Tech Industry Leaders Optimistic on Recovery But See Flat Employment

A survey of tech industry executives finds confidence in a continuing economic recovery but isn’t eyeing a rebound in job growth.

Among the technology and venture capital execs questioned for the DLA Piper Technology Leaders Forecast Survey, 85 percent believe the economy will sustain its current economic recovery. That’s a healthy increase in confidence since the last DLA Piper study six months ago, when only 69 percent of those surveyed expressed such optimism.

Those surveyed also expressed confidence about their own companies, with 72 percent anticipating higher sales growth and 82 percent forecasting greater demand for business. Smaller startup and mid-sized tech firms were a bit more optimistic than were their larger technology counterparts.

But the positive outlook for the economy and business in general isn’t going to translate into higher job growth, according to the survey. Among all companies, 43 percent said they expect to keep their workforce levels relatively flat. And among larger tech firms with more than $1 billion in annual sales, 60 percent are projecting flat or lower employment over the next 6 to 12 months.

The current weakness in the IPO market is also likely to continue, and more than half of the executives questioned expect fewer venture capital firms and fewer funded tech companies down the road.

Reactions were mixed about Washington’s current debate on extending the Bush-era tax cuts. Among those surveyed, 56 percent believe that an expiration of the tax cuts would reduce investments in startup companies and venture capital funds. But 30 percent say the higher government revenues generated by the resulting tax increase would help cut deficits and improve confidence in the economy.

Finally, cloud computing and clean technology were touted by tech leaders as the industry’s two most promising growth sectors, and almost 84 percent are in favor of tax benefits and other incentives to build up the Clean Tech market.

To compile the study, DLA Piper e-mailed a survey to thousands of senior executives and advisors in the technology industry, including CEOs, CFOs and other higher-ups, as well as venture capitalists, entrepreneurs and consultants.