By Chase Buckle, Trends Manager at GlobalWebIndex
Fears of an imminent recession have dominated the headlines in recent months. Whether it’s in analysis of the “inverted yield curve” or a projection about the outcome of Brexit, the US-China trade war, or the German economy’s weak performance in recent quarters, the warning bells from economic shocks of the past continued to sound.
At least 2020 began with some reprieve from the doomsayers. Veteran investors and economists challenged the assumptions made in earlier economic forecasts with a handful agreeing that there’s almost no chance of a recession this year.
However, GlobalWebIndex data from 10 markets reports, only around 4 in 10 knowledge workers in government, non-profit, and education sectors feel that revenue will grow in the near future, and they’re also marred by a pronounced uncertainty toward future projections.
The uncertainty extends from the public to the private sector with the brewing standoff over technology among the principal issues surfacing from these major economic developments. Artificial Intelligence and 5G connectivity are just two examples of technologies which sit at the heart of the stand-off between the U.S. and China.
Businesses are clearly not in favour of a hostile trade relationship and they’re already having to deal with the increasing uncertainty fuelled by mounting tariffs and legislation anyway. Despite this, knowledge workers in the technology & communications sector still remain more optimistic than any other industry about the economic conditions affecting their companies in the near future.
A sector swimming upstream
Remarkably three-quarters of technology and telecoms workers expect their company’s revenue to grow in the near future, compared to just 9% expecting their revenue to decline. You might be forgiven for questioning whether trade tensions are weighing on their minds as we’d expect. This also stands as one of the few sectors experiencing minimal uncertainty around revenue expectations, with just 4% saying they’re not sure on the matter.
If we narrow this down to the U.S. only, confidence in revenue growth diminishes compared to the global picture to 59% among technology and telecoms workers, with a higher proportion believing revenue will stay the same (25%) or saying they’re not sure (10%).
Regardless of their country of origin, businesses across the globe are highly interdependent on one another in their supply chains, and the technology sector is no exception. For example, many iPhone parts are made in China, and this is a key market for Apple. Equally, for all its troubles with the U.S. government, Chinese tech company Huawei is having to source new chips for their handsets away from the U.S. and have found themselves shut off from an important growth market.
Across the 10 markets surveyed, knowledge workers in the manufacturing, logistics, management training, and financial services sectors all share a similarly positive outlook to technology and telecoms workers.
The optimism seen among technology and telecoms, management training, and financial services knowledge workers also characterises their perspectives on anticipated workforce growth in the near future.
In fact, the technology sector is the most optimistic among all of them, with 62% expecting their workforce to grow in the coming year, and just 4% believing it will decline. By comparison, expectations of workforce growth among government, non-profit, and education sectors remain modest, echoing figures seen in revenue forecasts.
It’s not difficult to see why such optimism in the future exists in the workforce expectations in the technology space. The technology sector is often cited as the fastest growing industry in the world’s economy. Exceeding impossible expectations is a narrative which applies to many successful tech ventures; hence the now infamous term for tech start-ups reaching billion dollar valuations, “unicorn”, first coined in 2013.
A major example of this is in the social media industry, which continues to expand its role in being a facilitator for news consumption (40%); entertainment (38%); researching products to buy (31%); and sports consumption (22%, and growing each year).
As of September 2019, Crunchbase shows that there are around 500 privately-owned companies with “unicorn” status, posting a total market value of $1.8 trillion. Playing into this optimism is the idea that there seems to be no industry safe from the disruption of the tech sector as it continues to innovate, something which is increasingly confirmed by our global data.
Of course, nothing is guaranteed. As tech firms perform inconsistently on the markets and consumers continue to worry about a potential recession, the next year is set to be a milestone in economic uncertainty. We can only wait and see what 2020 has in store consumers and businesses alike.