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November 12, 2012

Next Year May See Mixed Results for U.S. Business, Tech Sector

By Ed Silverstein, TMCnet Contributor

There seems to be doubt among many entrepreneurs on the strength of the U.S. economy, but most are hopeful about their own startups.

This comes as the tech sector will see a mixed bag next year, according to analyst predictions, with variations based on regions and sectors.

On the overall U.S. economy, the Kauffman/LegalZoom Startup Confidence Index reported recently in a Q4 study that less than half of the owners of start-up businesses believe the U.S. economy will improve in the next 12 months, but an overwhelming 83 percent of them predict their own businesses will be more profitable in the next year.

Image via Shutterstock

Forty-four percent of startup owners predict the economy will improve over the next 12 months, as compared to 32 percent in the Q3 survey, 38 percent in the Q2 survey and 38 percent in the Q1 survey.

Entrepreneurs who are between 18 and 30 years -old were the most hopeful, with 93 percent of this category being “confident” or “very confident” that their businesses would see higher profits over the next year, the study said.

Also, close to 40 percent of owners of startups expect to hire additional employees in the next 12 months.

When it comes to predictions for the tech sector, Garnter recently predicted that IT spending in Europe, the Middle East and Africa (EMEA) will reach $1.154 trillion in 2013, a 1.4 percent increase from 2012 projected spending of $1.138 trillion. Devices and software are among the most promising sectors in Europe, with new jobs likely to be created in big data, Gartner (News - Alert) said.

Also, Peter Sondergaard, senior vice president at Gartner, recently said that, “the mobile device market is currently the bright spot of the IT industry. We are seeing tablets and smartphones significantly outpace purchases of traditional PCs.”

Worldwide, by 2013 mobile phones will overtake PCs as the most common device to access the Web, Gartner added.

However, when it comes to Windows 8 adoption by businesses, Gartner predicts 90 percent of enterprises will bypass broad-scale deployment of Windows 8 through 2015.

In some specific areas, there will be more demand for the “personal cloud” in coming years, Gartner predicted in a study. The personal cloud “will gradually replace the PC as the location where individuals keep their personal content, access their services and personal preferences and center their digital lives,” Gartner said.

Also, watch for organizations offering mobile applications to employees through private application stores.

In addition, in the big data sector Gartner predicts in a recent study that by 2015 big data demand will lead to 4.4 million jobs worldwide, but only one-third of those jobs will be filled, according to TMCnet. The skills needed in these jobs are: data management, analytics and business expertise, being able to extract the value of big data, and artists and designers who can visualize data.

When it comes to other job growth, Gartner predicts that hiring in many Western IT markets “will come predominantly from Asian-headquartered companies enjoying double-digit growth.”

How can the government help?

After the recent U.S. national election the Information Technology Industry Council (ITI) published a blog post which called for “policy solutions to reinvigorate a national economic revival.”

The council wants to see deficit reduction without gutting “those investments in R&D, education, and other scientific initiatives that provide the foundation for innovation and economic growth.”

The council also wants to “prevent massive tax hikes from harming the U.S. economy.”  The fate of tax extenders – such as the R&D tax credit, “which lapsed in December 2011 despite broad bipartisan support for its permanent extension” – create “uncertainty” for U.S. businesses, the council added.

“Many of these extenders are integral to America’s global innovation leadership and our companies’ ability to invest in new products and services, which also translate to new, good-paying, long-lasting jobs.  That’s why Congress and the White House should act on the extension package before the year is out,” the council said.

In addition, the United States has the highest business tax rate in the world, the council claimed, which holds “back American companies and workers.”

And the tech sector wants to see immigration reform. 

The council predicts that over the next five years some 100,000 immigrants will leave the United States and “take their innovative ideas and job-creating potential with them. Many of America’s leading global companies began as technology startups founded by immigrants, including companies like Google, Intel, and Qualcomm (News - Alert).  As part of any comprehensive immigration plan, the Congress and the President should agree on an approach to keep bright minds educated in America to develop innovative products and jobs here.”

Other key issues identified by the council include trade, education and workforce development, and energy innovation and independence.

Edited by Brooke Neuman
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