Obstacles and Opportunities in 2022

The headwinds of inflationary trends, pandemic management, internal political tensions, rising competitiveness, supply chain issues, geopolitical rivalry, energy shortages and the rush to secure resources, all serve to remind us that in commercial terms, the next twelve months represent a period of unparalleled obstacle to smooth business sailing. Except that is not quite true. In fact, it is not true at all. If history teaches us anything it is that the calm waters of rapid globalization and economic growth since 1991 are the exception, not the rule. Most of the past two hundred years have witnessed all these obstacles and more, and often times, far more intensely than they are currently being felt. Of course, it is disconcerting and not at all convenient, but then few if any skills are honed by convenience and without the drive of necessity, there is no invention.

Obstacles and Opportunities

For those who have experienced the joys of ocean sailing, there are few better analogies that describe current business challenges than harnessing canvass and boat to serve the chosen course, and refusal of being swept along by the strongest prevailing trends. The skill is not to nakedly fight the wind or tide, certainly not let them take us where they will, but to turn them to advantage. This involves the exploitation of five fundamental principles; balance, pitch, setting the sails, centering to prevent sideways drift, and, choosing the most appropriate course. The latter will rarely be a straight line, and thus adds to the skills required to secure arrival at the chosen destination.

The same processes that allow obstacles to be successfully tackled rests on the maximum exploitation of more favorable trends that exist within the negative. They are there if we look for them. To quote Shakespeare, “Ill blows the wind that profits nobody”. Turned to our favor, ills winds:

  • Restore energy, motivation and focus.
  • Remove cognitive and commercial clutter from decision making.
  • Push business reflection outside the box.
  • Devine the truly important from sentimental attachment and subjective preference.
  • Provide for sharply defined goals to define business actions.
  • Nail down, in the most concrete of terms, business and commercial necessities that demand to be tackled.
  • Redraw the boundaries of innovation and risk taking.
  • Drive hitherto unconsidered business options into the realm of possibility.
  • Realign corporate skill-sets—people—to negotiate new world realities. “Cometh the hour, cometh the man”.

In summary, ideas hitherto unconsidered, or unnoticed persons in the background, will arise or come to the fore to help successfully tackle obstacles and exploit opportunities.

In terms of the geopolitics, the events reported in the media day by day make us acutely aware that the highly predicable, pre-COVID world way of doing things, no longer exists. A mix of viral endemic management that varies greatly on a country-by-country basis (thus differently affecting travel, trade shows, conferences, business meetings and practical development projects in each case), together with rising commercial and political ambitions, should not be viewed in an unduly negative light, and, as we have stated, certainly not as either anything new or unforeseen.

The United Kingdom’s departure from the European Union was illustrative of wider global changes that have been in play for some time. Ironically, their root cause is the philosophical end of the classic East-West political division, and the recognized commercial and political limits of globalization which brought that change about. The communist-capitalist divide is long dead. What has replaced it is a different global alignment, built on entirely different principles. This has resulted in the pursuit of a more internally defined sense of national identity, and, most important of all, higher levels of state intervention aimed at securing broader prosperity. These same policies have been simultaneously but autonomously followed by China, Russia, India, Australia, the US and others, and are now integral to the pursuit of technical advancement and economic prosperity, but each in its own unique path. The goal is growing internal social coherence with the purpose of realizing economic, commercial and technical potential.

What has changed is the shift to more country-centric ambition and higher levels of government intervention almost everywhere, and it is to these realities that the world is currently accommodating itself. While potentially leading to misunderstanding, or even friction, calm heads realize that the same dynamics open the doors to new waves of energized innovation, and a determination to achieve the technical jumps that will benefit all nations and communities. As nations come of commercial age—or rediscover themselves against the failures of globalization—such reorientation is natural. Whether this is seen through the negative lens of rivalry, or the positive light of hopeful ambition, is a critical choice we must collectively make. Needless to say, wiser heads will choose the latter. This is not wishful thinking. These changes and their scale make possible very substantial avenues of commercial advancement:

  • In a new era of national self-belief confidence trickles down bringing initiative and ambition. Collective pride is a sign of success, not necessarily bellicose ambition.
  • New global alliances create more, and more strategic supply chains. The operative word being the first “more”. In essence, it is a bigger cake that is being baked.
  • Globalization will continue marking a collective platform for economic growth, but will benefit from the balance of critical re-shoring. More cake still.
  • Growth in competitiveness in highly advanced technologies raises investment levels and pushes for development of AI, quantum computing and encryption, 6G communications, enhancing both energy and co-operation from Universities to specialized SMEs.
  • Concomitant growth in commercial opportunities in a vast range of key enabled technologies across a range of sectors.
  • Notwithstanding any of the above, world commerce is, and will continue to remain, highly interconnected and interdependent. As a result, pragmatic leadership across Europe and Asia especially, will ensure events do not lurch too far from that pragmatism.

Fundamental to the latter are the inherent and relentless forces of economic development. East Asia, which remains the power house of growth, is maturing, but with that maturity the locus of energy will shift with comparative advantage to the Indian subcontinent. As China pursues common prosperity, India moves into the foothills of early-rapid economic growth.

Nowhere is the narrative more exactingly being played-out than in the area of semi-conductor and chip manufacture, as equally, the broader photonics ecosystem. The billions of dollars being plowed into these sectors are so large as to lose meaning in their statement, the more impressive fact is that these billions are already changing what is happening on the ground. As China continues to rapidly grow its capabilities, the US and Europe are establishing new manufacturing plants for the first time in decades. Equally, we will witness the breaking of green field sites in India as the country works with regional and global partners in the first phase of its semiconductor development. None of this is to replace Chinese production, but to add to total global supply. Something that is much needed. Collectively this reflects the huge level of rising demand from mobile and automotive applications, hybrid bonding, high performance computing, quantum technologies, AI and automatization, semiconductors, 5G investments and next phrase mm/w, all of which have a strong, if not defining reference point in photonics.

In a subsequent series of blogs, we will be looking in specific detail at three distinct technologies driving photonics opportunities in 2022, namely LiDAR, 5G and those surrounding the development of VCSEL packaging. A final blog will look at current advanced development and the design for manufacture of quantum devices. Meanwhile, the Palomar Group having weathered earlier inflationary and competitive stresses, stands experienced and ready to work with customers in staying ahead of semiconductor packaging and assembly challenges, whether these are referenced by early stage prototyping, the move towards standardization, efficient testing, or volume manufacturing matching the commercial parameters of speed or price per unit, or both.


Dr. Anthony O'Sullivan
Strategic Market Research Specialist
Palomar Technologies