What is a sunrise industry?
A sunrise industry is characterized by high innovation and rapid growth, which may threaten an existing industry sector that is already declining and facing obsolescence. The declining industry sector is called a sunset industry because of its dim long-term outlook.
The term was coined in 1983 to describe the emerging and prosperous manufacturing sectors that were believed to be the basis of the future economic rise. It is also used as the antonym of the term "sunset industry." The transition from sunrise to sunset stages is likely to occur faster in industries with high competition, such as telecommunications.
Sunrise Industry Explained
A market that is growing and evolving over a long period of time will eventually reach a point of maturity and decline. This is the case for the compact disk industry, which was a new and promising market in the 1990s when it replaced older formats like vinyl records and cassette tapes.
However, the advent of digital and online media in the 21st century has made the compact-disk industry obsolete and outdated. In sectors like telecommunications, where competition is fierce, the market life cycle is likely to be shorter.
The initial hype around a new market does not guarantee its success or viability. The market may be driven by speculation and expectations rather than actual business activity.
Life Cycle of Sunrise Industry
The sunrise industry is a new and emerging sector that has a high growth potential and a small but growing customer base. The products offered by the sunrise industry are innovative and novel, but they may not have widespread practical applications or commercial viability yet. As the industry matures, it reaches a stage where the growth rate slows down, but the customer base expands and becomes more loyal. The products become more standardized and accepted by the market. This stage is called the maturity stage. When the industry declines, it enters the sunset stage, where the growth rate is negative, and the innovation is minimal. The products become obsolete and lose their appeal to the customers