Survey respondents expect the U.S. market to provide the highest percentage of revenue growth and employment growth over the next 12 months. China, Brazil and India follow the U.S. in revenue, while India and China are second and third in employment.
In the 2010 KPMG survey, the U.S. market was ranked third in expected revenue growth and fourth in employment growth. In addition, tech leaders this year predict the U.S. also will have the industry's greatest percentage of research and development investment growth, followed by India and China.
"Technology executives clearly see a sustained recovery and a strong appetite for technology related purchases by U.S. companies and consumers, which helped raise the position of the U.S. market. Coupled with demand from emerging market countries, this combined opportunity bodes well for the industry," said Gary Matuszak, partner, global chair and U.S. leader for KPMG's Technology, Communications & Entertainment practice. "They also intend to take advantage of their strong liquidity and cash positions by investing in emerging technologies and new business models, like Cloud, and new products and services, as well as M&A to drive revenue."
The tech industry executives also may be buoyed by information technology spending in the banking and retail industries. Executives in KPMG business climate surveys in both of those sectors identified technology as the number one area for investment.
In looking at revenue, many of the technology industry survey respondents (77 percent) expect the overall revenue at their companies to be higher one year from now. Technology executives again this year said their biggest revenue driver over the next three years will be cloud computing. In fact, KPMG's survey results show 65 percent ranked cloud computing as the top driver, a sharp jump from the 54 percent in last year's survey. The second and third ranked revenue drivers in this year's survey were mobile applications and advanced data analytics.
M&A Still Hot
More than 8 out of 10 technology executives believe their companies will be involved in a merger or acquisition during the next two years with 68 percent likely involved as a buyer and 15 percent as a seller. Those surveyed also said that access to new technology and products (69 percent), and product synergies (50 percent) will be the most important drivers of alliances, mergers and acquisitions over the next 12 months. This is consistent with the executives' expectation that their companies will increase spending the most over the next year in new products, R&D, and acquisitions.
"The industry has seen the rise of many innovative companies in the past few years. However, this is somewhat tempered by an overhang of the U.S. downturn, as technology leaders now project the U.S. economic recovery to take hold in 2013 or beyond, indicating full economic recovery remains at least two years away," said Matuszak. "There clearly is a continuing delay in their view of the U.S. economic recovery. Last year, the survey respondents predicted that the overall U.S. recovery would take hold in 2012 while in our 2009 survey executives believed it would begin to take hold in 2011."
Less Optimism about Headcount
In the 2011 survey, 49 percent of the tech leaders anticipate their companies' headcount increasing over the next year compared to 42 percent who actually increased headcount in the last year. In the 2010 survey, 72 percent of executives anticipated increases in headcount over the next year. Also, while 27 percent of the tech executives said their headcount already has reached or exceeded pre-recession levels, 42 percent said their companies' headcount would return to pre-recession levels over the next 18 months, and 21 percent said headcount will never return to those levels.
KPMG Technology Industry Business Climate Survey
The KPMG survey was conducted in the U.S. in May-June - 2011 and reflects the responses of 102 primarily C-level and senior executives in the hardware and software computer industry. Of the 102 respondents, 71 are in companies with revenues exceeding $1 billion and 31 are companies with revenues in the $100 million-$1 billion range.
