Tech sector shows surprising strength amid economic uncertainty

The global technology industry has shown unexpected resilience despite widespread market volatility and geopolitical tensions, according to a comprehensive new industry survey released by international law firm DLA Piper.

Company 2024 Technology IndexExpanding beyond Europe for the first time to cover 1,200 senior executives across six major regions, it reveals that the technology industry appears to be largely immune to current economic headwinds. The survey found that about two-thirds of technology companies expect revenue to grow in the next 12 months, with more than one-third expecting an increase of more than 6%.

The upbeat outlook for the global technology sector comes as many key markets grapple with a slow post-pandemic recovery and persistent inflation concerns. The research covers insights from small businesses to large enterprises with revenues of US$10 million to US$10 billion, providing a comprehensive view of different business sizes.

The survey recorded its highest ever confidence score of 71 points, surpassing the previous peak of 68 points. Meanwhile, the Middle East, Europe and Asia-Pacific showed a slightly cautious but still optimistic outlook.

The study identified several important drivers supporting confidence in the global technology industry, including positive sentiment about the venture capital market, talent supply and the regulatory environment. However, when asked explicitly about geopolitical factors, respondents’ confidence dropped significantly, with scores falling to 53 points, reflecting continued concerns about international tensions and trade relations.

Artificial intelligence emerged as a dominant theme, with 63% of respondents viewing it as a major growth opportunity. European organizations show great enthusiasm for AI, with 72% highlighting AI as a key area for their development.

Mark O’Conor, global co-chair of DLA Piper’s technology sector in London, introduced the findings: “This report provides the first truly global view of the technology industry, drawing insights from industry leaders and policymakers around the world,” he said.

The research also sheds light on the evolution of how technology companies respond to challenges. After experiencing recent disruptions, including the pandemic, supply chain issues, and economic fluctuations, many organizations appear to be increasing adaptability in their business strategies.

While overall sentiment remains positive, companies are taking a more cautious approach to growth than in previous years. Research shows there is a shift towards more disciplined investment strategies and careful evaluation of new technologies, especially in Artificial Intelligence Implementation and digital transformation.

This balanced approach suggests that while the outlook for the global tech industry in 2024 remains generally positive, industry leaders are tempering their optimism with practical considerations and more careful strategic planning. The industry appears to be entering a phase characterized by a more sustainable growth model, rather than the aggressive expansion of previous years.

Regulatory compliance, historically viewed as a potential barrier to growth, is now viewed more positively by many respondents. The survey showed that 75% of participants believe the current regulatory environment is conducive to growth, suggesting that a clear regulatory framework may support rather than hinder the development of the industry.