Over 80% of tech leaders predict downturn. The good news?
Reflecting attitudes across several sectors worldwide, the majority of C-suite executives at global tech companies in the U.S. and Europe see economic tumult brewing in the next couple years. Given the length of the sustained economic recovery and declining treasury yields, along with a growing sense of global economic anxiety, a slow down would come as no surprise.
What is surprising? The news doesn't seem to be dampening moods in the tech sector.
That's one finding of a recent survey of more than 1,000 C-suite execs and founders in the U.S., the U.K., Germany, and France. The study was commissioned by Trivago in coordination with research firm Censuswide.
The survey found that at least 80% of respondents expect "a recession or prolonged downturn within the next two years." Eighty-one percent of respondents feel these problems are likely to occur in the U.S. At the same time, nearly two-thirds (61%) are very confident about where their business sits in their industry.
Why the rosy glasses in light of a seemingly negative foregone conclusion? It may have to do with strong balance sheets after an epic decade-long run. The last recession ended in 2009 and tech companies have been primary beneficiaries. Recessions also have a housecleaning effect as big companies abandon underperforming business units, making way for startups.
Part of the reason, too, has to do with where the survey took place. Europe's technology sector is on fire and respondents confirmed a positive longterm outlook for the European tech sector in spite of looming global economic troubles. Fifty-nine percent of respondents "definitely" agree that European tech startups have increased competition against the U.S. over the past five years, and a large number of respondents believed the momentum wasn't going to be impeded drastically by a larger cooling in the economy.
The growing European sector may also be great news for workers as continued competition for talent will keep the labor market competitive and wages and benefits high. In fact, a lack of talent is one of the factors leaders worry may inhibit growth, along with data security and regulation. In the U.S., nearly three-quarters (72%) of tech leaders feel regulations have made it more difficult to access funding over the past five years. In the U.K. and France, lack of talent is the most serious concern. In Germany, both regulation and data security lead the list of risks.
All of which is to say the picture, at least according to one survey, is a bit mixed. A slowdown is imminent, but tech leaders remain bullish about their businesses, particularly those in Europe.
Then again, it's likely not many victims of the dot com bubble were surveyed. It's hard to predict what happens in a downturn, and cockiness had done in plenty of bullish leaders in the industry.