BDO’s Technology Survey Breakfast Briefing, 24th April
Tuesday, April 24, 2012
Technology companies look to product innovation and new markets in path to growth
Growth expectations decline and recession is now the main concern
Early results from business advisory firm BDO’s annual Technology Sector Survey show that new market growth and product innovation are the two key growth strategies in the sector for 2012. This can be seen as a reaction to stagnation in existing domestic markets with results also showing that growth expectations across the sector are down considerably in relation to last year’s survey results.
The results of the survey, which were released at BDO’s Technology breakfast briefing in Dublin (today) also show that unlike last year’s results, the sector is now feeling fully the effects of the economic downturn and reacting accordingly.
When asked about the key growth strategies for the year, one in two companies (50%) looked to new market segments to drive their growth, with 48% looking to product innovation.
When asked what the level of annual revenue growth was expected for the next 12 months, less than half of respondent companies forecasted a rise above 5%. This contrasts sharply with last year’s results where over four in five companies (82%) saw growth achievable at that level.
There has also been a sharp rise in Technology companies predicting negative growth for the year, moving up from 5% to more than one in seven (16%) forecasting a fall in revenue for the year. When asked what factors were contributing to these lowered expectations more than three in five companies (62%) sited the economic downturn as a clear factor, with only 9% giving that reason 12 months ago.
Commenting on the results BDO’s Head of Technology sector team Teresa Morahan said:
"The survey has highlighted the flexibility of our Technology sector in its continued drive for growth. The development of new market strategies and product service innovation are clearly the key factors for growth in the future.
These results emphasise the importance of ongoing expansion into new markets and development of new products and services in the sector. The reality for many companies is that innovation and development of new markets is a critical factor to achieving both market position and growth.
This country is clearly attractive as a location for the sector, and this strategy is a key pillar in the drive into post-recession Ireland. We have made great strides to achieve a critical mass of significant technology companies and become a well-connected Data centre however the economy is having a negative effect on our indigenous industry and its clear that these moves to new markets and product development are the sectors innovative reaction to this."
About the Survey: The 2012 BDO Technology sector survey was conducted during the first quarter of 2012. 100 companies in the Technology, Media and Telecoms sector were interviewed. The majority of respondents were at MD / CEO or FD/FC level. Representative of companies from both Republic of Ireland and Northern Ireland were interviewed. The survey fieldwork was carried out by BDO and by UCD Michael Smurfit Graduate Business School.
Read BDO's Technology Sector Growth Survey & Insights document, (PDF, 1.7MB).
See photos from the breakfast briefing event on the 24th April.