Sunrise Industry

AAA

DEFINITION of 'Sunrise Industry'

A colloquial term for a sector or business that is in its infancy, but is growing at a rapid pace. A sunrise industry is typically characterized by high growth rates, numerous start-ups and an abundance of venture capital funding. Sunrise industries generally have plenty of "buzz" surrounding them as public awareness about the sector increases and investors get attracted to its long-term growth prospects.

BREAKING DOWN 'Sunrise Industry'

Examples of sunrise industries include alternative energy in the period from 2003 to 2007, and social media and cloud computing in 2011 and 2012.

A sunrise industry is often characterized by a high degree of innovation, and its rapid emergence may threaten to push into obsolescence a competing industry sector that is already in decline. Because of its dim long-term prospects, such an industry is referred to as a sunset industry.

Over a period of years or decades, as an industry grows and matures, it may pass from the sunrise phase to maturity and, finally, the sunset stage. The compact-disc industry is a typical example of such a transition. It was a sunrise industry in the 1990s as compact discs replaced vinyl records and cassette tapes, but the rapid adoption of digital media in the 21st century could mean that the compact-disc industry's days are numbered.

The transition from the sunrise to sunset stages is likely to be more rapid in dynamic sectors, such as technology.

RELATED TERMS
  1. Infant-Industry Theory

    The supposition that emerging domestic industries need protection ...
  2. Market Penetration

    A measure of the amount of sales or adoption of a product or ...
  3. Sector

    1. An area of the economy in which businesses share the same ...
  4. Mature Industry

    An industry which has passed both the emerging and the growth ...
  5. Industry

    A classification that refers to a group of companies that are ...
  6. Growth Stock

    Shares in a company whose earnings are expected to grow at an ...
Related Articles
  1. Investing Basics

    Industry Handbook

    In this feature, we take an in-depth look at the various techniques that determine the value and investment quality of companies from an industry perspective.
  2. Fundamental Analysis

    Great Expectations: Forecasting Sales Growth

    Predicting sales growth can be something of a black art, unless you ask the right questions.
  3. Markets

    Is Growth Always A Good Thing?

    Getting big quickly looks good, but companies can get into trouble when they do it too fast. Find out how to spot this trouble.
  4. Markets

    Great Company Or Growing Industry?

    Look at the big picture when choosing a company - what you see may really be a stage in its industry's growth.
  5. Forex Education

    How To Use The P/E Ratio And PEG To Tell A Stock's Future

    While the price-to-earnings ratio is commonly used for assessing stock prices, the price/earnings-to-growth ratio offers forecasting advantages that investors need to know.
  6. Entrepreneurship

    Top 5 Startups that Emerged in Toronto

    Learn how Toronto has built a fertile climate for startups, and identify some of the top companies to emerge from the city's hot startup market.
  7. Entrepreneurship

    Top 5 Startups that Emerged in London

    Learn why London's startup scene is so prolific, and identify some of the hottest companies emerging from this scene as of mid-2015.
  8. Active Trading Fundamentals

    The 4 Biggest Private Equity Firms in London

    Discover information about the largest private equity firms that are headquartered in London, ranked by total assets under management.
  9. Retirement

    Retirement Planning for Entrepreneurs and Small Businesses

    If your business has receiveables, here's a smart way to leverage them to build up your retirement fund fast.
  10. Investing

    The 8 Best Business and Finance T.V. Shows

    With so many talking heads to choose from, which is the right show for your business and money matter needs? We review the best shows on now.
RELATED FAQS
  1. How do you find the break-even point using a payback period?

    It does not make sense to find the breakeven point using a company's payback period. A company's payback period is concerned ... Read Full Answer >>
  2. What is considered a reasonable interest rate for a syndicated loan?

    A 2010 survey of syndicated loans found an average interest rate of 7.9%. However, the majority of syndicated loans are floating ... Read Full Answer >>
  3. Can I buy insurance to reduce unlimited liability in a partnership?

    Partnership insurance is actually quite common. Most of the time, partners buy insurance to safeguard against the possibility ... Read Full Answer >>
  4. How strong are the barriers to entry for new companies in the telecommunications ...

    The barriers to entry for new companies in the telecommunications sector are very strong and primarily revolve around the ... Read Full Answer >>
  5. What are the benefits of prorating expenses?

    When a person prorates expenses between personal and business expenses, he is able to capture the maximum amount of tax benefits ... Read Full Answer >>
  6. What is the relationship between research and development and innovation?

    Although it's possible to achieve innovation without research and development and it's possible to conduct research and development ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Bubble Theory

    A school of thought that believes that the prices of assets can temporarily rise far above their true values and that these ...
  2. Stock Market Crash

    A rapid and often unanticipated drop in stock prices. A stock market crash can be the result of major catastrophic events, ...
  3. Financial Crisis

    A situation in which the value of financial institutions or assets drops rapidly. A financial crisis is often associated ...
  4. Election Period

    The period of time during which an investor who owns an extendable or retractable bond must indicate to the issuer whether ...
  5. Shanghai Stock Exchange

    The largest stock exchange in mainland China, the Shanghai Stock Exchange is a nonprofit organization run by the China Securities ...
  6. Dead Cat Bounce

    A temporary recovery from a prolonged decline or bear market, followed by the continuation of the downtrend. A dead cat bounce ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!