Survey reveals biggest challenges facing electronic design businesses into 2020
13 November 2019
As 2020 approaches fast, embedded systems consultancy, ByteSnap Design has conducted research to understand electronic design business expectations for the future. While exhibiting & presenting at EDS (Engineering Design Show) recently, ByteSnap's team interviewed show delegates to ask about the greatest challenges faced by their business.
Executives from electronics companies were questioned, enabling the ByteSnap team to gain valuable and specific insights into the constraints facing the industry today and into the next decade.
• 20% of respondents said their biggest immediate challenge is political uncertainty, especially Brexit
• 20% felt that finding new business was a key concern
• 18% said that finding the right talent and skillsets remains a challenge for their organisation
• 18% cited meeting project lead times as critical
• 17% were concerned about potential obsolete technology
Here, we look at some of the challenges, and how they affect the electronic design industry, in greater detail.
Brexit is affecting key decisions
Brexit was the biggest challenge cited by 20% respondents. The UK’s potential exit from the European Union has a trove of implications for electronic design companies. Brexit may or may not happen. Several respondents were concerned about how UK and European companies would continue to do business in the event of the UK leaving the EU.
Ambiguity and uncertainty persist around tariffs and taxes, employment of European workers, grants and exemptions, and licensing and regulations, including the Radio Equipment Directive.
The offshoot of this uncertainty is that many businesses in the UK and Europe and operating a “wait and see” approach. They are unwilling to commit to new projects and award new contracts that may be impacted by Brexit. In the worst cases, component buyers are looking away from the UK and even Europe, to avoid having to change agreements in a post-Brexit future.
Finding new business is a major concern
With Brexit impacting buyer decisions, 20% of electronics professionals stated that finding new business and retaining existing clients is even more challenging than normal.
However, electronics companies who said finding new business was a challenge were divided on the more specific reasons. Even though the electronics sector is still growing apace, driven by consumer and industrial demand, and the requirement to deliver emerging technologies to markets such as IoT devices and EVs, some companies were concerned about finding enough opportunities to increase revenue and achieve growth. Others were worried about moving into new verticals, filtering real opportunities, and offering products and services to tie into new trends and technologies, such as AI (artificial intelligence), IoT (Internet of Things) and EVs (electric vehicles). Nevertheless, the right opportunities do seem to exist. According to Investopedia, the global market for electronic components used in projects is predicted to grow by around 5.6% between 2019 and 2024.
Recruiting and retaining the right team is vital
Without the right skill base, companies cannot deliver on promised products or services and the sales effort is in vain, with 18% of respondents citing employing the right people as a major challenge. By far the greatest concern out of human resource challenges for the electronics sector appears to be recruiting new hires. A lack of appropriate skills and an understanding of embedded technology are also issues for industry peers.
Delivering electronics projects on time and on budget
18% of respondents cited pressure from clients to deliver projects quickly, identifying lead times as a concern. The electronics industry is growing, competition is fierce, and the sales effort requires commitment to delivering contracts and projects on time.
In terms of budget worries, respondents also recognised that in Europe the electronics industry also faces competition from China and Eastern Europe, where labour costs and sometimes components are cheaper, and companies can promise lower prices.
Obsolete technology – electronic components & embedded operating systems
17% of electronics professionals were concerned about technology developments, including component obsolescence, as it can render an entire product very difficult to sell and leave a business with hefty research and development, design and marketing costs, and even manufacturing investment costs, with no avenue for return on investment.
It's not just component obsolescence that brings technology challenges, respondents also cited:
• the need to keep on top of programming developments
• emerging technologies like AI, which disrupt industries as well as providing new opportunities
• having the technical knowledge to design smaller and smaller products.
Dunstan Power, Director of ByteSnap concluded: “Brexit will impact the electronics industry, skill shortages will persist, component and major operating systems (Windows) obsolescence will continue to provide challenges – but the sales effort must go on.
“Our snapshot of industry challenges taken from EDS can help all industry participants understand current threats and constraints and create a strategy to overcome these problems."
To read the full findings, please visit: https://www.bytsnp.uk/eds_survey
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