Proof of Structural Change – Establishment Counts

By Andrew Paparozzi
In November 4, 2009

The soon-to-be-released NAPL State of the Industry, Eight Edition describes the commercial printing industry as “an industry being redefined (by structural change).” The effects of structural change can be found in many of the statistics for the industry, including establishment counts.

The graph below, taken from figure 1.2 of the Report, shows that from 1973 to 1992 the number of commercial printing establishments grew approximately 6% per year, with any losses during recessions (the shaded areas in the chart) being recouped during the following recovery. However, since 1992 the industry has been losing an average of 2.5% establishments per year, leading to a total loss of approximately 16,000 establishments.

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What does that mean for the average printer? As NAPL has long emphasized and contrary to what one would assume, the decline in the number of establishments does not mean competition in the industry is decreasing. Rather, competition is increasing because, as our State of the Industry Report puts it, “the competition is no longer limited geographically—it may be the printer across the country or across the world—or even to other printers—it may be the non-printer who provides an electronic alternative to print.”

Whereas prior to structural change consolidation meant increased market share among recession survivors, now increased market share is not guaranteed to anyone. Among the keys to getting a bigger share of market in an industry being redefined by structural change: Regularly asking and honestly answering questions such as, What are we doing better today than we did two years ago? How are we becoming more valuable to our clients? And what’s stopping us from doing what we know has to be done? (For an in-depth discussion on structural change and what you can do about it, consult the NAPL State of the Industry Report, Eighth Edition.)  

Andrew Paparozzi

Epicomm's Andrew Paparozzi, Vice President/Chief Economist, is well-known for his accurate and thoughtful discussions on the economy and US commercial printing industry. A foremost author and speaker on economic business trends in the printing industry, Paparozzi heads Epicomm's Printing Economic Research Center.

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