Four important megatrends will impact the process industries in the Americas and throughout all parts of the world, according to Norm Gilsdorf, president, Honeywell Process Solutions, who opened the Honeywell Users Group conference in Phoenix. An uncertain economic environment, resource constraints, increased concern about safety/security and the ramifications of energy supplies and the world going green will drive the future of process solutions, he said.
The future will be affected by those four megatrends Gilsdorf sees. The uncertain economic environment is at the forefront. "The Asian countries need to add at least 100 new power plants over the next two years," said Gilsdorf. "And in refining, margins are tending to swing; the key is when demand will return, if it will return at all. I think we have to learn to live with economic uncertainty going forward."
Other shifts in the global economic picture will also play a role. "The world is so interconnected now that old recovery models don't work anymore. It used to be that, for example, during the ‘Asian Flu' financial crisis in the 1990s, Asia crashed, and the first world dipped and came right back. Now that's just not what happens," Gilsdorf said. "There are still some immune patches, Brazil for example, but by and large the world is so interconnected that when one large part goes down everything goes down. I think that we're going to see that the world has shifted a whole lot during and after this recession. And I think the rate of change has increased," Gilsdorf added. "There's an energy and intensity in Asia that is just lacking in North America and Western Europe. Think about this. At $80 a barrel for oil, there is enough wealth in the Middle East to buy all six major stock exchanges outright and pay cash. Since the recession started, those countries, which used to invest heavily in the West, are now investing in China and India, but especially in their own countries, building infrastructure and manufacturing capabilities as fast as they can. At least 20% of capital has shifted eastward away from the first world."
Human constraints will play a key role, too. "Engineers are retiring, and new engineers aren't coming quickly enough," said Gilsdorf.
Safety and security will continue to be important, as evidenced by incidents in the U.S. petrochemical industry last year causing $20 billion in losses," said Gilsdorf, who also sees energy and green initiatives as interrelated. "We have to meet the changing energy requirements, while balancing them with the environmental challenges," he said. "In northern China, within a few years they will run out of water. We look at the way the world's moving in terms of population growth and trends. We have many challenges and many opportunities. This trend is going to continue for many years."