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November, 2012 © 2012 Technology Councils of North America. All rights reserved. www.technologycouncils.org National Survey of Technology, Policy and Strategic Issues Research Methodology and Background About TECNA | CompTIA | TechVoice About TECNA The Technology Councils of North America (TECNA) represents almost 50 IT and Technology trade organizations who, in turn, represent more than 16,000 technology-related companies in North America. TECNA serves its members and the industry through its strong peer-to-peer network and its regional initiatives to raise the visibility and viability of the technology industry. About CompTIA CompTIA is the voice of the world’s information technology (IT) industry. Its members are the companies at the forefront of innovation; and the professionals responsible for maximizing the benefits organizations receive from their investments in technology. CompTIA is dedicated to advancing industry growth through its educational programs, market research, networking events, professional certifications, and public policy advocacy. About TechVoice TechVoice is a newly-formed partnership of the Computing Technology Industry Association (CompTIA), the Technology Councils of North America (TECNA), and participating regional technology associations. Collectively, we represent thousands of technology companies across the country employing millions of workers. We are dedicated to empowering and mobilizing the grassroots tech community to impact legislative and regulatory issues important to growth, innovation and job creation. About This Research The data for this quantitative study was collected via an online survey conducted during October 2012. A total of 1,082 senior (C-level) U.S. IT and business executives belonging to one of the regional technology associations affiliated with the Technology Councils of North America (TECNA) participated in the survey. The margin of sampling error at the 95% confidence level for the overall results is +/- 3.0 percentage points. Sampling error is larger for subgroups of the data. As with any survey, sampling error is only one source of possible error. While non-sampling error cannot be accurately calculated, precautionary steps were taken in all phases of the survey design, collection and processing of the data to minimize its influence. The study was conducted in conjunction with the Computing Technology Industry Association (CompTIA). CompTIA is a member of the Marketing Research Association (MRA) and conforms to its guidelines for survey best practices and research ethics. Any questions about the research methodology or data collection can be directed to [email protected]. Profile of Survey Respondents Industry Sector Number of Employees 43% 34% 15% 18% 15% 3% 15% 9% 6% 6% 6% 5% 4% 4% 3% 2% 1% 1% 0% Information technology (IT) or telecommunications Professional services (non IT) Healthcare/Medical Financial/Banking/Insurance Media/Publishing/Entertainment Education Advanced manufacturing (non IT sector) Life sciences Environmental or energy technology Retail/Wholesale Government (federal, state, local) AMTUC (Agriculture, Mining, Transportation, Utilities, Construction) Hospitality/Food/Beverage Less than 10 10 to 24 25 to 99 100 to 499 500 to 999 1,000 or more employees Job Level 100% C-Level or Higher or Equivalent Source: TECNA Base: 1,082 senior U.S. technology and business executives Geographic Segmentation Categories This report contains a number comparisons among geographic regions. The following groupings are based on standard U.S. Census Bureau categorizations. Northeast (n=267) Connecticut Technology Council Mass Technology Leadership Council (MassTLC) New Hampshire High Tech Council New Jersey Technology Council New York Technology Council Philadelphia Alliance for Capital and Technologies Pittsburgh Technology Council Midwest (n=279) Illinois Technology Association (ITA) Northeast Ohio Software Association Minnesota High Tech Association Technology Association of Iowa Wisconsin Technology Council South (n=234) Council for Entrepreneurial Development (CED) Louisiana Technology Council Metroplex Technology Business Council (MTBC) North Carolina Technology Association Northern Virginia Technology Council Technology Association of Georgia West (n=298) Arizona Technology Council Technology Association of Oregon Utah Technology Council Washington Technology Industry Association Section 1: Business Sentiment Business Sentiment Expected to Improve Modestly Over the Next Six Months Rating on a 100-point scale | 100=highest | 0=Lowest 62.1 64.9 66.4 71.6 52.9 46.3 Rating Today Projected Rating U.S. Economy Rating Tech Sector Rating My Company Rating Source: TECNA Base: 1,079 senior U.S. technology and business executives Business Sentiment Segmentation: Industry Sector Ratings Rating on a 100-point scale | 100=highest | 0=Lowest 68 64 58 62 65 65 Information Technology Sector 47 46 45 Other Tech Sectors Other Sectors U.S. Economy Rating Tech Sector Rating My Company Rating Source: TECNA Base: 1,079 senior U.S. technology and business executives Business Sentiment Segmentation: Regional Ratings Rating on a 100-point scale | 100=highest | 0=Lowest 63 61 62 61 67 68 66 64 Northeast Midwest 46 46 46 47 South West U.S. Economy Rating Tech Sector Rating My Company Rating Source: TECNA Base: 1,079 senior U.S. technology and business executives Business Sentiment Segmentation: Company Size Ratings Ratings Rating on a 100-point scale | 100=highest | 0=Lowest 61 63 63 62 69 70 68 62 Micro Firm <10 employees 45 47 47 46 Small Firm 10-99 employees Medium Firm 99-100 employees Large Firm 500+ employees U.S. Economy Rating Tech Sector Rating My Company Rating Source: TECNA Base: 1,079 senior U.S. technology and business executives Many Businesses Plan to Increase Investments Timeframe: over next 6 months Planning Decreases No Change Expected Planning Increases Staffing levels in technical positions 5% 38% 57% Investments in new products or business lines 6% 36% 59% Marketing/advertising expenditures 8% 39% 53% Technology expenditures 6% 42% 52% 42% 51% Staffing levels in non-technical positions 8% Staff training or professional development 6% 52% Business travel 11% Capital expenditures (e.g. non technology) 10% 57% 7% 66% Cost cutting 48% 42% 41% 33% 27% Source: TECNA Base: 1,077 senior U.S. technology and business executives Business Investment Segmentation: Industry Sector Ratings Percent indicating a planned increase in investment over next 6 months Information Tech Sector Other Tech Sectors Other Sectors 69% Staffing levels in technical positions 54% 47% 62% 60% 55% Investments in new products or business lines 56% Staffing levels in non-technical positions 42% 48% 57% Marketing/advertising expenditures 45% 52% Technology expenditures 53% 52% 52% Source: TECNA Base: 1,077 senior U.S. technology and business executives Business Investment Segmentation: Region and Company Size Ratings Percent indicating a planned increase in investment over next 6 months Planned Increase North Midwest South West Staffing levels in technical positions 59% 56% 54% 59% Investments in new products or business lines 59% 58% 53% 64% Marketing/advertising expenditures 57% 52% 48% 56% Technology expenditures 53% 55% 46% 54% Staffing levels in non-technical positions 51% 49% 47% 55% Micro Firms Small Firms Medium Firms Large Firms Staffing levels in technical positions 49% 68% 64% 47% Investments in new products or business lines 54% 63% 65% 54% Marketing/advertising expenditures 62% 61% 44% 30% Technology expenditures 51% 56% 55% 44% Staffing levels in non-technical positions 50% 60% 55% 32% Planned Increase Source: TECNA Base: 1,077 senior U.S. technology and business executives Executives Express a Range of Concerns Over Threats to Growth at Their Business Timeframe: over next 6 months Stalled recovery 54% General lack of confidence/paralysis 47% Unexpected shock (e.g. spike in oil price, etc.) 36% Access to credit/capital 36% Government regulation 36% Labor prices/availability of talent 31% Weak corporate demand 32% Weak consumer demand 22% Lower margins 22% Domestic competition 19% Disruptive technologies or business models 16% Overseas competition 13% Stock market volatility 12% Input/commodity price inflation 5% Weak export market 4% Source: TECNA Base: 1,078 senior U.S. technology and business executives Section 2: Policy Positions Support for Tech Policy Initiatives Rating Policy Proposal that May Impact Tech Sector Innovation and Growth 58% Doing more to expand access to capital for startup and high growth companies 49% Doing more to advance STEM education at the K-12 level 47% Achieving a simplified personal and corporate tax structure, including closing corporate tax loopholes 44% Making the research and development (R&D) tax credit permanent 42% Placing career, technical and vocational education on par with traditional degree programs to help expand pool of trained tech workers 34% Expanding visa categories and H1B caps to keep foreign nationals with advanced STEM skills in the U.S 24% Advancing a pro-trade agenda to expand U.S. exports of technology products 21% Creating more incentives to build out the broadband infrastructure 21% Expanding incentives and easing regulations for commercialization of academic or government applications 17% Making more spectrum available for creation of new wireless applications 16% Tax holiday for the repatriation of profits from overseas by U.S. tech companies Source: TECNA Base: 1,056 senior U.S. technology and business executives Policy Perceptions Segmentation: Regional Ratings Policy Proposal North Midwest South West Doing more to expand access to capital for startup and high growth companies 65% 57% 55% 54% Doing more to advance STEM education at the K-12 level 42% 52% 50% 52% Achieving a simplified personal and corporate tax structure, including closing corporate tax loopholes 43% 49% 46% 50% Making the research and development (R&D) tax credit permanent 48% 43% 37% 46% Placing career, technical and vocational education on par with traditional degree programs to help expand pool of trained tech workers 38% 44% 39% 46% 32% 31% 35% 38% 24% 21% 24% 26% 20% 21% 20% 23% 19% 25% 22% 19% 16% 17% 17% 16% 14% 14% 20% 17% Expanding visa categories and H1B caps to keep foreign nationals with advanced STEM skills in the U.S Advancing a pro-trade agenda to expand U.S. exports of technology products Expanding incentives and easing regulations for commercialization of academic or government applications Creating more incentives to build out the broadband infrastructure Making more spectrum available for creation of new wireless applications Tax holiday for the repatriation of profits from overseas by U.S. tech companies Source: TECNA Base: 1,053 senior U.S. technology and business executives Rating of Preference for Degree of Government Involvement in Promoting Innovation and Growth in the Tech Sector 40% 21% A NET 65% prefer a moderate to high level of government involvement 19% 14% 6% Very Low Level of Involvement Low Level High Moderate Level Level of Government Involvement Very High Level of Involvement Source: TECNA Base: 1,054 senior U.S. technology and business executives Preference for Government Involvement Segmentation: Regional Ratings Preference for level of government involvement in promoting innovation and growth in the tech sector 43% 41% 37% 38% 40% 41% 32% Northeast Midwest 30% 29% South 27% 21% West 18% NET Low Government Involvement Moderate Government Involvement NET High Government Involvement Source: TECNA Base: 1,051 senior U.S. technology and business executives Preference for Government Involvement Segmentation: Rating of Economy Preference for level of government involvement in promoting innovation and growth in the tech sector NET Negative View of U.S. Economy 48% 45% 45% 34% 33% 29% 26% NET Lukewarm View of U.S. Economy 21% 18% NET Positive View of U.S. Economy NET Low Government Involvement Moderate Government Involvement NET High Government Involvement Source: TECNA Base: 1,053 senior U.S. technology and business executives Policy Perceptions Segmentation: Preference for Government Involvement Policy Proposal that May Impact the Tech Sector Level of Government Involvement in Supporting/Promoting Tech Sector High or Moderate Low or Very High Level of Very Low Involvement Involvement Involvement Doing more to expand access to capital for startup and high growth companies 67% 59% 51% Doing more to advance STEM education at the K-12 level 53% 56% 39% Achieving a simplified personal and corporate tax structure, including closing corporate tax loopholes 37% 47% 55% Making the research and development (R&D) tax credit permanent 51% 41% 43% Placing career, technical and vocational education on par with traditional degree programs to help expand pool of trained tech workers 44% 44% 39% Expanding visa categories and H1B caps to keep foreign nationals with advanced STEM skills in the U.S 42% 37% 25% Advancing a pro-trade agenda to expand U.S. exports of technology products 23% 24% 25% Expanding incentives and easing regulations for commercialization of academic or government applications 29% 17% 20% Creating more incentives to build out the broadband infrastructure 26% 22% 17% Making more spectrum available for creation of new wireless applications 21% 14% 16% Tax holiday for the repatriation of profits from overseas by U.S. tech companies 13% 14% 20% Policy Perceptions: Additional Notes Doing more to expand access to capital for startup and high growth companies - Rated most important to micro-size firms (72%) and small firms (60%) Achieving a simplified personal and corporate tax structure, including closing corporate tax loopholes - Rated most important to small firms (51%), micro-size firms (48%) and medium-size firms (47%) Doing more to advance STEM education at the K-12 level - Rated most important to large firms (63%) Placing career, technical and vocational education on par with traditional degree programs to help expand pool of trained tech workers - Rated most important to large firms (45%) Rating of How State/Local Government Represented the Interests of the Tech Sector Timeframe: during past two years 39% A NET 37% rated state/local government as representing the interests of the tech sector well 30% 18% 7% Represented Poor Tech Interests Very Poorly 7% Just Okay Well Represented Tech Interests Very Well Source: TECNA Base: 1,046 senior U.S. technology and business executives How State/Local Government Represented the Interests of the Tech Sector Segmentation: Regional Ratings 43% 42% 36% 35% 40% 36% 38% Northeast 31% Midwest 30% South 27% 22% NET Well Just Okay 20% West NET Poor Timeframe: during past two years Source: TECNA Base: 1,043 senior U.S. technology and business executives How State/Local Government Represented the Interests of the Tech Sector Segmentation: Tech Sector Performance Ratings 52% Believe Tech Sector Performing At or Above Potential 41% 35% 31% 29% Believe Tech Under-Performing Potential 13% NET Well Just Okay NET Poor Timeframe: during past two years Source: TECNA Base: 974 senior U.S. technology and business executives Rating of How Federal Government Represented the Interests of the Tech Sector Timeframe: during past two years 37% A NET 19% rated the federal government as representing the interests of the tech sector well 29% 15% 17% 2% Represented Poorly Represented Well Represented Tech Interests Tech Interests Tech Interests Very Poorly Just Okay Very Well Source: TECNA Base: 512 senior U.S. technology and business executives Most Executives Recommend Their State/Region as a Good Environment for Tech Startups Definitely recommend 32% Probably recommend 31% May or may not recommend 21% Probably do not recommend Definitely do not recommend 13% 3% Source: TECNA Base: 1,048 senior U.S. technology and business executives Most Executives See a Shortage of Tech Talent Significant shortage in terms of the quantity and quality of tech talent 22% Moderate shortage 50% Equilibrium, supply roughly equals demand Moderate surplus Significant surplus in terms of quantity and quality of tech talent 16% 10% 2% Source: TECNA Base: 1,049 senior U.S. technology and business executives Tech Talent Availability Segmentation: Industry Sector Ratings Rating of degree to which there is a shortage of quantity and quality of tech talent in respondent’s state/region 75% 52% 50% 72% 56% 40% Information Technology Sector Other Tech Sectors 25% 20% Other Sectors 16% Significant shortage Moderate shortage NET shortage Source: TECNA Base: 1,045 senior U.S. technology and business executives Tech Talent Availability Segmentation: Regional Ratings 73% 76% 68% 69% Northeast 59% 47% 48% Midwest 46% South West 30% 21% 21% 14% Significant shortage Moderate shortage NET shortage Source: TECNA Base: 1,046 senior U.S. technology and business executives Most Executives Believe the Tech Sector in Their State/Region Is Not Reaching Its Potential Believe Tech Sector in state/region out-performing its potential Don’t know 7% 3% 25% Believe Tech Sector in state/region under-performing its potential Believe Tech Sector in state/region performing at its potential 66% Source: TECNA Base: 1,045 senior U.S. technology and business executives Assessment of Tech Sector Potential Segmentation: Company Size Ratings Rating of the respondent’s belief of the degree to which the tech sector in respondent’s state/region is reaching its potential, or not 70% 70% 61% 56% Micro Firm <10 employees Small Firm 10-99 employees 33% 34% Medium Firm 99-100 employees 19% 21% Large Firm 500+ employees 3% 1% 1% 4% Out-performing its potential Performing at Under-performing about its potential its potential Source: TECNA Base: 1,046 senior U.S. technology and business executives Policy Perceptions Segmentation: Preference for Government Involvement Policy Proposal that May Impact the Tech Sector Level of Government Involvement in Supporting/Promoting Tech Sector High or Moderate Low or Very High Level of Very Low Involvement Involvement Involvement Doing more to expand access to capital for startup and high growth companies 67% 59% 51% Doing more to advance STEM education at the K-12 level 53% 56% 39% Achieving a simplified personal and corporate tax structure, including closing corporate tax loopholes 37% 47% 55% Making the research and development (R&D) tax credit permanent 51% 41% 43% Placing career, technical and vocational education on par with traditional degree programs to help expand pool of trained tech workers 44% 44% 39% Expanding visa categories and H1B caps to keep foreign nationals with advanced STEM skills in the U.S 42% 37% 25% Advancing a pro-trade agenda to expand U.S. exports of technology products 23% 24% 25% Expanding incentives and easing regulations for commercialization of academic or government applications 29% 17% 20% Creating more incentives to build out the broadband infrastructure 26% 22% 17% Making more spectrum available for creation of new wireless applications 21% 14% 16% Tax holiday for the repatriation of profits from overseas by U.S. tech companies 13% 14% 20% Section 3: Technology Trends Ranking of Growth Potential for Segments Within the Tech Sector Information technology (IT), including telecom 44% 37% 34% 35% Life sciences or healthcare technology 9% 10% Advanced manufacturing Environmental or energy technology Defense / military technology Importance to State/Region Today 7% 13% 5% 3% Change in Importance Over Next 2 Years Source: TECNA Base: 1,042 senior U.S. technology and business executives Growth Potential Areas Within Tech Sector Segmentation: Region and Sector Ratings Sector within Tech North Midwest South West Information technology or telecommunications 30% 33% 57% 57% Life sciences or healthcare technology 45% 46% 27% 19% Advanced manufacturing 11% 13% 3% 8% Environmental or energy technology 7% 6% 6% 9% Defense / military technology 6% 1% 6% 7% Info Tech Sector Other Tech Sectors Other Sectors Information technology or telecommunications 57% 18% 38% Life sciences or healthcare technology 28% 42% 38% Advanced manufacturing 6% 18% 9% Environmental or energy technology 5% 14% 7% Defense / military technology 4% 7% 6% Sector within Tech Source: TECNA Base: 1,042 senior U.S. technology and business executives Assessment of Technologies as Contributors to Growth in State/Region Over Next Two Years 64% Big Data analytics, data mining and business intelligence 59% Mobile apps development 59% Cloud-based software development (SaaS) 59% Healthcare tech 48% Everything-as-a-service (e.g. managed help desk, networks, communications, security, etc.) 42% Wireless services 39% E-commerce or mobile commerce 38% Cloud implementation, integration or consulting services 37% Green tech 36% Mobile implementation, integration or consulting services 35% Mobile device development (Tablets, smartphones, accessories) 34% Biotech 33% Business process automation 31% Social solutions and technologies 30% Big Data storage and management 29% Cloud data centers 29% Enterprise collaboration (Video conferencing, collaboration tools) 26% Data visualization 24% Location-based services and technologies 23% Aggregation/Orchestration (bringing multiple service providers into a single point of contact) 17% Machine-to-machine learning or interaction 14% Defense tech 9% Telecom equipment Rating of Technology Growth Drivers Micro-Size Firms Top 5 1. 2. 3. 4. 5. Healthcare tech Mobile apps development Big Data analytics, data mining and business intelligence Cloud-based software development (SaaS) Everything-as-a-service (e.g. managed help desk, networks, communications, security, etc.) Small Firms Top 5 1. 2. 3. 4. 5. Cloud-based software development (SaaS) Big Data analytics, data mining and business intelligence Mobile apps development Healthcare tech Everything-as-a-service (e.g. managed help desk, networks, communications, security, etc.) Medium-Size Firms Top 5 1. 2. 3. 4. 5. Big Data analytics, data mining and business intelligence Mobile apps development Healthcare tech Cloud-based software development (SaaS) Everything-as-a-service (e.g. managed help desk, networks, communications, security, etc.) Large Firms Top 5 1. 2. 3. 4. 5. Big Data analytics, data mining and business intelligence Healthcare tech Cloud-based software development (SaaS) Mobile apps development Everything-as-a-service (e.g. managed help desk, networks, communications, security, etc.) Rating of Technology Growth Drivers Northeast Top 5 1. 2. 3. 4. 5. Healthcare tech Big Data analytics, data mining and business intelligence Mobile apps development Cloud-based software development (SaaS) Everything-as-a-service (e.g. managed help desk, networks, communications, security, etc.) Midwest Top 5 1. 2. 3. 4. 5. Big Data analytics, data mining and business intelligence Cloud-based software development (SaaS) Healthcare tech Mobile apps development Wireless services South Top 5 1. 2. 3. 4. 5. Big Data analytics, data mining and business intelligence Healthcare tech Mobile apps development Cloud-based software development (SaaS) Everything-as-a-service (e.g. managed help desk, networks, communications, security, etc.) West Top 5 1. 2. 3. 4. 5. Big Data analytics, data mining and business intelligence Mobile apps development Cloud-based software development (SaaS) Healthcare tech Everything-as-a-service (e.g. managed help desk, networks, communications, security, etc.)