But Silicon Valley’s dominance threatened by talent shortages and the rise of global tech centers
MENLO PARK, Calif.–(BUSINESS WIRE)–October 7, 2014–
Amid a thriving tech economy and the hottest IPO market in 15 years, some Wall Street and Silicon Valley executives have raised the specter of another tech bubble. Leading technology executives resoundingly reject such talk, expressing strong confidence in the continued strength of the tech economy and their companies in 2015. That’s according to the fourth annual Technology Leaders Forecast Survey, conducted by DLA Piper and PitchBook.
The survey, which measures the attitudes and perspectives of senior technology and venture capital executives, presents a moderately bullish view of the economy, with more than three-quarters (83 percent) of technology executives predicting healthy growth through 2015. The executives are even more bullish on the prospects for their own companies, with nearly nine out of 10 predicting growth in their sales revenues and more than a quarter (27 percent) predicting “significant growth” for their companies.
The measured optimism also extends to the IPO market, where 74 percent expect at least moderate growth. Given that 2014 is shaping up to be a record year for U.S. public offerings – the best since the late 1990s – broad expectations for continued expansion indicate strong confidence in both the tech economy and the market’s appetite for investing in tech companies.
The survey results don’t paint all blue skies for the US technology industry; respondents were less optimistic about Silicon Valley’s prospects for maintaining its place as the global epicenter of the tech industry. They cite troubles attracting and retaining qualified talent, the rise of other global technology centers, and the burdens of government regulation as ‘threats’ to the U.S. technology industry and Silicon Valley.
The survey also uncovered a significant shift in perceptions of China as a technology superpower. Just two years ago only 10 percent of technology leaders expected China would be a major contributor to technology development and innovation in the near term. In this year’s survey, two-thirds (67 percent) say China will be a major tech innovator in the next decade.
“Technology insiders have adeptly predicted the resilience of their industry through the challenging early part of this young century, and they are becoming increasingly confident in the prospects for sustained growth in 2015 and beyond,” said Peter Astiz, Global Co-head of the Technology Sector at DLA Piper. “The tech executives we surveyed are obviously excited about opportunities for international growth and innovation, but they also, evidently, are aware of globalization’s tendency to increase competitive pressures.”
Other highlights of the 2014 Technology Leaders Forecast Survey include:
- 67 percent of technology executives see emerging global tech centers as a potential threat to Silicon Valley remaining the epicenter of global technology innovation.
- 70 percent of technology executives see talent shortages and talent flight as a threat to Silicon Valley’s technology economy, a reflection of the state of the local economy and the resulting tight talent market.
- More than a quarter of tech executives (28 percent) see access to quality talent as the biggest challenge for start-ups; and almost half (46 percent) see it as a major challenge.
- 67 percent of respondents anticipate increasing their hiring in the coming year.
- 58 percent of technology executives believe data privacy and security issues are the greatest threat to their business. Only “business competition” represents a bigger threat.
- 53 percent believe that state-sponsored organizations are the primary security threat.
- 77 percent of respondents think that concerns over protection of intellectual property are the biggest threat to the growth of the technology sector in China.
- Executives ranked mobile, big data and cloud computing as the three most promising sectors of the technology economy.
The survey coincides with DLA Piper’s 2014 Global Technology Leaders Summit which is October 7 in Menlo Park, Calif. and is attended by more than 250 technology, finance and venture capital leaders.
The complete 2014 Technology Leaders Forecast Survey report can be downloaded at www.bit.ly/tech-survey2014.
About DLA Piper (www.dlapiper.com)
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