A majority of Welsh technology companies expect an increase in sales, jobs and investment over the coming year and most also plan to expand research and development activities to drive growth.
More than nine out of ten predict rising revenues, while eight out of ten plan to recruit more staff and just over half expect to spend more on research and development in order to bring innovations to market.
Around ninety per cent said they believed there would be a need to increase overall investment in their businesses in the next 12 months.
This encouraging picture of Wales’ electronics and software technologies sector is contained in the Welsh Technology Report, an in depth study published on 13 January by the the ESTnet in collaboration with professional services firm, Deloitte.
Focusing in detail on the experiences and expectations of 50 Welsh technology companies of all sizes, the landmark document provides a snapshot of success and growing optimism. Of the firms questioned, 77% said they were more optimistic about the Welsh economy than they were last year.
Moreover, almost 70% of respondents said they were active in export markets and, of these, more than half earned in excess of 50% of their income from overseas markets. Exporting was not confined to the large enterprises, with a fifth of those selling goods and services overseas having less than 10 employees.
The respondents said that innovation was one of the key drivers for growth in a sector that undertakes a significant volume of research and development. Most companies said they undertook research and development activities in Wales. About half said they collaborated with other companies to innovate new products or services, while a similar proportion said they collaborated with Welsh universities.
Access to a skilled workforce was also identified by firms as an important factor for future growth and the report does indicate concerns about skills shortages, with 41% of respondents pinpointing the availability of skills and staff as a factor potentially limiting growth. This sector demands highly skilled staff, with 76% of employees working in technical or professional occupations.
Despite the skill shortages, the majority of firms are planning to increase employee numbers this year with many expecting to recruit graduates and apprentices. There is also interest in offering industrial work placements to undergraduates to develop their employability skills.
The report highlighted a lack of awareness of government support available that could help them develop and grow. This was particularly true of European grants, such as Horizon 2020 and support for exporting. Only 13% of firms had attended a trade mission in the previous two years, although virtually all of those who had attended said the exercise had been successful.
The technology sector represented by the ESTnet employs more than 24,000 people in Wales, generates around £7 billion a year and includes many of the Welsh Anchor and Regionally Important Companies.
Ian Menzies, Chairman of the ESTnet described the report, as the most important and comprehensive survey of the electronic and software technologies industry in Wales to date.
“The results are significant and full of promise. They show a technology industry in Wales where confidence is increasing within an improved economic context, but they also set out specific challenges for the ESTnet and other stakeholders to ensure the industry achieves its full potential,” he said.
For a full copy of the report click here.