about 2000 and since then they have
declined year over year."
He explains that while economic cycles,
the ups and downs of bull and bear markets, often swing every eight to
10 years, "industry life cycles can be three to 50 years where they go
from maturity into decline." The industries singled out by the firm "are
really at the end of their decline phase or they are in rapid decline."
of the industries share common reasons for their bleak prospects,
including damage from advances in technology, industry stagnation and
external competition, he says.
Because labor costs and regulations
are high domestically, many manufacturers send their production to
foreign countries. Downward price pressure from domestic wholesalers,
retailers and consumers forces U.S. producers to cut costs to offer a
competitive price. Many firms that cannot outsource have a difficult
Advances in technology are another drag on
companies whose failures drag down their industry. The rapid pace of
technological developments may create industries and business
opportunities. But traditional companies not forward-thinking or nimble
enough to adapt will court failure.
Adding to the vicious circle,
struggling companies are often forced to cut prices and reduce
production costs. Doing so hammers away at budgets for R&D;, as well
as capital and technology investments. The resulting stagnation drags
down these businesses, and their overall industry, even more.
3. Record Stores
4. Photo finishing
5. Video stores
Gone...and soon forgotten?
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