Five hundred reasons to be optimistic in the new year

Eugene Lacey: Despite a challenging economy, Europe's best up-and-coming technology companies are managing a growth spurt. As we approach 2003, they are 500 reasons to be cheerful.

With market gloom draping shroud-like over Europe's information technology industry you might be tempted to think it would be hard to find 500 fast-growing tech companies right now. You would be wrong.

The companies identified by Deloitte & Touche in its European Technology Fast500 list of the continent's fastest-growing tech firms have enjoyed an average growth rate of 528 percent over a three-year period. The top five performers had a stratospheric growth rate of 12,747 percent, up from 10,105 last year, and the winner, Danionics (a Danish manufacturer of batteries for the iPaq), grew at a breakneck 33,879 percent.

The UK was Europe's best-performing country and home to the largest number of companies in the Fast 500. The UK's top placing was Cambridge Display Technology (CDT), which came in fourth with 4,786 percent growth. CDT, which licenses its patents and technologies to other companies, is working on polymer organic light-emitting diode (OLED) display technology, which promises thinner, lighter and less power-consuming displays than today's LCDs.

Bristol University spin-off Advanced Transport Systems came in at number nine. ATS is about to launch its first electronic taxi service in Cardiff, and is in talks with Heathrow airport for its second installation. The Web-hosting firm Fasthosts Internet Ltd came in at number 10. Both ATS and Fasthosts experienced growth rates north of 2,000 percent.

These kinds of growth rates require more staff, so it should come as no surprise and good news to learn that 85 percent of the F500 are currently hiring. But listen a little more carefully to what Deloitte & Touche are saying and you can detect plenty of background noise of tech recession. Only 3 percent of the F500, for example, see an IPO as a priority and only 4 percent of executives believe the ability to raise capital is a key skill for the chief executive. Even the winning company, Danionics, sees its award as a bright spot in a tough quarter. "It is encouraging in a difficult time," says chief executive Niels Kryger Andersen.

So what is the secret of success behind these companies that manage to grow when the rest of the technology market is shrinking?

Henrik Langebaek, chief financial officer of Danionics, is in no doubt as to the reason for his firm's success. "It's our technology... It offers superior performance and many advantages over competitive products," he says. Danionics has benefited from the success of the iPaq, but the firm is by no means dependent on this one source of revenue -- Langebaek noted with a smile that all mobile devices require batteries.

Danionics manufacturing technology affords considerable flexibility in battery shape, a key advantage as PDA, cellphone and notebook manufacturers seek to design ever smaller and slimmer devices. Thanks to Danionics, hardware manufacturers no longer need to design around the shape of the battery. Interestingly, Langebaek does not expect the PDA market to provide Danionics' biggest growth in the corporate IT space -- he anticipates instead that a new breed of much more compact notebooks will be the winning form factor for executives on the move.

The Fast 500 companies should provide a tonic to everyone involved in technology at a challenging time in the economic cycle. It is particularly encouraging to see that the Top Ten includes companies with new and exciting technologies -- not least the UK's Cambridge Display Technologies and Bristol's Advanced Transport Systems among them.

The F500 also demonstrates the enduring strength and appeal of software. Despite recent reversals, software developers are the single biggest category of company in the F500, representing 36 percent of the total. Internet, semiconductor and telecoms have a further 38 percent between them.

At the close of what has been a year best forgotten for many involved in information technology, the Deloitte & Touche European Technology Fast500 provides a timely reminder that the world still values and will lavish its attention and its money on the technologies and companies that can make a difference. That firms like Cambridge Display Technologies, Danionics, AST and many of the others on this list can still have a vision of a smarter way of doing things, and can launch companies to turn their vision into concrete products and services is inspiring for everyone who loves technology. It is significant way beyond the commercial success that it will hopefully bring to its stakeholders. Fast 500, ZDNet UK salutes you.

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