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People seem to forget the power of technology and its uses. There seems to be a disconnect between the real world and the theorists.

Telecom and enterprise technology are going to be one of the first beneficiaries of a wrecked economy. The reason why Ericsson and other telecom and technology companies are going to be seeing a bounce now is because the survivors of this ongoing recession are using technology to improve margins and maintain competitiveness.

Technology is usually one of the first things to get cut in a company’s budget during a recession because most purchases tend to be discretionary. However, while a recession is running its course the technology that remains in the company ages and becomes out-of-date. When the economy approaches the bottom or finally hits bottom, the surviving companies begin making purchases in order to compete in what is left of their market. It is a natural cycle of activities/events. I guess you can call that a recovery: “you hit bottom, the only other place to go is UP.” That is a cheery way of looking at things. Actually restructuring people often look at recovery in such terms. The only way to blow the opportunity is if you do not know how to run a company at the brink of distress. Keep in mind, a company may be a survivor but unless they take advantage of the vacuum left by the bankrupt and shuttered companies, the vacuum will be rapidly filled by a new company.

So does this mean good news for Ericsson? Yes. The company is a national vendor of services and technology for Sweden. Ericsson has the backing of the national government. I am not worried about Ericsson. If you will recall they had problems 10 or 12 years ago and everyone was worried about the company; except for those in the business. Ericsson cut staff, did better, hired staff, then did worse, then cut more staff, and now is doing better (may or may not hire). It’s a cycle. When you have the backing of your national government, the cycles may be frequent but they sure are short.

Over the years Ericsson went from being a supplier of hardware to being a supplier of hardware and services. The company has been providing outsourced network services for years but only in the last few years has the company started relying heavily on its services division. Ericsson has a diverse portfolio of capabilities and is one of the most well run technology companies on the planet. As for innovativeness, I will say the company has had its moments over the years; good and bad. But the company has survived. Having the backing of your national government certainly helped.

With the entire world in a recession, the smart handset has become the most critical part of the independent business person’s arsenal of tools. In the two years (max), the smart handset and the tablet are going to end up becoming mainstays of households and businesses. If you want to stay competitive, you need to be available to all of your clients at all times. You have to be able to carry your business with you at all times.

In less than 4 years, analysts have gone from questioning the viability of the mobile web to now wondering why it took so long for it to take hold. The mobile web is here to stay. Tools like the smart handset and the re-launched tablet are filling a strong demand for technology while simultaneously fueling the cycle of innovation.

Innovation’s engine is people. The fuel is competition, ideas and demand.