Almost three-quarters of technology leaders say they have already seen signs of a recession in their business, but 61 per cent think this will have a positive impact on their businesses.
Ernst & Young (EY) asked 250 senior business leaders at US technology companies for their perspectives on the economic downturn heading into 2023 to see how they are preparing for a potential recession.
The poll uncovered that 74 per cent of business leaders in the technology industry say they are already seeing signs of a recession at work, but they also see opportunities for their organisations.
As the increasingly recessionary environment adds pressure to the worldwide economy, new EY research shows that leaders in the technology space remain bullish on their business outlook.
"The technology sector experienced tremendous growth during the pandemic, while other industries faced setbacks," says Ken Englund, EY Americas Technology, Media and Telecommunications Leader. "Tech companies are very agile, and that's a benefit for them during these times.
“Now, even with the potential of an economic downturn, tech leaders are looking at ways to anticipate and mitigate recessionary pressures by using it as a time to reset and shift their strategies more toward digital transformation, emerging technologies, and talent retention."
The EY survey also found:
- Most technology leaders are seeing recessionary signs, yet they remain bullish on their outlook. Sixty-one per cent of business leaders in the tech industry think a recession would have a positive impact on their organisations. Half (50 per cent) of the leaders say they plan to activate their growth plans within the next two years or sooner.
- Retaining great talent is still a priority. Ninety per cent of business leaders in the tech industry say they are investing in new talent to remain competitive amid the threat of a recession. While this may sound counterintuitive given recent tech sector layoffs, retaining high-performing talent with the right skills will be even more critical as these companies face economic headwinds.
- Remote and flexible work is now seen as cost-saving opportunities. Ninety per cent of business leaders report they are considering prioritising or reprioritising remote work to save money. Tech leaders say they are doubling down on investing in remote work (70 per cent); diversity, equity and inclusion (DEI) (69 per cent); and employee health and wellbeing (67 per cent).
- Emerging technologies are key in preparing for a recession. Ninety-eight per cent of business leaders in the tech industry are using data and analytics to adjust their supply capacity for a potential recession. Data and analytics (83 per cent), machine learning/artificial intelligence (72 per cent), and 5G (67 per cent) are the most commonly reported technologies that leaders in the tech industry say they are implementing to ensure more efficient operations amid the threat of a recession.
"It's interesting, even contrarian, to consider the lens through which the technology sector views the current recessionary environment," says Englund. "Technology is so often a solution in times of economic downturn - emerging tools and digital strategies are many times what help companies weather down economies more productively.
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