BY MIKE WILKINSON
President and Chief Executive Officer,
Paragon Innovations Inc.,
Plano, Texas

This year Paragon's year-to-date revenue has increased by 25 percent-even while the economy is in the doldrums. Paragon specializes in the design, development and documentation of embedded systems in commercial and consumer technology products. Even though we've posted revenue growth this year, the plummeting of Internet stocks and the dramatic downturn in technology spending have affected us and many other companies. However, I believe the technology industry soon will experience calmer waters, with the embedded systems industry following in its wake.

Why? Because I think that the market is overreacting. Consumers crave technology, and they're willing to pay for it. Especially as Christmas approaches, the technology industry should experience a boost.

Most electronic devices contain embedded systems. Computers, cellular phones, cardiac monitors, even coffee makers house a "system within a system." In fact, the World Semiconductor Trade Statistics blue book estimates that there are 5 billion embedded microprocessors in use, resulting in a 94 percent share of the world market. By comparison, PC processors occupy only 6 percent of the market.

My optimism doesn't obscure that our industry must overcome some real challenges. Market perceptions directly affect a company's bottom line. And the embedded systems industry-which, by nature, experiences a six-month time lag- is feeling the effects of the nation's economy.

During the past few years, every industry was demanding embedded system design. Telecom, semiconductor, medical, oil and gas-you name it. But as spring approached, our clients reacted to the sliding market by pulling their projects. Most of them are playing defense. They're not cutting projects, just rethinking their business strategies. This change of events necessitated a new sales strategy. Instead of blanketing all industries with sales calls, we're now focusing on the medical, oil and gas sectors.

One of Paragon's greatest strengths is the detailed, comprehensive and systematic documentation of projects. Embedded system design must be thoroughly documented in order for companies to manufacture a product without redesigning the wheel. Thus, we insist on giving clients a complete, step-by-step blueprint of the product's design and development. Certainly, we face some tough months ahead, but I'm confident that the industry is destined to strengthen, grow and mature into a formidable market player, as long as we keep our eyes on the horizon.

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