Tech execs downbeat but striving to recover

Cost-cutting giving way to investment despite pessimism about economy, report finds

Confidence down but investment rising

One in four senior executives in the technology, media and telecoms sector is less confident about the economy now than they were at the beginning of the year, according to a new international study.

The research, conducted by international law firm Eversheds, shows that executives in technology, media and telecoms businesses are becoming more downbeat as the year progresses. But it also shows that businesses in these sectors have been most focused on seeking new market segments to aid recovery over the past 18 months.

Eversheds’ Tools for Recovery report, which captures the views of more than 1,000 senior business figures across China, the US, Europe and the United Arab Emirates (UAE), also found that businesses in the technology, media and telecoms sector are planning to invest in three key areas in the year ahead - customer relationship management activity (55 per cent), seeking new market segments (41 per cent) and avoiding red tape (39 per cent).

This follows some tough decisions during the past 18 months, with 48 per cent cutting discretionary spending and 30 per cent making redundancies.

“Many companies in the sector have survived and some have even thrived. The question is how?” said Charlotte Walker-Osborn, partner and head of the technology media and telecoms sector at Eversheds. “The findings show that there are encouraging signs of a general trend towards reducing cost-cutting measures in the year ahead and a greater desire to invest and focus on growth.”

Pessimism is most pronounced in the US, where confidence levels have dropped since the beginning of the year, while optimism in the East continues to soar.

Businesses in the US have taken the least proactive approach to combating the challenging economic climate, finds the report, while businesses in China and Russia have led the charge in trying to drive demand, by searching for new market opportunities.

China is also leading the way in international expansion, with almost three-quarters of those surveyed looking to expand into an average of more than two foreign markets in the next 12 months. Meanwhile, just 18 per cent of companies in the US are seeking out international opportunities.

Eversheds is inviting businesses to share their opinions on the report.