One of the technology areas I follow closely is industrial gas detection for life safety. The acquisitive US giant of the industry, Honeywell, has just declared it wishes to buy the safety product company, Sperian - which includes Biosystems, a manufacturer of life safety gas detectors which compete with those in the Honeywell range.
The industry appears to be consolidating. Honeywell has made a number of purchases, and other firms are also in a buying mood.
The question is, will this stifle innovation in the industry?
There are a lot of technology startups out there, and its a lot easier to get investment funding if you can say "...as there are acquisitive major players we anticipate a purchase at a multiple of..." Bizarrely, a market already dominated by major players can be a plus when raising funds, as long as you have a genuine advantage that the market understands and will pay for. (Mind you, I'm not sure how many of the company founders really want to sell out to the big players when they've told the investors they would.) As long as, of course, the major players are in genuine competition with each other on technology, and not just interested in stifling any advances which might require expensive change. Not that I'd suggest such a thing. A more realistic concern is that unconscious group think is probably better at squashing innovation than concious collusion..
Another basic issue is that with fewer producers there is less scope for design, rather than technology, differences. The pace of incremental innovation slows, even if the possibility for disruptive innovation is still there. I have a suspicion that, counter intuitively, a massive industry consolidation renders the chance of something coming from left field and rendering all of them obsolete more, rather than less, likely.
It was something I was scared of when I was in an established manufacturer in the industry, and is something I'm excited about now I'm not! Certainly there are plenty of people in the industry, some of whom I've spoken to, who have things in the lab, on field trial, even in small scale production and in niche markets which, with a little more research, development or even just industry awareness, have the potential to take significant chunks of the market in a relatively short time. I suspect in ten, or even five, years time the gas detection industry may look very different.
