Sixty-one percent of business leaders in the tech industry think a potential recession will have a positive impact on their organization
Ernst & Young LLP announced the release of a new pulse poll examining technology leaders’ perspectives on the economic downturn heading into 2023. In October 2022, EY surveyed 250 senior business leaders at US technology companies to see how they are preparing for a potential recession. The poll uncovered that 74% of business leaders in the technology industry say they are already seeing signs of a recession in their businesses today, but they also see opportunities for their organizations.
As the increasingly recessionary environment adds pressures to the worldwide economy, new EY research shows that leaders in the technology space remain bullish on their business outlook. They are leaning into technology and digital transformation solutions, data and analytics, and creative talent investment and development strategies as ways to help insulate and even leverage elements of a recession into potential growth opportunities.
“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:
- The majority of technology leaders are seeing recessionary signs, yet they remain bullish on their outlook. Sixty-one percent of business leaders in the tech industry think a recession would have a positive impact on their organization. Half (50%) 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 percent 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 are now seen as cost-savings opportunities. Ninety percent of business leaders report they are considering prioritizing or reprioritizing remote work in an effort to save money. Tech leaders say they are doubling down on investing in remote work (70%); diversity, equity and inclusion (DEI) (69%); and employee health and wellbeing (67%).
- Emerging technologies are key in preparing for a recession. Ninety-eight percent 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%), machine learning/artificial intelligence (72%), and 5G (67%) 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,” Englund said. “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. Given the bullish perspective the tech industry has this time around, we can expect to see technology companies once again at the forefront of supporting a faster recovery.”