Read about the Photonics Market, Online Programs and Webinars, Special Events, New Reports and Other Noteworthy News, Opinions & Opportunities
In this Issue:
Why is Photonics Doing so Well?
It's a good question: with the world waiting out the worst health crisis in a century and millions of people out of work, why is the optics and photonics industry not doing worse? In past issues of the OIDA newsletter we examined sectors of our industry that are faring better or worse. This month, we take a closer look at the overall economy.
The first figure shows the estimated U.S. gross domestic product (GDP), in real, seasonally-adjusted annualized U.S. dollars. It is essentially presenting the economy's "run rate." The impact of the pandemic is seen in Q2 2020, when the economic output dropped about 9% from the previous quarter. The drop may not appear dramatic in this chart, but for the world's largest economy it is a massive change, particularly for a single quarter.
Source: OIDA, from U.S. Bureau of Economic Analysis (US$ trillions).
Optics and photonics sell into most sectors of the economy, but some more than others. The pie chart below shows the different contributions to U.S. gross domestic product (GDP), with imports excluded. Values are for 2019, totaling US$ 19.0 trillion, and US$ 22.6 trillion excluding imports. Most of the segments support personal consumption and are labeled either goods or services in the chart. Private direct investment refers to goods and services that industry invests for its own production, including purchases of capital equipment and accumulating inventories. The remaining segments are goods and services made by and for government and for export.
Source: OIDA, from U.S. Bureau of Economic Analysis (2019 values in US$ trillions).
The pandemic impacted the economy in two ways. One was the disruption to the supply chain. This was widespread in Q2, affecting nearly everyone, but especially for sectors like exports. The other way it impacted the economy was the drop in demand in sectors like transportation, recreation, food service and accommodations (TRFSA). The next figure shows the net growth or decline in output from Q1 to Q3 2020, in billions of U.S. dollars. While several sectors recovered quickly, or at least regained lost ground, exports and TRFSA services did not recover well. The TRFSA segments include travel and hospitality and are the source of much of the unemployment, but have little overlap with optics and photonics.
Source: OIDA, from U.S. Bureau of Economic Analysis.
Another factor in our industry's favor was that much of the economy was declared "essential" and remained partially or fully open. The Economic Policy Institute estimated in May (here) that about 40% of the 142 million U.S. workers could be considered essential according to state executive orders at the time. The New York Times estimated in December (here) that about 70% of workers could be considered essential, and about 50% could be both essential and front line workers (i.e., those who cannot work from home). The actual share of so-called essential workers may be even greater, due to companies self-declaring their operations to be essential. In addition, many companies were helped by a government agency declaring it for them.
Source: OIDA, from New York Times data (here).
Meanwhile, in June a Stanford study (here) estimated that 42% of the U.S. labor force was working from home, representing about 50% of the wages. (Excluding unemployed workers in the labor force, the share of those working from home was 62%.) The authors estimated that as much as 50% of the workforce could work from home with 80% to 100% efficiency, which seems consistent with the New York Times estimate above. All this suggests that the substantial share of optics and photonics operations were likely considered essential or able to work from home.
Source: OIDA, from Stanford study (here).
And then there's the stock market, which is either a crowd-sourced barometer of financial experts' expectations of future profits, or a market that has become divorced from reality. It has been doing relatively well through all of this, as if there is no pandemic at all. The chart below shows the NASDAQ composite index (IXIC) for the last five years, with a sharp decline and recovery in the early stage of the pandemic. The compounded growth rate over the five years is a remarkable 21% per year. That is about 3X of the 7% growth we expect from the stock market, illustrated with the dotted line in the chart. Experts have brought attention to the fact that the stock market is more reflective of some highly-weighted companies that are doing well, including Alphabet (Google), Amazon, Apple, Facebook and Microsoft. In fact, the top ten weighted stocks account for 1/3 of the index's performance (here). And nearly all of the top companies in the NASDAQ index play important roles in optics and photonics.
One of the remarkable stories of the pandemic was how society pivoted in a crisis and began working and learning from home, even if many outcomes have been unequal and unsatisfactory, such as with virtual classrooms. Modern telecom and computer technology enabled the change, with optics and photonics playing a huge role, particularly in optical communications and flat panel displays.
All of this is to say that the pandemic largely spared optics and photonics companies the worst impact. But the story is not over. The pandemic will eventually dissipate to a mere endemic level, but the cost to the economy will be with us for a long time. The final figure below shows total public debt as a percent of U.S. GDP, from the U.S. Federal Reserve Bank. (The combined public and private debt is what must be paid back by the economy, much like personal debt must be paid through personal income.) Levels near 100% of GDP were once considered excessive by some economists, but the economy managed that level in recent years and the economy was booming. After the pandemic, the ratio of public debt to GDP will be substantially higher.
Source: OIDA, from U.S. Federal Reserve Bank (2021).
Economists now believe that the additional public debt is a prudent choice, by taking advantage of low interest rates to drive the economy back to its pre-pandemic level. If the economy stumbles, however, the debt will remain, with consequences to the U.S. and global economy that could last a long time. Let's hope not.
The U.S. Presidential Science Advisor Gets a Promotion
In the flurry of new appointments by new U.S. President Joe Biden, you may have missed that he is raising the role of Presidential Science Advisor to the level of Cabinet member for the first time (here), including the key members of the White House science team. This is big.
The Presidential Science Advisor is another name given to the Director of the White House Office of Science and Technology Policy (OSTP). OSTP sets and coordinates science policy across the various federal government agencies, analyzes the federal R&D budget and provides perspective to the President on science and technology policy. Presidential science advisors date to the World War II era, and work in a building adjacent to the White House. (The position of U.S. Chief Technology Officer, or CTO, was added to the OSTP organization in 2009, and reports to the Director. The role of the CTO position is less defined, changing with the person and the administration.) The OSTP director position requires Senate confirmation, but the advisory position does not, and Dr. Lander can begin serving immediately.
In a letter to Dr. Lander, Biden outlined several science-related priorities, referring to the "industries of the future," among other topics. Under President Trump these industries were quantum, AI, 5G, advanced manufacturing, and biotech.
The Cabinet is an advisory body, with no responsibilities of its own. It includes 15 core members, who are in direct line of succession to the President, and 7 (now 8) "Cabinet-level" positions at the discretion of the President. The elevation of Science Advisor to the Cabinet-level position may be largely symbolic, but symbols matter, and it's good for the science community.
For one insider perspective on who holds power in the White House and who does not, click here for a video from a former Cabinet official.
Trump Pardons LIDAR Innovator
In one of his last actions before leaving office, U.S. President Trump issued a pardon to Anthony Levandowski, an innovator in LIDAR and self-driving car technology. The pardon came in the final hours of the Trump administration, and means that Levandowski will not have to serve his sentence for theft of trade secrets. The story involves Alphabet's Waymo self-driving technology, Uber, and Levandowski's startup company, Otto. For more details, see here and here.
In Memoriam: Narider Kapany
We salute the life and contributions of Narider Kapany, a pioneer in fiber optics, who died in December at 94 years. His work on optical fiber dated to 1953, and he is credited with coining the term "fiber optics" in an article in Scientific American in 1960. He went on to found Optics Technology Inc. (in 1960), Kaptron (in 1973, later sold to AMP) and K2 Optronics (in 2000, later sold to Emcore). He founded K2 Optronics with his son, Raj Kapany. He was also a philanthropist in Sikh art and activities. Dr. Kapany was a longtime and memorable figure in the development of the optics and photonics industry, and left a lasting legacy. You can find more on Dr. Kapany's life here and here.
Welcome New OIDA Member
Join Us Online: OIDA Workshop on Developments in Co-Packaging Technologies for Data Centers
This OIDA workshop, traditionally co-located with OFC, is moving online this year. Mark your calendar now for this first-ever, two-day virtual event on 30 March and 31 March. Registration will be opening later this month.
Beyond Academia: OIDA Member Volunteer Speaking Opportunity
Sponsored by Go!Foton; this ten part interactive series will bring together our diverse community and tackle the sometimes difficult discussion of moving beyond academia.
Join us as we host a variety of programs that include plenary and Q&A talks from industry CEO's as well as more intimate, small group discussions where you will be able to engage directly with your peers and professionals. Learn more.
Are you an OIDA Member interested in speaking with our students and early career professionals? Fill out this form here.
Supporting Black Scientists and Engineers in Our Field
The 49 OSA Ambassadors, early-career leaders in our community, have come together to develop a scholarship program for Black scientists and engineers to help advance systemic change and reduce barriers for this marginalized community. The Equity in Optics and Photonics Scholarship has a fundraising goal of US$ 240,000, and we are US$ 90,000 away. We are asking OIDA corporate members help us reach our goal. Please contact firstname.lastname@example.org to indicate your interest and explore donation and pledge opportunities. You can also learn more and contribute personally by visiting osa.org/equityscholarship.
New Digital Programming Now Available Live and On-Demand
OIDA management and OIDA members have produced a series of webinars and two virtual Technology Showcases that are available at no charge. We encourage you to browse our growing list of upcoming events and view on-demand recordings as they become available. And there is much more! Check out the OSA We Are On webpage for more high quality webinars on career development from the OSA Foundation and the OSA Career Lab.
New Market & Technology Reports Available to OIDA Members
Industry leaders worldwide are planning their strategy for 2021 and beyond. A winning strategy is driven by intelligence. OIDA Members have exclusive—and complimentary—access to OIDA Market Update reports. Have you downloaded our newest industry reports?
Two new reports have recently been posted:
- OIDA Market Update: Silicon Photonics Market: This report features the market for integrated photonics based on the silicon material platform, so-called photonics (SiPh or SiP)
- OIDA 2020 Consolidated Market Updates Report: The 2020 Consolidated OIDA Market Updates Report is the collection of OIDA Market Update installments throughout 2020. Each market update features key topics in optics and photonics markets, including particular sectors or market segments, regional trends, and recent areas of focus for OIDA.
OIDA members have free access to all reports. We encourage you to browse the OIDA Publications and Reports Center to see everything available to you.
RSVP for Virtual OIDA Member Benefit Orientation
RSVP for OIDA's member benefit overview orientation. This is an opportunity to learn more about key membership benefits you and your company should be taking advantage of and explore how to maximize performance and grow your business.
Whether you have been an active member for years and need a quick refresh or are transitioning to the new OIDA membership model — this orientation is a must-attend! Please feel free to share this with your colleagues. When you join OIDA, everyone at your organization becomes a member.
OSA Applied Industrial Optics: Submit Your Research by 24 March
Be part of the prestigious and comprehensive OSA Applied Industrial Optics (AIO) technical program, and ensure that your research is seen by an influential audience. Presenting at AIO provides the opportunity to showcase your work to leaders in your field, and to expand your network of professional connections.
AIO is a multidisciplinary meeting that focuses on innovative photonics research and its commercial impact — bringing together industry professionals with experience in overcoming the challenges of deploying and commercializing new products with researchers developing cutting-edge technology.
Learn more, view the topics and submit your paper by 24 March.
International Day of Women & Girls in Science
Optics and photonics companies are filled with remarkable researchers, engineers and business leaders. As we celebrate the International Day of Women & Girls in Science on 11 February help OSA recognize their work. Post a tribute today to a colleague, supervisor or teacher or just a scientist who whose life and career inspired you.
Call for Nominations: OSA's Team Engineering Excellence Award
Submissions are now being accepted for the 2021 Paul F. Forman Team Engineering Excellence Award, which recognizes team technical achievements such as product engineering, process and software development, and patent development, as well as contributions to engineering education and furthering public appreciation of optical engineering. The submission deadline is 10 April 2021. Don't miss this opportunity to gain recognition and promotion for your optical engineering team(s).
Promotion of winning teams includes:
- Special recognition in OSA's magazine, Optics and Photonics News
- A dedicated press release
- Outreach on OSA social media channels
- Recognition during Frontier's in Optics (FiO), OSA's annual meeting
- Participation in the FiO Awards Ceremony and Reception
- Recognition in trade magazines, journals and/or conference publications
We Are OSA Podcast: Nurturing Talent
OSA Ambassadors explore their careers and the importance of inspiring young people around the world.
This podcast explores the personal stories of four emerging leaders in optics and photonics and how being part of our community has helped them to develop their careers. These emerging leaders talk about becoming ambassadors and their passion for sharing perspectives with students and other early career professionals. They provide career advice, technical knowledge and mentorship.
Listen to the episode.
Invitation to Join the OIDA Optics and Photonics Industry LinkedIn Group
Join 4,000+ of your colleagues in our OIDA Optics & Photonics Industry Network LinkedIn Group. This one-of-a-kind Forum for Industry lets you participate in discussions about cutting-edge issues. Extend your professional network. Exchange information about problems, ideas and solutions. Collaborate with experts in your field. Now is the perfect time to build a relationship with fellow optics and photonics professionals!
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OIDA (OSA Industry Development Associates) Council
Thank you to the volunteers who oversee the programs and services available to the Industry Community.
Inrad Optics, Chair-Elect
Plymouth Grating Laboratory, Inc.
Cedric F. Lam,
Double Helix Optics
Optimax Systems, Inc.