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SPIE Professional April 2014

Taking the pulse of the photonics industry

Photonics West exhibitors worth $84 billion in core photonics sales
photo of Stephen Anderson

People who work in the photonics industry received mostly positive indicators about the future of the industry at SPIE Photonics West this year.

An expanded industry program that included workshops and panel discussions about financing biophotonics startups, protecting intellectual property, and other technology-transfer topics, along with a sold-out exhibition, served to fuel an optimistic view of the photonics market and its economic impact.

And on the last day of the week-long event in February, SPIE industry and market strategist Stephen Anderson gave exhibitors a sampling from an ongoing market analysis by SPIE that shows the combined annual contribution to the global photonics market of the companies at Photonics West totals more than $84 billion.

Anderson, who spoke at several industry events during the week, said new industry data analyzed by a team at SPIE indicates that Photonics West and BiOS Expo exhibitors represent about 18% of the global photonics product market, estimated at $480 billion, and employ some 337,000 people.

The strong photonics market and employment figures are a sign of the industry’s resiliency through a time of economic upheaval throughout the world, said Eugene Arthurs, SPIE CEO.

“We have the great fortune to be working in a vibrant area of science and technology, in a field that is expanding in so many ways, on so many fronts,” Arthurs said.

Core optics firms at Photonics West exhibition

SPIE Photonics West workmark The SPIE market analysis was based on 1008 exhibitors at the Moscone Center in San Francisco whose sales and employee data are compatible with the Dun & Bradstreet business information database (out of a total 1506 exhibitors). Anderson said the study, which focused only on exhibiting companies producing core optics and photonics components, excluded educational institutions, government labs, and other exhibitors that don’t make or ship optics and photonics components.

The SPIE team reviewing the company data from 2012, the latest year available, also created a “photonics factor” to pro-rate company revenues and employment information based on estimates of actual photonics-related sales.

The data indicates that 40 out of the 1008 firms at Photonics West had photonics revenues exceeding $500 million and accounted for more than three-quarters of the $84 billion in sales. Anderson noted the “long tail” of the photonics industry was evident in the data: No fewer than 757 companies with annual revenues below $10 million accounted for just 2.5% of the total.

Of the 337,049 employees working for those exhibiting companies, 131,000 are in the US, he said. Japan ranks second in employment, with 121,000. French exhibitors were third on number of photonics jobs with 28,500, just ahead of Germany with 26,000.

Photonics commercialization still strong

Photonics West drew a record 21,360 registered attendees from 1-6 February, with more than 4700 presentations and industry sessions that provided ideas for those looking to commercialize new technology.

Pointing to these and other SPIE programs to help researchers transfer their technology into life-enhancing products and services, Arthurs noted that “It is a source of great satisfaction that many of the technologies underpinning the medical advances and photonics economy of today were nurtured in SPIE meetings.”

At the Startup Accelerator Forum, for instance, legal and financial experts gave would-be entrepreneurs advice on patent protection, nondisclosure agreements (NDAs), and other IP-related topics that help scientists bridge the gap between basic research and commercial product development. At another session on photonics entrepreneurship, three photonics insiders gave job interviewing tips and a crash-course in feasibility analysis.

Optics and photonics executives see growth

illustration for photonics industry events A panel of seven executives at yet another session during the week offered a consistently upbeat view of photonics markets and their near-term potential.

Healthcare and the various markets for sensors were repeatedly cited as areas of impressive growth in the past year and good prospects for the coming year.

Arthurs agreed. “I believe that Photonics West 2014 offers a window on some key opportunities for future business and for advances in the war on disease,” he said.

While panelists said the automatic government spending cuts in the USA known as sequestration did impact the defense industry in particular, some companies were less affected than anticipated.

Rick Plympton, CEO of Optimax, even looked at the cutbacks in a positive light, saying “sequestration is going to realign defense spending.” The industry will have an advantage in the new era, as government looks for cost savings that can be enabled by photonics, he said.

Tim Day, CEO and cofounder of Daylight Solutions, echoed the sentiment. A detailed analysis of lifecycle costs will be a part of any defense acquisitions, and “photonics has a distinct advantage” when that is factored in, he said.

When asked where the opportunities lie in the years ahead, almost everyone on the panel mentioned life science and healthcare. Dirk Rothweiler, executive vice president of optical systems at Jenoptik, also cited the proliferation of “ambient intelligence.”

Beyond the desktop or laptop computer, he said, semiconductor manufacturing is benefiting from consumer items with programmable displays. And the automotive industry, he said, continues to be an important market, including photonics in displays, ambient lighting, and potentially even self-driving cars.

An audience member asked what disruptive technology worries them as a threat to their business and markets, but most analysts had a hard time coming up with an answer. Day’s response to the question was to point out that it’s actually photonics that is the disruptive technology.

“There’s so much opportunity; I see growth,” said Jerry Jurkiewicz, president of IDEX. “If all of us on this stage organize our companies, our talents, and our technology on those opportunities, I think the positive side of the ledger so far outweighs the negative side, that I do not lose sleep at night in this industry.”

While there are opportunities all around the world, Dennis Werth, the senior vice president of the Photonics Group at Newport, said that he would bet on the US as the place that will produce the next big thing. He cited Google, Amazon, and eBay as examples of successful innovators.

“This country just has a repeated history of creating whole new industries,” he said. “You just don’t see that anywhere else.”


DOI: 10.1117/2.4201404.02

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