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Technology Leaders Predict Re-Election for President Obama, but Think Romney Would Give a Bigger Boost to the Technology Economy

Leaders describe a ‘new normal’ in the economy, IPO market and VC model

  • 76 percent of tech leaders expect President Obama to be re-elected
  • 64 percent believe Romney would be better for the technology economy
  • 64 percent see an increased threat of regulation for the PE and VC industries
  • 51 percent don’t think China will quickly emerge as a major technology economy

MENLO PARK, Calif.--(BUSINESS WIRE)-- A strong majority of technology leaders (76 percent) think that President Obama will earn re-election in November, despite the fact that most technology executives (64 percent) believe his opponent, Governor Mitt Romney, would have a more positive impact on the technology industry, according to the DLA Piper Technology Leaders Forecast Survey. The study was released today in conjunction with DLA Piper's Global Technology Leaders Summit taking place at the Rosewood Sand Hill in Menlo Park.

In fact, 60 percent of business leaders are skeptical that a second term for the Obama administration would have a positive impact on the technology sector. The partisan tables have turned since the 2008 election, when nearly 60 percent of tech executives believed that then-Senator Barack Obama would have a more positive impact on technology development and investment than his Republican challenger, Senator John McCain.

“Regardless of the election’s outcome, it seems clear that what technology leaders want out of Washington is greater clarity on regulation and tax policy. Those themes surfaced prominently in our latest version of the survey,” said Peter Astiz, global co-head of the Technology Sector at DLA Piper.

Presidential debate stirs concerns on regulation of private equity

A strong majority (78 percent) of respondents believe that the presidential campaign dialogue surrounding private equity has damaged the reputation of the private equity and venture capital industry, and 65 percent expressed concern that this focus could likely lead to new regulation of the industry.

Perhaps the biggest debate facing the President and the Congress immediately after the election will be the looming "Fiscal Cliff” and a decision on the expiration of the Bush-era tax cuts. Most respondents (60 percent) think allowing the Bush-era tax cuts to expire would negatively impact investments in the technology sector. However, perhaps counter to the conventional wisdom, a notable minority (33 percent) of technology business leaders think expiration of the tax cuts will have no direct impact on the growth of the technology sector.

Tech leaders predict steady but slow sales and hiring growth

The business leaders surveyed overwhelmingly expect both sales and hiring to increase, but generally at very moderate rates. Seventy-two percent said sales would increase at their organizations, with three-quarters of those forecasting only moderate sales growth. Fifty percent indicated their organizations are planning on moderate hiring increases over the next 12 months, with 27 percent planning on flat staffing levels.

“Amid global economic headwinds, business leaders say there is a ‘new normal’ in which technology companies operate. Tech leaders seem to have lowered their overall expectations for growth, while still remaining confident in the fundamentals of their own businesses,” said Astiz. “While generally positive, this does not suggest that the technology economy will be buoyant enough to lead the overall economy out of the current doldrums.”

Economic headwinds challenge tech startups and the IPO market

Technology leaders identified those uncertain economic conditions (51 percent) and access to capital (51 percent) as the most significant challenges facing technology startups. The economic headwinds were also cited as a leading challenge to a more robust IPO market (59 percent), as well as the recent lackluster performance of major IPOs (65 percent) and over-regulation (27 percent).

In a DLA Piper survey conducted in the first quarter of 2012, nearly 75 percent of technology leaders stated that they believe the IPO market will not return to the historical levels. More than 60 percent said the traditional venture capital model had been permanently altered

“The reduction in IPOs has broader implications, reducing the number of dramatic home runs for venture capital investors and lowering overall returns. Fewer IPOs also means fewer small- and medium-size public technology companies, which traditionally have been the acquirers of smaller tech companies,” said Astiz.

Greatest tech opportunities seen in mobile, cloud computing, big data

“Despite challenges, technology leaders are optimistic and forward-looking by nature – constantly seeking the next big idea, the next big innovation,” said Rich Scudellari, co-managing partner of DLA Piper’s Silicon Valley office.

When asked what technology sectors hold the most promise for entrepreneurs and investors in the near-term future, respondents ranked (1) mobile computing and (2) cloud computing as the most promising, followed by (3) big data.

China’s progression as a superpower in the global technology industry continues

Recent DLA Piper surveys have uncovered a growing uncertainty about how easily the Chinese economy can successfully transition beyond a strong manufacturing-oriented economy to include a strong technology and innovation economy. In the Q1 2012 survey, 41 percent of executives predicted that China will have difficulty transitioning to a technology and innovation economy, up from just 18 percent two years ago.

In the Q4 2012 survey, technology leaders rated China as indispensable to manufacturing (91 percent); as a key market for technology sales (81 percent); and increasingly as a source for financing technologies (45 percent).

However, respondents were less decisive on China’s role as an innovator and developer of new technologies: 34 percent thought China would only be “somewhat important” to technology development within the next few years, while 28 percent said they did not expect China to play an important role in technology innovation in the near term. Only one in 10 business leaders expect China to be a major contributor to technology innovation within the next few years.

For a copy of the full DLA Piper Technology Leaders Forecast Survey report, visit To join the conversation on Twitter, comment at #DLATechSummit.

About the DLA Piper Technology Leaders Forecast Survey

The DLA Piper Technology Leaders Forecast Survey is an examination of the current perspectives and attitudes on the major trends, challenges, and opportunities confronting the technology industry. The survey was conducted in late September and early October 2012.

About DLA Piper (

DLA Piper has 4,200 lawyers in 31 countries and 77 offices throughout the Americas, UK, Continental Europe, Middle East, Asia and Australia. In certain jurisdictions, this information may be considered attorney advertising.

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Source: DLA Piper