Home Business News Many tech leaders are predicting a recession in next 2 years

Many tech leaders are predicting a recession in next 2 years

by Peter Smyth Tech Journalist
16th Jan 20 2:58 pm

The majority of leaders at global technology companies in the US and Europe foresee economic trouble in the next two years, yet they remain confident about their own business success. In addition, most tech leaders view Europe as a growing force in the industry that is competing more effectively and attracting a growing pool of top talent from around the world. This is according to a new survey of more than 1,000 C-suite executives and founders of tech firms in the US, UK, Germany and France commissioned by trivago, a global leader in accommodation search.

The research is designed to take the pulse of tech leaders on critical issues ranging from the global economy and the startup scene to business risks and talent. Key findings indicate that European tech firms are becoming more competitive, attracting the best and brightest global talent and offer a more diverse working environment.

At least 80% of those surveyed expect a recession or prolonged downturn within the next two years. 81% of respondents feel these problems are likely to occur in the US Yet leaders are enthusiastic about their businesses. Nearly two-thirds (61%) are very confident about where their business sits in their industry.

Increased tech competition from Europe

The survey found that Europe’s technology sector is perceived as a growing economic force with a positive long-term outlook and an edge in the “war for talent.” 59% of respondents “definitely” agree that European tech start-ups have increased competition against the US over the past five years. This momentum is unlikely to slow anytime soon. When asked what region has a stronger long-term growth trajectory, more respondents cited Europe (44%) than the US (41%). Meanwhile, 56% feel that European companies are “definitely” challenging US firms for the best and brightest people.

Axel Hefer, CEO, trivago“It is interesting to see where global technology leaders feel competition is coming from. One of the keys to the success story of trivago is our diverse workforce made up of talents from across the globe and our ability to attract talent globally.

“When thinking about what drives success in a company, we believe having different mindsets, experiences, perspectives and cultures are key factors. This is why it’s not so surprising to see that European tech startups are bringing in more top talent, increasing the competition against the US based companies, while they see their businesses thrive and grow in global influence.”

The war for talent

Both the vision and business models of European tech startups may be giving them advantages over their US counterparts when it comes to recruiting and growth, the trivago survey suggests. Technology leaders feel that European companies are superior to US.

Diversity may be another key benefit for EU companies; 84% of leaders feel the EU’s working culture is attractive to global talent. However, a key advantage for US firms is that they are less risk averse. Nearly nine in 10 leaders feel EU startups are more cautious than US start-ups.

Global risk factors

When asked about growth risks, tech leaders surveyed cited these top concerns: lack of talent (52%), data security (52%) and government regulation (51%). In the US., regulation is clearly the biggest risk. Nearly three-quarters (72%) of tech leaders feel regulations have made it more difficult to access funding over the past five years. In the U.K. and France, lack of talent is the most serious concern. In Germany, both regulation and data security lead the list of risks.

Hefer added, “The technology industry is critical to the economies of both the U.S. and the E.U. in driving innovation, jobs and growth. It’s important to us that we keep a pulse on the industry as it changes at such a rapid pace.

“The findings reflect many of the pain-points and concerns we faced starting out and becoming a fast-growing global tech company, and currently face today. For us, it is unsurprising that concerns over the wider economy are high in the minds of tech leaders on both sides of the Atlantic. However, while the wider economy is still a concern, we are enthusiastic that a majority of the leaders we surveyed have great confidence in the prospects of their own companies and of the overall industry.”

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