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Technology CEOs Cautiously Optimistic About Growth
NEW YORK -- Chief executives at some of the world's fastest- growing technology companies are very confident in their ability to grow sales, as well as prospects for the global economy over the next 12 months, according to a survey by member firms of Deloitte Touche Tohmatsu.But while technology CEOs are positioning their companies to grow, and focusing on revenue and market share instead of cost reduction and cash flow management, they remain cautious and deliberate, with modest hiring plans and a firm commitment to growth that is profitable and sustainable.Nearly 75% of theĀ CEOs at technology companies in the United States, Europe and the Asia Pacific region says they are "very confident" or "extremely confident" their companies will achieve a high rate of growth over the next year. Fewer than 15% cite the economy as their biggest challenge to sustained revenue growth-less than half the number from last year's survey."This survey shows fast-growing technology companies are deeply committed to controlled and sustainable growth, and CEOs are taking it personally," said Igal Brightman, global managing partner for Deloitte's Technology, Media and Telecommunications Group. "CEOs cited sustained profitability as their top personal challenge, with most expecting the lion's share of growth to come from existing businesses as opposed to mergers and acquisitions. That's a big shift from the land-grab mentality of the late 1990s."Last year, 58% of the respondents from North America cited cash management as their biggest financial challenge. This year, that number decreased to 25%. Globally, more than 50% of all CEOs cite sales growth as their biggest financial challenge, with a strong sales and marketing strategy their top operational challenge.Despite aggressive growth plans, most companies expect only moderate increases in headcount. Roughly 55% of respondents plan to add fewer than 25 jobs, while another 25% plan to add no more than 50 positions. While encouraging, these hiring forecasts do not approach the hiring frenzy of the 1990s technology boom.Fast-growing technology CEOs are also focused on local and regional markets. Despite endless talk about globalization, more and more companies are looking to capitalize on market opportunities closer to home, with roughly two-thirds citing their own region as the most significant source of new growth. In Europe, many companies are preparing to take advantage of the European Union's expansion from 15 members to 25. In Asia Pacific, technology companies are eyeing opportunities in China and India.CEOs in all regions consistently rated the Internet, along with wireless & wireline communications, among the top three growth technologies over a one- to three-year period. Companies are increasingly positioning and exploiting the Internet as an extremely powerful tool that can streamline business processes, promote collaboration between business partners, and inspire new markets and businesses.More than 14% of fast-growing companies in the targeted survey group are directly involved in Internet-related industries, while countless others are using the Internet to improve the products and services they offer in the marketplace. "Technology executives learned some tough lessons from the last boom-and-bust cycle and have vowed not to make those same mistakes," said Brightman. "They're focusing on profitability, hiring quality over quantity, and trying to steer clear of technology hype. Of course, the real test is yet to come. We'll see if CEOs can maintain their composure when the global economy takes off and investor capital starts flying.""