- CEOs confident about growth, but employment shortages may be a hindrance-
- Survey reveals concern over increased competition from China & India -

Growth is back at the top of the agenda for technology companies, according to Deloitte’s 2005 global CEO Survey of the fastest growing technology companies, as ranked in the Deloitte Technology Fast 500. Three out of four are very confident or extremely confident about continuing their company’s current rate of growth.

William Touche, technology partner at Deloitte comments: “CEOs are more confident about their company’s prospects than they have been in recent years, and are aggressively pursuing new growth opportunities. 60% of respondents are committed to the idea of growing organically, rather than through acquisition.”

The main barrier to growth is finding, hiring and retaining enough qualified people to support technology companies’ ambitious growth plans. 94% of respondents expect to increase their headcount this year, with more than 4 out of 10 planning to grow by at least 25%. In all three regions, the emphasis on finding good people is significantly higher than in previous years.

“Juxtaposed to CEO growth plans is the fact that we may be witnessing the early stages of a long-anticipated global labour shortage, with fewer young people entering the workforce. This problem will be particularly acute in Western Europe. With qualified workers in increasingly short supply, talent management is likely to become a strategic imperative,” comments Touche.

Other key findings include:

• 94% expect to increase their headcount this year.
• A third of companies in the survey rated ‘developing and bringing new products to market’ or ‘competitive products’ as their biggest challenge to sustaining revenue growth.
• 60% of respondents see their own region as the best source for growth.
• CEOs in every region see their top challenge as developing leaders and delegating responsibility – rating profitability a close second.

Touche continues: “The majority of CEOs expressed very little concern about current economic conditions, a dramatic shift from a few years ago. This sentiment may be based on a belief that the technology sector is becoming relatively impervious to macroeconomic conditions, and that the latest technology advances will always have value because of their ability to generate new market opportunities and competitive advantage.”

Although CEO confidence is at an all-time high, there is significant concern over increased competition from emerging powers like India and China. In Europe and North America, companies are most concerned about gaining access to capital to support their aggressive growth.

Focusing on product development and innovation is seen as a priority for CEOs, with a third of respondents rating “developing and bringing new products to market” or “competitive products” as their biggest challenge to sustaining revenue growth.

Most fast-growth companies are keeping their sights focused on their home region, with 60% of CEOs focusing on their own region as the best source of growth.

Respondents were also asked which technologies have the greatest potential for growth over the short (next 12 months) and longer term (over the next 3 years). Internet and IP-based applications were seen to have the greatest potential for short-term growth, with wireless communications ranking second (except in Asia Pacific where it is in a virtual tie for first). Looking at the longer-term growth predictions, the picture is largely the same.

Ends

Notes to Editors

About the survey
Deloitte’s Technology Fast 500 is an annual ranking of the world’s fastest-growing technology companies. This elite group includes 500 companies from each major region: North America, EMEA, and Asia Pacific. More than 480 CEOs from the Deloitte Technology Fast 500 participated in this year’s global survey, with significant representation from every region. Survey questions addressed the full range of business challenges, from strategy and marketing to operations and finance. It also looked at the growth prospects for individual companies and the economy overall—including an assessment of the market’s hottest growth areas over a one-year and three-year time horizon.

Regional response was as follows: North America, 31%; Asia Pacific, 30%; EMEA, 39%.

About Deloitte
In this press release references to Deloitte are references to Deloitte & Touche LLP.

Deloitte & Touche LLP is the UK's fastest growing major professional services firm based in 21 UK locations, with over 10,000 staff nationwide and fee income of £1,246 million in 2003/2004. It is a member firm of Deloitte Touche Tohmatsu, a leading professional services organisation, delivering world class audit, tax, consulting and corporate finance services, with around 120,000 people in over 140 countries. Deloitte Touche Tohmatsu is a Swiss Verein, and each of its national practices is a separate and independent legal entity.

Deloitte & Touche LLP is authorised and regulated by the Financial Services Authority.

The information contained in this press release is correct at the time of going to press.