By Mike King
Yesterday’s 0.5 percent cut in the base rate, down to 1.5%, the lowest since the Bank of England was founded in 1694, raised further questions about how bad things are going to get before they start to improve.
One thing is for sure, while everyone else in the UK is talking about the current recession being the first since 1991, in the tech industry we’re different. As if any of us could forget, we had the deep, prolonged tech recession that started in 2001 and I’ve seen it argued that this time around we could fare better than many other sectors. Part of the rationale for this is that because we’ve so recently come out of a downturn, many technology firms are running lean and aren’t carrying excess fat.
Even though Alistair Darling now accepts that the current economic malaise is going to be a lot worse than a six month blip, there is still reason to have some faith in the tech industry’s durability. For a start, those areas of tech that directly improve operational efficiency are well placed. There are also areas that simply can’t be neglected, such as IT security, where spending levels remain strong. Cloud computing, mobile applications, gaming and digital entertainment are all examples of other areas that are still seeing decent growth.
That isn’t to say that the entire technology industry is immune to recession fever. From our own point of view, we were originally aiming to grow this year but we’ve revised our plans and expect business to be flat. So far, eight months into our current financial year, billings are the same as at this point last year. For us, it is a case of working very hard to stand still. Not great, but a lot better than it could be. Ask anyone in retail, financial services or property how that sounds, and I’m sure they’d grab it with both hands.
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