Tech Firms Show Optimism

Emily Holbrook


March 1, 2011

microchipAs the economy is rebounding from the recession, some industries are seeing revenue growth return more quickly than other sectors of the economy. Tech firms may be a good example. A recent study by BDO USA, LLP found that 77% of CFOs at leading technology firms expect revenue to increase this year.

More specifically, they project a 10.4% increase in 2011 revenue, a dramatic spike from 2009 (1.6%). The optimism continues with mergers and acquisition activity; 78% of CFOs forecast an increase in M&A, including 23% who expect it to increase significantly over 2010.

"With liquidity improving and revenue on the rise, technology companies are poised for a strong 2011," said Aftab Jamil, partner and national leader of the Technology and Life Sciences Practice, BDO USA. "After scaling back on R&D and operational expenses during the recession, many technology companies are flush with cash and well-positioned to spend."

Most CFOs are feeling confident about their ability to secure additional funds as 83% say they feel better about their company's ability to access capital and credit. There will be competition, however. 40% of CFOs point to competition as the greatest challenge they will face in 2011, with the biggest competitor being the rising technology powerhouse that is China.
Emily Holbrook is the founder of Red Label Writing, LLC, a writing, editing and content strategy firm catering to insurance and risk management businesses and publications, and a former editor of Risk Management.

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