UK Joins US, China as Top Global Tech Markets
Santa Clara, CA – Technology industry leaders are most bullish on revenue growth in the US, China, and the United Kingdom, according to the results of the annual Technology Business Outlook survey of US-based technology executives conducted by business consultancy KPMG LLP.
The UK ranking is one of the biggest surprises in this year’s survey with 42 percent of the technology leaders projecting that market as their first, second or third highest revenue growth rate for their companies in the next 12 to 24 months, compared to only 18 percent in last year’s survey.
The US remains the No. 1 market, selected among the top three by 81 percent of the respondents – higher than results in the prior three annual surveys – followed by China at 47 percent. The executives were each asked to select their top three markets.
“The jump by the UK is the result of strong economic recovery in the country combined with the effects of tax incentives which have encouraged investment in the tech sector,” said Tudor Aw, head of KPMG Technology Europe.
The findings, he said, “reflect KPMG’s most recent local technology report showing UK tech sector business activity growth at its highest for almost 10 years supported by steep rises in incoming new work and the lowest rate of cost inflation for over four years.”
Interest in Brazil, Mexico and South Korea Declines
Unlike a year ago when Brazil, Mexico, and South Korea appeared on the rise, fewer survey respondents see those three countries as their biggest revenue and employment growth markets.
Brazil’s position as a revenue growth market declined 10 percentage points to 23 percent and as an employment growth market 5 percentage points to 21 percent.
Tech executives’ expectations for their company’s revenue growth in South Korea declined from 14 percent in 2013 to 7 percent in this year’s survey, and for employment growth it slipped two percentage points to 10 percent.
The outlook for Mexico dipped six percentage points to 9 percent for revenue growth, and fell six percentage points to 15 percent for employment growth.
Technology executives believe the US, India, and China will be the leading markets for tech employment growth between now and 2016.
Other countries with higher tech company expectations for employment growth are Canada, at 30 percent up from 23 percent, the UK 28 percent up from 21 percent, and Germany 15 percent up from 7 percent.
Offshoring Outgaining Onshoring
While 58 percent of those surveyed don’t plan to make any changes in how they deploy their manufacturing in the next two years, 24 percent are either moving more manufacturing offshore or incrementally adding new offshore manufacturing.
Eleven percent are either moving manufacturing back or adding new manufacturing operations in the US.
At the same time, 61 percent of the technology executives say their companies are not planning to re-shore non-manufacturing functions. Sixteen percent say they will, and 23 percent say maybe.
The KPMG survey was conducted in the US in March among executives from companies based in the US and overseas with 74 percent represent companies with revenues of $1 billion or more and 26 percent represent companies with revenues in the $100 million to less than $1 billion range.