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President Barack Obama watches as an operator demonstrates the final stage of light fixture assembly during a tour of Orion Energy Systems, Inc in Manitowoc, Wisc., Jan. 26, 2011. |
The recession wreaked
havoc on a myriad of businesses
across the US, however, several
industries experienced strong
revenue growth despite the
economic downturn. Industry
research firm
IBISWorld identified the top
10 fastest growing industries
from 2000 to 2016 and 10
dying industries in the decline stage
of their life cycle.
“After compiling the list of
fastest growing industries,
there were some apparent
trends,” said IBISWorld senior
analyst Casey Thormahlen. “Each industry on the list
experienced growth as a result
of one or more of four drivers:
Internet growth, environmental
issues, cost cutting and
evolving technology.”
Internet Growth:
IBISWorld says it is no surprise
that voice over internet
protocol (VoIP), e-commerce and
online auctions, and Internet
publishing and broadcasting top
the list. Each is being
supported by the increasing
popularity of the Internet for
communication and business
transactions. The growth of
these industries will benefit
major players like Comcast , Time Warner
Cable, Cox Enterprises,
Vonage, Amazon, eBay, Google and
Facebook.
Environmental Issues: Growing environmental
concerns and favourable
government assistance has
boosted wind and solar power
generation. A continued focus on
lifting energy self-sufficiency
and reducing greenhouse gas
emissions is expected in the
next five years, benefiting
companies like Next Era Energy
and Xcel Energy.
Additionally, increased
government regulation with
regard to the environment has
opened up vast opportunities for
environmental consulting firms
to help clients with compliance.
Cost Cutting: Third-party administrators,
insurance claims adjusters, and
correctional facilities have all
been experiencing growth as
private and public entities seek
out alternatives amid a slow
growing economy. As insurance
operators look to cut costs and
improve profitability, they are
outsourcing work to claims
adjusters and administrators
like Aon Corporation, Marsh &
McLennan Companies and Willis
Group Holding. Similarly, as
government budgets tighten,
correctional facilities are
turning to less expensive
options, such as the
privatization of facilities like
Corrections Corporation of
America.
Evolving Technology: Biotechnology and video games
are an unlikely duo, but both
industries are benefiting from
constantly evolving technology
and product developments, like
genetic engineering and 3D video
games. Although each industry
has taken considerable steps to
cut costs in the past few years,
diversified product lines and
increased demand from an aging
population (video games are
seeing more female and older
players) are key revenue drivers
for both industries. Companies
that stand to benefit include
Syngenta, Monsanto , Genentech and Activision.
Industry |
|
Revenue 2010
(millions) |
|
Revenue Growth
2000-11 |
|
Forecast
Revenue Growth
2011-16 |
Voice Over Internet
Protocol Providers
(VoIP) |
|
$
|
12,498
|
|
193.9%
|
|
17.4%
|
Wind Power
|
|
$
|
3,388
|
|
16.9%
|
|
11.2%
|
E-Commerce & Online
Auctions |
|
$
|
95,005
|
|
12.2%
|
|
9.4%
|
Environmental Consulting
|
|
$
|
18,153
|
|
7.7%
|
|
9.4%
|
Biotechnology
|
|
$
|
86,971
|
|
11.0%
|
|
9.6%
|
Video Games
|
|
$
|
38,622
|
|
6.2%
|
|
8.3%
|
Solar Power
|
|
$
|
69
|
|
2.7%
|
|
7.9%
|
Third-Party
Administrators &
Insurance Claims
Adjusters |
|
$
|
57,530
|
|
6.9%
|
|
7.7%
|
Correctional Facilities
|
|
$
|
34,373
|
|
9.1%
|
|
7.5%
|
Internet Publishing &
Broadcasting |
|
$
|
32,573
|
|
25.2%
|
|
6.8%
|
The 10 dying industries
All of the 10 industries listed are in the decline
stage of their life cycle, have observed a sizable
contraction in both revenue and establishments from 2000
to 2010 and are expected to continue experience revenue
and establishment declines through 2016. All these
industries also exhibit at least one of the following
detrimental factors: damaging external competition,
supplanting advancements in technology and industry
stagnation. Industries and companies that experience
these conditions may be vulnerable to their own demise
in the future.
“Although these industries are all facing negative
numbers, the operators in them aren’t necessarily on the
brink of death,” says IBISWorld senior analyst Toon
van Beeck. “Firms that protect their strength in certain
market segments, focus on niche opportunities and
capitalize on the dwindling number of competitors can
often reap the greatest rewards as sole operators,
obtaining market survival and profitability.”
Manufacturing:
These sectors include:
Men’s and Boys’ Apparel Manufacturing;
Women’s and Girls’ Apparel Manufacturing;
Costume, Uniform, Infant and Other Apparel
Manufacturing; Hosiery and Sock Mills;
Textile Mills;
Apparel Knitting Mills; and
Carpet and Rug Mills. Warren Buffett's Berkshire
Hathaway is
a key player in all of the mill industries, while Hanesbrands is a strong player in
mill and apparel manufacturing industries.
Retail: Record Stores and Manufactured
Home Dealers industries are highlighted in
IBISWorld’s 10 dying industries. Industry exits have
already occurred for many major players within the
Record Stores industry, including Virgin Media
and MTS Incorporated. In the Manufactured
Home Dealers industry, Berkshire Hathaway also has a
presence through its subsidiary Clayton Homes, the
biggest player in the industry.
IBISWorld says while many people may think that
the Book Stores industry would be a given in the dying retail space, the
numbers do not point to that direction.
Information:
The
Wired Telecommunication Carriers,
Newspaper Publishing and
Video Postproduction Services industries are
suffering the most due to the rapid change in
technology. While major players like AT&T and
Verizon continue to dominate the
Wired Telecommunication Carriers industry, they are
generating lower returns each year as consumers switch
to VoIP and wireless products.
Other: This final category includes the
industries of
DVD, Game and Video Rental;
Formal Wear and Costume Rental; and
Photofinishing. In 2000, Blockbuster was a thriving
business and the most dominant player in the DVD, Game
and Video Rental industry, but the company has since
gone bankrupt. And while Eastman Kodak and Fujifilm were once major and prominent companies
within the Photofinishing industry, they now represent
only a fragment of their presence in their heydays.
Industry |
|
2010
Revenue
(millions) |
Total Revenue
Decline 2000-2010 |
Total Forecast
Revenue Decline
2010-2016 |
Wired Telecommunications Carriers |
|
$
|
154,095
|
|
-55% |
|
-37% |
Mills |
|
$
|
54,645
|
|
-50% |
|
-10% |
Newspaper Publishing |
|
$
|
40,726
|
|
-36% |
|
-19% |
Apparel Manufacturing |
|
$
|
12,800
|
|
-77% |
|
-9% |
DVD, Game & Video Rental |
|
$
|
7,839
|
|
-36% |
|
-19% |
Manufactured Home Dealers |
|
$
|
4,537
|
|
-74% |
|
-62% |
Video Postproduction Services |
|
$
|
4,276
|
|
-25% |
|
-11% |
Record Stores |
|
$
|
1,803
|
|
-76% |
|
-40% |
Photofinishing |
|
$
|
1,602
|
|
-69% |
|
-39% |
Formal Wear & Costume Rental |
|
$
|
736
|
|
-35% |
|
-15% |