Editor’s note: Eric Jackson, the founder of DeepWeave Technology Consulting, has built his career pioneering software solutions to particularly large and difficult problems. He writes a regular column for LTW titled “Going Deep” which is published on Tuesdays.

BLACK MOUNTAIN,Although the recession officially ended about two years ago, very slow growth, the continued decline of significant traditional industries, the lack of new jobs, jitters over military and security issues, and the growing losses offshore of jobs that were once thought to be our future source of stability — all these have combined to continue dampening economic spirits in this country.

But it seems that things are finally beginning to turn around.

As we approach 2004, I would like to sound a note of strong and enthusiastic optimism about the future. At the same time, I want to warn of a need for some clear-headed facing of new realities.

There is no doubt in my mind that this next year will not only continue the recovery, it will also offer chances for significant growth to companies willing to take intelligent risks to stay ahead of the curve. I suspect, in fact, that the smartest companies have been preparing for the last 12 months, since this recovery has been in the making for some time — the rest of us will have some catching up to do. The country generally, and the Southeast in particular, has tremendous productive capacity, temporary surpluses of many kinds of highly qualified workers, and a significant backlog of innovation coming out of the universities and government labs.

There are opportunities to be found in some of the challenges that have appeared over the last few years. Security is and will continue to be an area of tremendous activity in a wide variety of industries. The change in standards brought about as a consequence of the Sarbanes-Oxley legislation will provide some new opportunities, some helping companies achieve compliance, some for those that choose to move beyond compliance to discover how transparency and effective use of their boards can be sources of real competitive advantage.

Many technologies are at the cusp of becoming major drivers of innovation, from the continuing explosive growth of storage to the myriad forms distributed computing (like web services, peer-to-peer networks, and grid computing), from RFID tagging and sensor networks to the tremendous potential of nanotechnology to the explosion of mobile bandwidth. All of these technologies present opportunities and offer the potential of new paradigm shifts in a variety of areas. We will be discussing many of these further in the months to come.

It is likely to be an exciting time.

The new realities

At the same time, our enthusiasm must be tempered by the recognition of some of the new realities.

The first is not really new, but is something that tends to get lost in our constant focus on the new. Every period sees its discoveries of new ways to think about business, new strategies for building competitive advantage. It is a mistake, however, to see this as simply a search for the latest, greatest new thing. Rather, the longer-term winners of each period are those who are able to integrate all the previous experience and then come up with an innovative twist. Everything that has come before, teams and quality circles and learning organizations and reengineering and TQM and so on, each offers important insights and elements that must be integrated in future successful business thinking. And, of course, all of it must be built on the ultimate foundation of business: creating something of real value that can be sold for more than it costs to create.

The global economy

The second new reality is the increasingly globalized economy, which brings tremendous opportunities — new markets, lower-cost supply sources, and fuel for innovation both in human terms and in terms of the creative capital that comes from strong competition.

The global economy also brings with it a new world and new level of competition. No longer just sources of raw materials and cheap labor, countries all over the world are successfully making inroads into every kind of industry and technology. Industries are becoming shorter-lived, as the cycle from initial innovation to commoditization continues to shrink. In the long run, a broader playing field, richer competition and stronger drivers of innovation can improve economic opportunities for everyone. Uncomfortable as the changes are, this is almost always true. But we must be willing to change and play by the new rules.

Along with globalization, a variety of factors are bringing about fundamental changes in many industries, from manufacturing to music to energy. The inevitable and natural reaction in these industries is to seek protection from the changes. As changes hit your industry, your initial reaction is likely to be the same. But is is vital to move beyond protectionist thinking, whether the threat is overseas or on college campuses or simply in new companies making new rules. While you are focusing your energy on protecting your way of doing things, someone out there is figuring out how to embrace the changes to create more value for lower cost.

Finally, as we gear up for growth, we will increasingly feel the strain of an inadequate workforce. Lifetime education and training, as well as creative ways to attract and welcome foreign talent, will become vital issues in both public and corporate policy (see my earlier column on workforce development at www.localtechwire.com/article.cfm?u=6092 ).

There is much to be hopeful about. And at the same time, companies (and regions) that choose not to face these new realities are in for a short-lived period of prosperity, at best.

Eric Jackson is the founder of DeepWeave. He has built his career pioneering software solutions to particularly large and difficult problems. In 2000, Eric co-founded Ibrix, Inc. He is the inventor of the Ibrix distributed file system, a parallel file storage system able to scale in size and performance to millions of terabytes.

DeepWeave: www.deepweave.com