Midsize tech industry leaders are more optimistic about the year ahead than U.S. executives overall, according to our 2023 Business Leaders Outlook survey.
Most tech leaders are positive about the global (57%), national (58%) and local (63%) economies—all at significantly higher rates than midsize U.S. business leaders in general. More than three-fourths (77%) are also optimistic about their industry’s performance in 2023, with 85% optimistic about their own company’s performance. And the majority of tech leaders surveyed expect increases in their revenue/sales (84%) and profits (73%).
But leaders anticipate challenges ahead—55% expect a recession in 2023. Most respondents still are dealing with inflation (76%), and nearly half said their supply chain issues have gotten worse over the past 12 months. To mitigate these pressures, tech leaders are mainly focused on raising prices (51%) and automating more processes (43%).
These challenges, however, may not hinder growth; 84% of leaders plan to add or keep employees this year. And roughly half are competing in the tight labor market by giving employees flexibility on where they work (52%) and when they work (48%).
About the survey
Started in 2011, the annual and midyear Business Leaders Outlook survey series provides snapshots of the challenges and opportunities facing executives of midsize companies in the United States.
This year, 265 midsize tech industry respondents completed the online survey between Nov. 29 and Dec. 13, 2022. Results are within statistical parameters for validity; the error rate is plus or minus 6.0% at the 95% confidence interval.
Economic outlook for 2023*
Global economy: Optimistic 57%; Neutral 16%; Pessimistic 27%
National economy: Optimistic 58%; Neutral 17%; Pessimistic 25%
Local economy: Optimistic 63%; Neutral 24%; Pessimistic 13%
Industry performance: Optimistic 77%; Neutral 14%; Pessimistic 9%
Company performance: Optimistic 85%; Neutral 9%; Pessimistic 5%
*Among respondents who indicated they work in the tech industry.
Bullish on their own businesses
The vast majority of tech businesses (95%) expect their revenues to grow or hold steady. A slightly smaller percentage (90%) expect their capital expenditures to increase or remain the same.
Business expectations
Revenue/sales: Increase 84%; Remain the same 11%; Decrease 6%
Profits: Increase 73%; Remain the same 19%; Decrease 8%
Capital expenditures: Increase 61%; Remain the same 29%; Decrease 10%
Election effects
Tech leaders generally don’t expect many changes due to recent elections.
Sentiment following the 2022 elections*
Climate change concerns: Worse 14%; Same 49%; Better 37%
Inflation: Worse 33%; Same 38%; Better 29%
Regulatory environment: Worse 13%; Same 45%; Better 42%
Trade policy: Worse 12%; Same 46%; Better 42%
Corporate taxes: Worse 18%; Same 46%; Better 35%
Infrastructure: Worse 9%; Same 50%; Better 41%
Government favorability toward businesses: Worse 13%; Same 51%; Better 37%
*Among respondents who indicated they work in the tech industry.
Business challenges
U.S. tech leaders face a number of challenges today, including persistent inflation, snarled supply chains, declining valuations and a competitive labor market.
How are your costs of business changing*
Costs are rising: 76%
Costs are staying the same/declining: 24%
*Among respondents who indicated they work in the tech industry.
What’s driving up the cost of doing business*
Retaining/hiring employees: 66%
Supply chain: 57%
Energy costs: 56%
*Among respondents who indicated they are experiencing inflation.
Top ways companies are adapting to inflation*
Raising prices: 51%
Automating processes: 43%
Changing pricing model: 40%
Prioritizing most profitable products: 38%
Watching change in relative prices: 38%
*Among respondents who indicated they are experiencing inflation.
Top responses to the labor shortage*
Invest in automation: 60%
Increase wages and/or benefits: 60%
Provide flexible work location: 52%
Offer upskilling/training: 49%
Offer flexible hours: 48%
*Among respondents who indicated they are planning to increase staff or maintain their current headcount.
Top external business threat*
Cybersecurity and fraud: 22%
General market volatility: 15%
Competition: 15%
Access to capital: 15%
Energy prices: 12%
Local currency value volatility: 7%
*Among respondents who indicated they work in the tech industry.
Social responsibility
Top areas of focus within corporate responsibility*: Governance 46%; Diversity, equity and inclusion 56%; Social 60%
*Among respondents who indicated they work in the tech industry.
Top objectives motivating corporate responsibility*
Improve employee retention: 62%
Enhance marketing and find new customers: 54%
Build company culture: 51%
*Among respondents who indicated they plan to focus on an area of corporate responsibility in 2023.
Business transitions and growth plans
Plans for business transfer
Yes, full transfer: 31%
Yes, partial transfer: 22%
Timeline to transfer business*
Within the next 2 years: 84%
More than 2 years from now: 16%
*Among respondents who indicated they have a full or partial business transfer plan in place.
Growth strategies for the next 12 months
Introduction of new products/services: 63%
Expand into new domestic markets: 48%
Strategic partnerships/investments: 47%
Expand into new distribution channels: 46%
Expand into new international markets: 42%
Impact of declining tech valuations
Hiring/talent management: Positive; 51%; None 34%; Negative 15%
Growth projections: Positive; 42%; None 42%; Negative 16%
New product development: Positive; 49%; None 41%; Negative 10%
Current liquidity/runway projections: Positive; 35%; None 47%; Negative 18%
Fundraising: Positive; 36%; None 45%; Negative 19%
Survey demographics
Who took the survey
CEO/chairman/chairwoman: 34%
CFO: 26%
Other C-level: 22%
Owner/founder: 11%
Other: 7%
Company size by number of employees
1-49: 5%
50-99: 7%
100-249: 12%
250-499: 15%
500-999: 31%
1,000-4,999: 27%
5,000+: 3%
Company size by annual revenue
Under $20mm: 8%
$20mm-$100mm: 39%
$101mm-$499mm: 52%
$500mm+: 1%
Note: Some numbers may not equal 100% due to rounding.
JPMorgan Chase Bank, N.A. Member FDIC. Visit jpmorgan.com/cb-disclaimer for disclosures and disclaimers related to this content.
Midyear survey
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