The lack of industry venture funding and drop in R&D has surprisingly led to a stronger DemoEven though the Demo Conference is a two-day event, it also is a yearlong (and sometimes longer) process of discovery that provides extensive data about the state of the technology marketplace. This is especially true for\u00a0Demo 2004, to be held Feb. 15-17 in Scottsdale, Ariz.Demo scours the marketplace, seeking innovations - inside start-ups and major companies, or research and development projects in corporate and university labs. You can tell a lot about how much is being invested in innovation by the number and variety of companies vying for a spot at the conference. For example, in the late 1990s more than 1,500 companies visited with Demo producers, seeking one of about 100 conference spots.Then, in 2001, venture funding all but dried up. Established companies redoubled their efforts with existing products and focused on existing customers. Research labs suffered shortfalls in funding. Demo has felt the repercussions of this belt-tightening; the parade of potential demonstrators has been shorter and the so-called hangers-on who hop from conference to conference stopped showing up.Surprisingly, this has made for a better conference and a better industry. The people, products and companies in the technology arena are fewer but better. Products coming to market meet real business needs. The companies that developed these products might have been funded in the boom, but were forged by the new economic reality that eschewed hype and "brand building" in favor of attention to customers.Now we come to the eve of 2004, the much-anticipated rebound. As much as Demo looks to the future, Demo 2004 will be shaped significantly by the past. At the halfway point in the demonstrator-selection process, it's clear that the paucity of funding for new ventures 18 to 24 months ago is affecting the flow of innovation to market today. We will bring the best and brightest to Demo 2004, to be sure. I've already identified outstanding products that will have critical effect on enterprise computing, application development and management, collaboration, security and more. What's striking, though, is that at the exact moment the marketplace is beginning to buy, there are fewer technology vendors in the market to sell.It's still anyone's guess what effect this situation will have on the coming year. Perhaps the few, strong, start-up technology providers will gain traction with enterprise customers more quickly. Perhaps enterprise customers, twice shy after suffering boom-era burns, will stick with their tried-and-true vendors. Perhaps an active enterprise technology market will spur new investment in innovation. It will. And we'll see those innovations at Demo 2006.If you are using technology innovation to your competitive advantage today, however, Demo 2004 is the place to be to see the best the market has to offer. For more information on Demo 2004, visit www.demo.com.Shipley is executive producer of the Demo Conferences and a veteran technology watcher. She can be reached at email@example.com.