Entrepreneurship and Job Growth

This analysis attempts to place existing research about job growth among young, small firms in the context of productivity dynamics. Most research to date has relied on U.S. manufacturing data; this study, however, takes advantage of tabulations from recent, economy-wide datasets.

These datasets use the Longitudinal Business Database (LBD) and the Integrated LBD, which is an extended version of the LBD. Both datasets incorporate the role of non-employer businesses (i.e. businesses that do not yet employ workers) into the job growth dynamics of U.S. businesses.
A review and analysis of the job growth literature from a productivity dynamics perspective reveals that young businesses have much higher net growth and much higher volatility than mature firms. The data also indicate that publicly traded firms exhibit higher net growth and less volatility than privately held businesses and that there has been a decline in overall firm volatility in the U.S. over the last couple of decades.



Finally, a significant fraction of young employer firms have a pre-history as non-employer firms. As a whole, the findings suggest that U.S. business dynamics are characterized by constant change and that young firms exhibit rapid net growth and high volatility.

Download the working paper by John Haltiwanger here.

Why Do Most Firms Die Young?

Here is an abstract of an interestinmg article on the topic...

A theoretical model of firm growth under uncertainty is developed in order to account for the high failure rate of young firms. This model pulls together several strands of the existing literature, including: the portfolio approach to balancing risk and return; a variation on Gibrant's law as a description of the growth process, and human capital as a determinant of entrepreneurial productivity.

Consistent with the observed firm failure distribution, the model suggests that the failure rate first rises steeply and then tails off to a low, long run value. Simply put, the model points to an early death for most firms. One explanation for the initial rise in the failure rate is the depletion of initial financial resources as a result of trading losses and bad luck. The model emphasizes the importance of risk in firm failure. However, closure under risk is modeled as a rational decision by the entrepreneur.

Source:

Cressy, Robert
Why do most firms die young?
Small Business Economics. 2006.
v. 26, no. 2, p. 103-116.

Boomers Retiring Less Wealthy

Indeed, the 78 million Americans born between 1946 and 1964 are on track to replace about 60 percent of their annual incomes after retirement, according to the Fidelity Retirement Index. The national survey by Boston-based mutual fund giant Fidelity Investments also found that boomers set aside an average 4 percent of annual income. So much for maintaining their current standards of living.

Despite the size of their bank accounts, however, many boomers (the oldest of whom turn 60 this year) are unwilling to put retirement plans on hold. With less money to live on and life expectancies on the rise, seniors who failed to feather their nest eggs may have to get creative to make ends meet, says Brent Neiser, a certified financial planner.

Retiring with a small nest egg?
• Go to plan B
• Boost your budget
• Put your house to work
• Maximize investments

Read the full story here.

On Boeing...

The Boeing Company operates as an aerospace company. It operates through six segments: Commercial Airplanes, Aircraft and Weapon Systems, Network Systems, Support Systems, Launch and Orbital Systems, and Boeing Capital Corporation.

The Commercial Airplanes segment produces commercial aircraft and a family of commercial jetliners for passenger and cargo requirements of domestic and foreign airlines. It also offers aviation support, aircraft modifications, spares, training, maintenance documents, and technical advice to commercial customers.

The Aircraft and Weapon Systems segment involves in the research, development, production, and modification of precision engagement, and mobility products and services. The Network Systems segment engages in the research, development, production, and modification of products and services to assist its customers in transforming their operations to be network-centric, as well as to develop missile defense systems.

The Support Systems involves in the operations, maintenance, training, upgrades, and logistics support functions for military platforms and operations. The Launch and Orbital Systems segment provides launch exploration, and satellite products and services. Its programs include space shuttle, international space station, crew exploration vehicle, Delta II and Delta IV launch vehicles, and sea launch joint venture, as well as commercial satellite solutions.

The Boeing Capital Corporation segment provides financing solutions for the space and defense markets. Its portfolio consists of finance leases, notes and other receivables, equipment under operating leases, investments, and assets held for sale or release.

The company also offers two-way data communications service for global travelers; and Boeing Technology, an advanced research and development organization. It has a partnership with Lockheed Martin Corporation.

The Boeing Company was incorporated in 1916 and is headquartered in Chicago, Illinois.

Outsourcing to Grow in Eastern Europe

Eastern Europe could soon become a favourite location for offshore outsourcing, with activity in the region estimated to triple between 2005 and 2008.

That's according to McKinsey and Co, which predicts the business process outsourcing (BPO) industry will support 130,000 jobs in the region by 2008.

Although only one per cent of the world's total BPO spend - worth $30bn - is currently located in Eastern Europe, the region emerged as one of the favourite locations for Western European companies to invest in between 2004 and 2006. McKinsey identifies three main advantages for companies locating BPO operations in Eastern Europe in the winter issue of McKinsey on IT.

The region offers low wage levels, comparable to India, with slow wage inflation looking likely to keep the region economically competitive for at least 15 years.

Also, compared to competing regions around the world, Eastern Europe is a relatively low-risk location for investment due to the reliable infrastructure already in place.

The other benefit is the region's geographical and cultural proximity to Western Europe, making the process of setting up offices much easier. There are also fewer language barriers compared to elsewhere, with German and French both being widely spoken.

Countries such as India, Ireland, Malaysia and the Philippines have until recently been the favoured locations for offshore BPO investment.

Read more here.

Seminoles Bid for Hard Rock

With its $965 million deal to acquire the Hard Rock Café restaurant and casino chain from the British company Rank Group, the Seminole tribe is on the vanguard of what could be a rash of new investment from cash-flush Native American tribes.

Gambling has been very, very good to the tribe, which traces its history in Florida back 12,000 years. Seminole Gaming CEO James Allen says the tribe's Hard Rock Café-branded properties in Tampa, Fla., and Hollywood, Fla., are two of the most successful casinos anywhere in the world. Plus, he says the 3,100 member tribe has diversified its business operations, becoming the seventh-largest producer of cattle in the U.S., Florida's largest tobacco seller, and one of the state's largest citrus producers. The tribe has an investment grade (BBB-) rating from Standard & Poor's.

Because it is a sovereign entity, the Seminoles won't reveal details of its finances. But insiders say the two casinos bring in revenues of nearly $1 billion a year. According to the National Indian Gaming Commission, tribal gambling nationally grew from a $5.5 billion industry in 1995 to a $19.5 billion industry in 2004. With all that money, industry watchers say the tribes are poised to break out from their casino base to begin making acquisitions in other industries. "You're going to see more deals in hospitality. They're looking at media and other entertainment, and I wouldn't be surprised to see amusement parks," said Victor Rocha, editor of the Indian gaming Web site Pechanga.net. "The tribes are cash-rich right now."

Read more here.

How is 2007 Looking?

Standard & Poor's Ratings Services believes that in 2007 the biggest influence on U.S. corporate credit quality will continue to be corporate strategic and financial decisions rather than the economy's performance. S&P still expects efforts to enhance shareholder value, including leveraged buyouts, stock buybacks, and special cash dividends, as well as mergers and acquisitions—and the attendant execution issues—to drive rating activity. This dynamic should continue through next year, especially considering the anticipated continuing high activity of private equity firms and hedge funds.

Consumer spending, always an important part of the economy, should be relatively unaffected through the first part of 2007, despite a slumping housing market and higher interest rates. "Since the summer, lower energy prices have translated into solid sales performance for retailers. Money not spent at the gas pump goes straight to the shopping malls," says Standard & Poor's Managing Director John Bilardello. "But with a negative savings rate and higher levels of consumer debt, the momentum of consumer spending could slow in the latter part of the year, with negative implications for credit quality in some industries."

Further softening in the housing market could hurt building material manufacturers, specialty chemical companies, and forest product companies. A pullback in consumer spending could also temper expectations for higher profit margins in consumer-oriented sectors, as people become more realistic about their spending habits and curtail purchases of furniture, appliances, garden equipment, and other discretionary goods.

Read the full story here.

25 Best Affordable Suburbs

Low crime, reasonable commute, and good schools—who says you can't find a nice house in a suburb without paying a fortune?

Buying your first house? Fleeing the city for a life within your means?

Here's a novel idea: Move to a suburb where you won't break the bank or get your car broken into. A community with reasonable home prices and decent schools. A suburb close to your city job, with a lively downtown of its own.

Read the story here.

Communities Brace for Life After Ford

Ford is shuttering 16 more production plants. Read the story here.

On the financial side...Ford revealed recently an SEC filing that it will expand its restructuring financing package to $22-23 billion from the original $18 billion. The company increased its convertible note offering to $4.5 billion from $3 billion to match investor demand. Ford also boosted its revolving credit to $11 billion, up from $8 billion. The credit is backed by Ford's assets; to enlarge it, the company must pay down debt as per last month's $7 billion term loan agreement or collateralize its 1/3 stake in Mazda Motors. A company spokesman said that latter is unlikely.

Ford's increased credit is Wall Street's largest recorded leveraged loan, $17.5 to 18.5 billion. The credit boost is thanks to "overwhelming support by lenders" according to its SEC filing. Analysts had mixed reactions to the news. Ford shares sank by 32 cents to $7.36.

Read more here.

ED Futures Update

Here it is...the latest ED Futures Update.

There are some good stories in this issue about key industries and companies. Yes, we have been doing a great deal of business and industry research lately, and we wanted to share a little bit with you. Is this information helpful to you? Let us know.

Check it out: ED Futures

Published by Donald T. Iannone & Associates
Cleveland, Ohio

Haynes International, Inc.

Haynes International, Inc., headquartered in Kokomo, Indiana, USA, is a world leader as the inventor, developer, and producer of quality high performance nickel- and cobalt-based alloys.

Haynes International, Inc. is a technology and service oriented company devoted to the development and manufacture of high-performance nickel- and cobalt-based alloys for service in severe corrosion and high-temperature applications. Superior customer service and technical support are provided worldwide by well-trained professionals within the company. Haynes' service centers and affiliates have available in-stock sheet, plate, bar, wire, tubing, forging stock, fittings, and flanges.

Manufacturing Facilities

R&D Facilities

Company Financials

Invacare Corporation

Overview

Invacare Corporation (Invacare) is a global manufacturer and distributor of non-acute healthcare products. The Company designs, manufactures and distributes a line of healthcare products for the non-acute care environment, including the home healthcare, retail and extended care markets.

Its products include standard manual wheelchairs, motorized and lightweight prescription wheelchairs, seating and positioning systems, motorized scooters, patient aids, home care beds, low-air-loss therapy products and respiratory products. Invacare also distributes medical equipment and related supplies manufactured by other companies. The Company's products are sold to over 25,000 home healthcare and medical equipment provider locations in the United States, Australia, Canada, Europe and New Zealand, with the remainder of its sales being primarily to government agencies and distributors.

During the year ended December 31, 2005, Invacare acquired Australian Healthcare Equipment Pty. Ltd., a manufacturer of beds, related furniture and pressure care products for home care and non-acute institutional care; Altimate Medical, Inc., a manufacturer of standing frames and mobility aids for the rehabilitation market, and Medical Support Systems Holdings Limited, a manufacturer of foam pressure-reducing products for the healthcare market.

North America Operations

The Company's North American operations are aligned into five primary product groups: rehab products, standard products, respiratory products, distributed products and continuing care. In Canada, the Company primarily sells Invacare products manufactured in the United States.

The rehab product line comprises power wheelchairs, custom manual wheelchairs, personal mobility products, and seating and positioning products. Invacare manufactures a line of power wheelchairs for individuals who require independent powered mobility. The range includes products that can be significantly customized to meet an individual's specific needs, as well as products that are versatile and meet a range of individual requirements. Power wheelchair lines are marketed under the Invacare Storm Series and Xterra brand names, and include a range of powered mobility products. Invacare manufactures and markets a range of custom manual wheelchairs for everyday, sports and recreational uses. These lightweight chairs are marketed under the Invacare and Invacare Top End brand names. In 2005, Invacare introduced the At'm Quick Transport, an upgrade to the Invacare At'm Take Along Chair, which is the next evolution in portable mobility. Invacare markets seat cushions, back supports and accessories under three series. Invacare Essential Series provides simple seating solutions for comfort, fit and function. Invacare Infinity Series includes versatile modular seating, providing optimal rehab solutions. Invacare PinDot Series offers custom seating solutions personalized for challenged clients. The Company has also expanded its product line of seating products and wheelchairs for the pediatric market.

The standard product line includes manual wheelchairs, personal care products, home care beds, low-air-loss therapy products and patient transport products. Invacare's manual wheelchairs are sold for use inside and outside the home, institutional settings and public places. Its clients include people who are chronically or temporarily disabled and require basic mobility performance with little or no frame modification. Invacare manufactures and/or distributes a line of personal care products, including ambulatory aids, such as crutches, canes, walkers and wheeled walkers. The Company manufactures and distributes a range of manual, semi-electric and fully electric beds for home use under the Invacare brand name. Home care bed accessories include bedside rails, mattresses, overbed tables, trapeze bars and traction equipment. Invacare manufactures and markets a line of mattress overlays and replacement products, under the Invacare brand name. These products, which use air flotation to redistribute weight and move moisture away from patients, assist in the total care of those who are immobile and spend most of the time in bed.

Invacare manufactures and/or distributes home respiratory products, including oxygen concentrators, nebulizer compressors and respiratory disposables, sleep therapy products and portable compressed oxygen systems. Invacare home respiratory products are marketed under the Invacare brand name. The Invacare Venture HomeFill II Oxygen Compressor enables people to safely and easily make compressed oxygen in their home and store it in cylinders for future use.

The Company distributes numerous lines of branded medical supplies, including ostomy, incontinence, diabetic, wound care and miscellaneous home medical products, as well as home medical equipment aids for daily living. During the year ended December 31, 2004, Invacare introduced its own private-label brand of certain medical supplies.

Invacare, operating as Invacare Continuing Care Group, is a manufacturer and distributor of beds and furnishings for the long-term care markets. In addition, certain home medical equipment also is sold through this channel.

The Company also manufactures, markets and distributes many accessory products, including spare parts, wheelchair cushions, arm rests, wheels and respiratory parts. In some cases, the Company's accessory items are built to be interchangeable so that they can be used to replace parts on products manufactured by others.

Asia/Pacific Operations

The Company's Asia/Pacific operations consist of Invacare Australia, which imports and distributes the Invacare range of products and manufactures and distributes the Rollerchair range of custom power wheelchairs and Pro Med lifts, DecPac ramps and Australian healthcare equipment beds, furniture and pressure care products; Dynamic Controls, a New Zealand manufacturer of electronic operating components used in power wheelchairs and scooters; Invacare New Zealand, a manufacturer of wheelchairs and beds, and a distributor of a range of home medical equipment, and Invacare Asia Sales, which imports and distributes home medical equipment to the Asia markets.

European Operations

The Invacare European operations operate as a common market company with sales throughout Europe. Invacare manufactures and/or assembles both manual and power wheelchair products at Invacare UK Ltd. in the United Kingdom, Invacare Poirier S.A.S. in France, Invacare (Deutschland) GmbH in Germany, and Ulrich Alber Gmgh in Germany. Manual wheelchair products are also manufactured and/or assembled at Invacare Portugal, Invacare AG in Switzerland (the Kuschall Range) and Invacare Rea AB in Sweden. Beds and patient lifts are manufactured at EC-Hong A/S in Denmark. Personal care products are manufactured at Aquatec GmbH in Germany and Dolomite AB in Sweden.

Raytheon Corporation

Summary

Raytheon Company and its subsidiaries (Raytheon) designs, develops, manufactures, integrates, supports and provides a range of technologically advanced products, services and solutions for governmental and commercial customers in the United States and abroad.

The Company acts as a prime contractor or major subcontractor on numerous defense and related programs for the United States Government. The Company operates in seven principal business segments: Integrated Defense Systems (IDS); Intelligence and Information Systems (IIS); Missile Systems (MS); Network Centric Systems (NCS); Space and Airborne Systems (SAS); Technical Services (RTSC), and Aircraft. In July 2006, Raytheon acquired Virtual Technology Corporation, a developer of joint, net-enabled command and control and modeling and simulation solutions.

Integrated Defense Systems

IDS is engaged in mission systems integration, providing integrated air defense, maritime and joint battlespace solutions. IDS's international and domestic customer base includes the U.S. Missile Defense Agency (MDA) and the U.S. Armed Forces. IDS consists of business areas, which include Future Naval Capability; Integrated Air Defense (IAD); Missile Defense (MD); International Operations; Maritime Mission Systems (MMS), and Joint Battlespace Integration (JBI).

Future Naval Capability is primarily responsible for the Company's Detailed Design and Integration contract for the DD(X), the United States Navy's next generation, multi-mission naval destroyer. IAD provides air and missile defense (AMD) systems integration efforts within a joint integrated architecture enabling warfighters access to air, sea and ground-based sensors and communication systems, which link together weapons and battle management command and control in a seamless system of open architecture. MD provides mission system solutions for ballistic missile defense. MD's products include system integration, information management, sensor fusion, discrimination and sensor systems.

International Operations in coordination with the United States Government and United States Armed Forces, provides a range of capabilities across integrated air defense, missile defense, maritime and homeland security mission areas to foreign customers. MMS provides sensors to engage capabilities to United States and foreign navies. The MMS Undersea Systems business area includes various undersea sensors and mine countermeasure systems. JBI provides integrated capabilities in surveillance and maritime domain awareness, including maritime surveillance monitoring, situational awareness, knowledge management, information fusion and interoperability with a range of existing systems to detect, identify, track, fuse tracks and information, and disseminate actionable intelligence to appropriate responders.

Intelligence and Information Systems

IIS is a provider of systems, subsystems and software engineering services for national and tactical intelligence systems, as well as for homeland security and information technology (IT) solutions. Areas of concentration include processing, analysis and dissemination of signals and imagery, production of geospatial intelligence, command and control of airborne and space borne platforms, and integrated ground systems for weather and environmental programs. In addition, IIS delivers integrated solutions for government IT requirements and knowledge-driven homeland security solutions for customers worldwide. IIS customers include the United States Air Force and Navy, National Oceanic and Atmospheric Administration (NOAA), National Aeronautics and Space Administration (NASA), National Geospatial-Intelligence Agency (NGA), other federal, civilian and military customers and classified customers. IIS programs encompass a range of products from signal intelligence (SIGINT) sensors (used on platforms, such as the U-2 reconnaissance aircraft) to mission management systems (used to manage operation and data for platforms like the Global Hawk aircraft).

IIS consists of business areas, which include Strategic Imaging Systems (SIS); National Systems; Space Systems (SS); Operational Technologies and Solutions (OTS); Raytheon Information Solutions (RIS), and Tactical Intelligence Systems (TIS). SIS provides automated intelligence systems, information management and automated releasability dissemination systems; architecture design, development and integration; ground systems engineering support, operations/management, advanced data processing technology and algorithms, and multi-level security architecture and accreditation. National Systems business area provides systems and operational support for signals intelligence and multi-INT missions. SS provides satellite command and control software and provides mission and resource management, end-to-end information and network management, and modeling and simulation capabilities to its customers. Areas of concentration include: mission/resource management; real-time mission execution, signal processing and analysis; information management and knowledge discovery, and operations, maintenance and engineering (OM&E) support. SS also works with commercial customers as the ground systems integrator supporting satellites used to support hundreds of television channels to households around the world.

OTS provides information management systems, broadband broadcast systems and operations support through its capabilities, ranging from managing collection systems and large volumes of information securely, to providing operations support to customers at their respective sites. RIS provides IT solutions in technical computing, enterprise systems, e-Commerce and logistics management. TIS provides products and services relating to manned and unmanned SIGINT sensors, ground control of airborne SIGINT sensors, multi-INT ground systems, Unmanned Aerial Vehicle (UAV) ground stations and Intelligence, Surveillance and Reconnaissance (ISR) battle space management.

Missile Systems

MS is a missile manufacturer, developing and supporting a range of cutting edge solutions and products for the armed forces of the United States and other countries. MS consists of business areas, which include Naval Weapon Systems (NWS); Strike; Air-to-Air; Land Combat; Exoatmospheric Kill Vehicle (EKV), and Other MS business areas.

NWS provides defensive missiles and guided projectiles supporting the navies of over 30 countries. Strike business area provides products and services designed to enable United States Air Force and Navy customers to attack, suppress or destroy ground-based targets. Air-to-Air business area provides air-to-air missiles. Land Combat business area provides missiles to the United States Army and more than 25 United States allies. EKV business area focuses on producing the exoatmospheric kill vehicle, the intercept component of the Ground Based Interceptor (GBI) for the Ground Based Midcourse Defense (GMD) system. Other MS business areas include Kinetic Energy Interceptors, which focuses on designing and developing kinetic energy-based missiles that can intercept and destroy enemy ballistic missiles during their boost/ascent and mid-course phases of flight; Advanced Missile Defense, Directed Energy Weapons, which pursues opportunities in the missile defense and directed energy markets, including the development of new kill vehicles, NASA/space applications, discrimination, high-power microwave and high-energy laser systems, and Advanced Programs, which focuses on next generation technology, systems and solutions for a net-enabled battlespace to fill potential gaps in customers' capabilities.

Network Centric Systems

NCS develops and produces net-centric mission solutions for network sensors, command and control, communications and air traffic management, and homeland security. Customers include all branches of the United States Department of Defense (DoD), the Department of Homeland Security, the Federal Aviation Administration (FAA), other United States national security agencies, state and local governments and foreign customers. NCS consists of business areas, which include Integrated Communications Systems (ICS); Command and Control Systems (C2S); Combat Systems (CS); Precision Technologies and Components (PTC); Air Space Management and Homeland Security (AMHS); Thales-Raytheon Systems, LLC (TRS); Raytheon Systems Limited (RSL), and Raytheon Canada Limited (RCL).

ICS provides wireless, high-bandwidth and transformational communications solutions for its customers. C2S develops and provides integrated solutions, systems and supporting services. CS provides integrated ground-based surveillance and target engagement solutions. PTC provides precision optical and electronic solutions, electronic hardware and software products. AMHS provides integrated communications, navigation, surveillance and air traffic management system solutions for both civil and military customers. TRS is a joint venture between Thales Group and Raytheon. TRS combines the two companies' capabilities in Air Command and Control Systems (ACCS), Air Operations Centers and Battlefield Weapon Locating Radar and Military Air Surveillance Radar. RSL, Raytheon's United Kingdom subsidiary, designs, develops and manufactures a range of advanced systems for network-enabled operations, safety critical control functions and precision systems. RCL provides persistent surveillance radar for air traffic management systems.

Space and Airborne Systems

SAS designs and develops integrated systems and solutions for advanced missions, including unmanned aerial operations, electronic warfare, active electronically scanned array radars, airborne processors, weapon grade lasers, missile defense, and intelligence, surveillance and reconnaissance systems. SAS provides electro-optic/infrared sensors, airborne radars, solid-state high-energy lasers, precision guidance systems, electronic warfare systems, and space-qualified systems for civilian and military applications. SAS customers include the United States Navy, Air Force and Army, classified customers and commercial businesses. SAS consists business areas, which include Air Combat Avionics (ACA); Strategic Systems (SS); Precision Attack and Surveillance Systems (PASS); Integrated Airborne Systems (IAS); Electronic Warfare Systems (EWS); Advanced Products Center (APC); Advanced Concepts and Technologies (ACT), and Integrated Technology Programs (ITP).

ACA provides advanced fire control radar, processor solutions and technologies. SS provides space and space-qualified payloads for the intelligence, defense, and civil space communities. PASS provides maritime surveillance radars and electro-optical and infrared sensors for surveillance, reconnaissance and targeting mission support. IAS provides advanced intelligence, surveillance and reconnaissance (ISR) sensors and system solutions for multiple national and international customers and prime contractors. EWS provides aircraft/shipboard self-protection systems to counter threats and enhance survivability. APC provides high performance transmit/receive modules for multiple active array radars. ACT conducts internal research and development for SAS and contract research and development. ITP provides a range of product families and engineering services.

Technical Services

RTSC, headquartered in Reston, Virginia, provides technology solutions for defense, Federal government and commercial customers worldwide, specializing in mission support, counter-proliferation and counter-terrorism, customized engineering and manufacturing services and base and range operations. RTSC also provides logistics support to Raytheon products and systems in the field. RTSC customers include all branches of the United States Armed Forces, NASA, the U.S. National Science Foundation, other governmental agencies and foreign governments. RTSC consists business areas, including System and Product Support Solutions (SPSS); Logistics and Training Systems (LTS); Engineering & Production Support (EPS); Depot Operations (DO), and Polar Services.

SPSS also specializes in logistics systems engineering, as well as civil, logistics, reliability and maintenance and safety engineering. SPSS provides technical, installation, maintenance and site integration work on major command and control systems, including telecommunications upgrades. LTS provides logistics, supply chain management, training, classified and unclassified operations and maintenance support services. EPS offers a spectrum of engineering and limited-production services, including Capability Maturity Model Integration (CMMI) level 4 software engineering. DO operates repair and maintenance depots. Polar Services business area specializes in base and range services, providing science support, operations, IT and communications systems, logistics, and facilities engineering and construction services and support to the United States Antarctic Program (USAP).

Aircraft

Raytheon Aircraft Company (RAC) designs, develops, manufactures, markets and provides global support for business jets, turboprops and piston-powered aircraft for the world's commercial, fractional ownership and military aircraft markets. RAC markets its aircraft under its Beechcraft and Hawker brands. In 2005, RAC introduced six derivative aircraft models, including the Hawker 800Xpi, Beechcraft Premier IA, Beechcraft King Air C90GT, Beechcraft Bonanza G36, Beechcraft Baron G58 and an increased gross weight Beechcraft King Air 350.

RAC's jet line includes the Hawker 800Xpi midsize jet, the Hawker 400XP light jet, and the Beechcraft Premier IA entry level light jet. RAC's turboprop line includes the Beechcraft King Air 350, King Air B200 and King Air C90GT. RAC's piston powered aircraft line includes the twin engine Beechcraft Baron G58 and the single-engine Beechcraft Bonanza G36. In addition, the Beechcraft T-6A Texan II serves as the military trainer for the United States Air Force and United States Navy's Joint Primary Aircraft Training System (JPATS), as well as for certain foreign countries' air forces. RAC also markets, produces and supports a range of special mission aircraft for military and governments worldwide. RAC also operates a network of fixed-base operations (FBOs), providing business aviation services at airports throughout North America, the United Kingdom and Mexico. In addition, RAC provides and distributes spare parts through warehouses in Dallas, Texas and Liege, Belgium.

Other

The Other business segment consists of business areas, which include Flight Options LLC (FO); Raytheon Airline Aviation Services LLC (RAAS), and Raytheon Professional Services LLC (RPS). FO offers services in the fractional jet industry, including programs for ownership shares of new and used aircraft, aircraft leasing, and aircraft for certain time periods. RAAS manages the long-term wind-down of the Company's commuter aircraft business, which includes aircraft in inventory, leased aircraft and notes receivable for financed aircraft. RPS provides integrated learning solutions to commercial and government organizations worldwide.

Major Computer Storage Device Companies

1 EMC Corporation
2 Seagate Technology
3 Micron Technology, Inc.
4 SanDisk Corporation
5 Western Digital Corp.
6 Brocade Communications Systems, Inc.
7 Imation Corp.
8 Komag, Incorporated
9 Xyratex Ltd.
10 Hutchinson Technology Incorporated
11 Intevac, Inc.
12 Quantum Corporation
13 Iomega Corporation
14 LaserCard Corporation
15 Dot Hill Systems Corp.
16 Ramtron International
17 Overland Storage, Inc.
18 Dataram Corporation
19 Qualstar Corporation
20 MTI Technology Corporation
21 Ciprico Inc.
22 Procom Technology, Inc.
23 Cambex Corporation
24 Storage Computer Corporation
25 Exabyte Corporation
26 Storage Engine, Inc.
27 Merlin Software Technologies Int'l, Inc.
28 DISC, Inc.

Industry SnapShot: Computer Storage Devices

Significant cost reductions and performance enhancements have driven growth in the US computer storage devices sector, which grew at around 7% during 2003. It is forecast to continue its strong growth into the next five years, boosted by significant demand from the consumer electronics sector, resulting from the huge demand for smaller, high capacity MP3 players.

The disk-based segment is estimated to account for an 85-90% share of the US sector although the DVD-R (DVD writer) market is predicted to witness high growth in 2005, fuelled by both the home and business desktop market and the introduction of improved video editing software. Other growth areas include devices for the SAN (storage area networks) and NAS (network attached storage) systems. However, growth in the magnetic/optical media market has slowed down.

Consumer electronics are expected to significantly drive up demand for the storage drive, driven by the growth of MP3 players and compelling storage device companies to invest into new technologies such as nano-engineered storage technology and holographic technology to provide low-cost, high capacity devices. The introduction of legislation requiring more transparent business procedures in the US will increase the demand for high-capacity storage in the commercial sector, with companies needing to efficiently store business information from previous years to comply with regulations.

Top players in the sector include EMC, Seagate Technology, Maxtor Corporation, Western Digital Corporation, HP and Hitachi. EMC enjoyed a global market share of about 14.4% during 2004. Several leading storage device manufacturers have entered the information lifecycle management market introducing tiered storage solutions to provide a higher value proposition for customers.

Key Issues

Compliance Driven Growth - A large part of the growth predicted for the industry is expected to be driven by investments in storage systems to meet compliance requirements for laws designed to help companies preserve information. These laws include the Sarbanes-Oxley Act and the Health Insurance Portability and Accountability Act (HIPAA), which are leading companies to adopt better data-handling practices.

Consolidation Amongst PC Manufacturers - The PC business, the largest customer segment of the computer storage devices industry, is consolidating. Mergers and acquisitions in the PC business (including the HP-Compaq merger and the IBM-Lenovo deal) have resulted in the formation of large clients, with large economies of scale and thus higher bargaining power. This is expected to further reduce margins for storage device manufacturers.

Increasing Hard Disk Demand - As hard drives find their way into more consumer electronics products, the demand for small yet high capacity hard drives will increase. Consumer electronics is expected to drive sales in this segment, accounting for a third of the hard-drive market by 2008, compared to 5% in 2003. Storage device manufacturers will need to focus on reducing the total cost of ownership of electronic gadgets to fuel growth.

Storage Commoditization - In 2005, commoditization is expected continue to impact storage systems, with low-cost, high-capacity drives accounting for almost 20% of storage array capacity, and 11% of overall revenue. This capacity-revenue differential could lead to higher price erosion.

Significant Trends

Information Lifecycle Management - Storage device manufacturers have entered the information lifecycle management market, a concept enabling priority based, tiered data storage. Both EMC (through the acquisition of LEGATO Systems, in 2003) and Seagate Technology (September 2004) have already introduced tiered storage solutions. The combination of different elements within the storage environment may lead to a higher value proposition for customers.

Growth in Miniatures - Players in the industry are increasingly shifting their focus towards miniature-sized disk drives. Not only are the size of the disks shrinking, their capacity is increasing. The growing number of products in the miniature disk drive market is expected to develop to meet the demand of the portable electronics manufacturers.

New Technologies - Storage device companies will be investing in new technologies such as nano-technology and holographic technologies to meet a growing need to reduce the cost and size of storage devices. By 2011, the nano-engineered information storage devices market is expected to be worth $65.7 billion, accounting for about 40% of the disk drive and memory chip businesses. These technologies will blur the boundaries between disk drives and memory chips, thus providing a low-cost replacement for minidisk drives in portable entertainment devices and computers.

How Large is the Incubator Industry?

According to the National Business Incubation Association, as of October 2006, there were over 1,400 incubators in North America, up from only 12 in 1980. Of those, 1,115 were in the United States, 191 were in Mexico and 120 were in Canada.

NBIA estimates that there are about 5,000 business incubators worldwide. The incubation model has been adapted to meet a variety of needs, from fostering commercialization of university technologies to increasing employment in economically distressed communities to serving as an investment vehicle.