As the recession tightens its icy fingers around the neck of the business community, companies study their balance books with increasing trepidation.

A reduction in liquidity, squeezed budgets and increasing demands on employees’ time all add up to a difficult outlook for business across the region.

But where many firms see dark days ahead, one sector of Birmingham’s business community look upon the worsening economic climate with optimism.

Mark Dolphin, of video conferencing company Dolphin Media, says the recession has been “manna from heaven” for his industry.

“People are increasingly seeing the value of our services,” he explained. “We save them money by offering the chance to host meetings without the expense of travel; we boost their environmental credentials by cutting down their carbon footprint, and, with the credit crunch hitting, we offer a good way of impressing your directors with cost-cutting initiatives.”

From their headquarters in Birmingham’s Camp Hill industrial estate, Mr Dolphin installs and maintains audio visual technologies, as well as providing rooms for the business community to hire for video conferencing meetings. And he said the increasing sophistication of video conferencing technology meant the picture quality has improved, while IP connections meant call costs were reduced.

“Video conferencing has gone from being a boardroom toy, for the CEO to talk with his golfing buddies, to a serious tool. Previously it was something companies saw as being ‘nice’ to have: now it is essential.

“Many large firms have already installed video conferencing systems into their own premises, which means that often their increased usage of the technology is invisible to the market.

“But we are seeing a rise in demand from recruitment companies as well as big pharmaceutical and legal firms. Legal firms increasingly turn to us because legal aid will not pay for all travel costs.

“I believe that we are really witnessing the start of something very important. We predict that between 2008 and 2010, 30 per cent of all business meetings will be virtual. The recession has given our industry the jump-start it needs.”

Jane Wrin, operations director of Eyenetwork – a national company which has nine partner studios in Birmingham – agrees the credit crunch is causing businesspeople to think more seriously about video conferencing.

“There has definitely been a tightening of belts in all sectors, but we have seen that an increasingly broad range of clients come to us for our services,” she said.

“We now have all types of industries: food, electronics, banking, barristers, universities and charities. We have noticed a real increase in the number of

retailers and food businesses using our services, where as previously it was considered essential to travel to meetings, taste the food and touch the products.

“Obviously we are not saying that video conferencing will completely replace face-to-face meetings: meeting in person with that ‘man from Delmonte’ moment is still important. But we have noticed a realisation that this is not essential for every single meeting.”

And Emma Jennings, director of The Studio, based on Cannon Street, said rising unemployment was causing an increase in interviews for international positions.

“We’ve been in Birmingham for seven years now, and always had a wide range of clients across the board. But increasingly we are seeing companies seeking to interview people from Australia or New Zealand, at strange hours in the middle of the night. There are certainly more requests for equipment now.”

But Steve Wall, who operates a video conferencing studio in Birmingham in partnership with Eyenetwork, sounded a note of caution.

“We have actually seen our business drop here in the last few months. I think that the long-term future of videoconferencing is secure, but in the short term the effects of credit crunch can’t be ignored by any business.”

Mr Wall pointed out that as the number of businesses dwindles and demand for international trade drops, then the video conferencing business will be hit as hard as every other industry.

“Since we began our business in January 2005 we have been doing well and growing, but in the last few months things have got more difficult. The cost of actually operating as a business has risen, and you can’t operate in a bubble. We are finding things tough too.”

* Virtual conferences no substitute for face-to-face meetings

The man from Del Monte was thrown a lifeline from an unexpected source. For while a director of one of Birmingham’s leading video conferencing companies may have been expected to forecast the end of long-distance

business travel, she said that there would always be a need for that meeting in the plantation.

“You can’t escape the need to meet in person, shake hands on the deal,” said Jane Wrin, of Eyenetwork. “But we believe that it is not essential to fly around the world every time you need to meet. Once, yes – but every fortnight, certainly not.”

Though video conferencing professionals say that they are not trying to be a substitute for all business reunions, there is no denying that video conferencing has become increasingly prevalent as a business tool.

Simple analogue video conferencing has been around ever since the invention of television in the late 1920s. Two closed-circuit television cameras were joined by a cable, enabling primitive virtual conferencing.

But quality was poor and the expense was prohibitive for most companies. NASA used a system of video conferencing for their early manned spaceflights, using radio frequencies, but usage was not widespread.

Films such as Flash Gordon and 2001: A Space Odyssey showed video calls from outer space, but the reality was far more mundane. The 1964 movie Seven Days in May showed Burt Lancaster talking over a video link in his office to fellow members of the Joint Chiefs of Staff, but real government and business usage had to wait until the 1990s, with the advent of video compression technology that delivered reasonable quality video over commercially available data circuits.

Since then, progress has been made steadily in quality of image and ease of use.

In 1998, during the opening ceremony of the Winter Olympics at Nagano in Japan, video conferencing was used for a conductor to control five orchestras in five continents simultaneously.

And now teachers regularly give lessons to several classes of pupils at disparate locations; doctors consult about best operating procedure in surgeries thousands of miles apart, and judges hear witness’s testimonies from the other side of the world.

In business, the benefits are obvious. Less time and money is spent on travel, while the reduction in air miles cuts carbon footprints. Executives spend less time travelling to and from meetings, and more time discussing proposals.

And yet, despite the increasing popularity of video conferencing, most businesses admit there is no substitute for actually meeting in person – at least once.

The man from Del Monte may be making many of his agreements in cyberspace, but he hasn’t hung up his Panama hat just yet.