ICT Survey highlights positive outlook for West Midlands technology SMEs
1,535 ICT and electronics companies surveyed on sales performance, outlook towards international trade and effect of recession on their cash flow
July 14, 2010: The West Midlands ICT Cluster’s annual survey of ICT (Information and Communication Technologies) and electronics SMEs in the region revealed a generally positive outlook for the community.
According to the survey, 30% of the ICT and 25% of electronics companies witnessed an increase in their sales revenue over the last six months. During the same period, 32% of ICT companies and 21% of electronics companies reported a fall in their sales mostly due to customers’ cost cutting measures. Significantly, electronics companies lost little business to cost competition or the introduction of new products to the market. Both sectors were positive about expected sales in the next 12 months.
A major possible opportunity was revealed by the survey. Amongst those companies exporting their products, 52% of the ICT companies and 87% of the electronics companies acquired their export sales as a result of direct enquiries: very few companies appear to actively seek out further export opportunities.
A significant minority of ICT businesses received their export orders through the recommendations of their existing UK based customers to their subsidiary or associated companies located overseas.
The survey also highlighted the impact of recession on businesses’ cash flow. As expected, similar proportions to the numbers reporting a fall in sales reported facing problems in their cash flow owing to the recession: 32% in the ICT sector and 23% in the electronics sector. Amongst these, a much higher proportion of the electronics companies have actually improved their cash flow. On a positive note, few companies have found their cash flow problems to be extreme during the previous 6 months.
While only a small proportion of businesses used sources of business advice, the majority of those seeking advice from the private sector, (62% of the ICT firms and 73% of the electronics companies), turned to their accountants as the first line of advice. Amongst those seeking advice from public sector sources, Business Link proved the most popular for 70% of ICT firms and 67% of the companies in the electronics sector.
Mike Musson, ICT Cluster Manager, said of the findings: “The last 12 months have been tough for all small businesses but we are glad to see that many of the technology companies in the region have survived the worst of the recession. We would like to see more companies engage in initiatives to generate more international trade, especially through projects like Bridging the Opportunity Gap and initiatives by UK Trade & Investment (UKTI).”
To download the full survey, please visit: http://www.wmictcluster.org/Download-document/209-ICT-and-Electronics-Sectors-2010-Survey-Report
For more information about the survey and the ICT Cluster, visit the website www.wmictcluster.org or write to
About The West Midlands ICT Cluster
The ICT Cluster is one of twelve clusters established by Advantage West Midlands as part of its economic development strategy. These clusters have been chosen on the basis of their current strength in the region and their potential to create jobs and economic growth.
Advantage West Midlands is one of nine Regional Development Agencies in England whose role is to provide leadership and action to create more, better jobs and in improve the standard of living for all in the West Midlands.
The ICT Cluster will be hosting the Annual ICT Conference and ICT Excellence Awards on 25 November 2010.
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