Most of the economic information in this industry tends to focus upon the related technologies of GIS, remote sensing, and GPS, vendors' market shares, and the potential growth they may have. However, I feel it is more important for us, in the GeoTechnologies, to look at the economy in general, and the economic states of the myriad industries which constitute our markets. That is where our livelihood will come from.
      Over the next few months, I will be looking at economics conditions globally, domestically, and within the myriads of industries that make up our markets.
      In general, economic signs for information technologies (which is actually the business we are in) are very strong. Corporate America will keep orders strong for industries in the information technology business. U.S. factories, refineries, mills, and utilities are working at about 84 percent of capacity, and more than 25 percent of each dollar is targeted for increase in productivity by adding computer, telecommunications equipment, and software. Corporate technology spending is forecast to rise by some 10 percent this year.
      The petroleum industry is potentially a huge market for the GeoTechnologies.
      The reasons are fairly obvious. These companies must work with large tracts of land, increasingly in remote areas of the globe where exploration, production, operation, and environmental management costs are very high. Increasing productivity, and reducing risk are critical elements of success for the oil patch. But the payback is also potentially very high. And, for the first time in years, those efforts are beginning to show signs of paying off.
     For the past 10 years, the petroleum industry had everything going against it. Global recession dried-up demand, infighting at OPEC depressed crude prices, and rising environmental regulation and dwindling domestic reserves led U.S. oil companies into expensive global exploration.
      The bottom line is that the oil industry experienced massive restructuring that left 500,000 American oil industry workers without jobs and shareholders with a cumulative loss of some $300 billion since 1983 according to McKinsey & Co.
      However, 1995 will be a comeback year for the oil industry. Economics recoveries in Europe and Japan should help boost global demand. Most of the excitement is overseas-both from an exploration and marketing standpoint. There is tremendous exploration going on in South America, the former Soviet Union, the North Sea, Indonesia, and the Gulf of Mexico. And with economic growth of 7.2 percent a year, the Pacific Rim and Asia will be a bigger market than North America by 1997.
      H. Laurence Fuller, chairman of Amoco Corp., summed it up in a recent quote in the Jan. 9, 1995 issue of Business Week, With free trade on the rise, and developing countries thirsty for oil, we're talking about a growth cycle that's unprecedented in history. Just when the doom sayers think they're looking at a sunset for the oil business, they are looking at a sunrise again."
      The majors are beginning to see signs of significant growth, thanks in large part to the cash from the massive restructuring over the past decade. Companies are spending heavily on technologies which will reduce exploration risk, increase productivity in production and operations, and increase efficiency in their environmental efforts. The oil industry has embraced many of the GeoTechnologies, and they will invest heavily in all areas of imaging, GIS, CAD and desktop mapping, and GPS.
      Certainly, the oil industry holds tremendous potential for remote sensing, GIS image processing, mapping and GPS. But, they are not going to spend a penny on this stuff just because it has some great features and technology. We must show them the benefits of implementing these technologies. They will buy-however, for every million dollars they spend on these technologies, we have to be able to show them how they will save three million dollars... or make two million!

And, from the late breaking news department...

Ball Corporation of Broomfield, Colo., and WorldView Imaging Corporation of Livermore, Calif., have agreed to merge WorldView and EarthWatch, Inc., Ball Aerospace and Communications Group's newly formed remote sensing subsidiary. EarthWatch will combine assets from Ball Aerospace and WorldView and initially operate as a Ball majority-owned subsidiary. Ball was awarded a one-meter remote sensing commercial license by the United States Department of Commerce in September 1994. WorldView was granted a three-meter license in January 1993.
      EarthWatch's initial imaging satellite constellation will consist of a two satellite series, each having single-band panchromatic and multi-band color sensors. The first satellite is targeted for a first quarter 1996 launch and has a three-meter panchromatic resolution and fifteen-meter multispectral resolution. The second satellite, scheduled for launch in the third quarter 1997, has high-resolution one-meter panchromatic and four-meter multispectral. The spacecraft will maintain onboard data storage capabilities for later down-linking to three ground stations, including the new data archives and processing facility headquarters in Colorado.

Cheers!

Roland Mangold

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