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KEEPING THE TMT INDUSTRY AIRBORNE

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Uncertainty may be mounting for mid-sized technology, media and telecoms (TMT) businesses but there is every reason for business optimism, according to a new report by Grant Thornton.

The optimism of more than 450 TMT leaders in nearly 40 economies – surveyed as part of the latest International Business Report (IBR) – fell from 45 per cent to net 29 per cent in the first half of 2019 with expectations around revenues, profits and employment also taking a hit.

In the past two years, the European Commission has imposed $9.5 billion in anti-trust fines against Google, while Facebook has been subject to probes from data protection authorities since the General Data Protection Regulation (GDPR) came into effect in 2018.

However, Grant Thornton Isle of Man believes mid-sized businesses actually have the opportunity to act as trailblazers as companies look to transform their digital and technological offerings.

Lisa Lord, an Associate Director at the Athol Street-based firm, says businesses in other industries have looked to new technologies as the path to transformation and the TMT industry can also ride out the turbulence and thrive.

She explained: ‘Of course, there are higher levels of economic uncertainty in the industry and that isn’t a surprising aspect with mounting political and regulatory scrutiny for some of the TMT’s biggest players. A lot of these businesses which Grant Thornton works with are global so any increase in regulation will naturally drive up costs.

‘Yet this is also a time of opportunity and it’s important to recognise where demand is likely to grow and make suitable strategic investments. One way is to gain access to the best talent the market has to offer.’

According to IBR research, trade barriers have exacerbated long-standing concerns around skill shortages and migration of labour. Almost half of TMT businesses questioned availability of skilled workers as a major constraint, second only to the transport and healthcare sectors.

Software company Planixs, recently ranked as one of the UK’s fastest growing tech firms, moved their operations to Manchester in late 2018 to access the right talent. In close proximity to four major universities, Planixs now has contact with a steady talent pipeline, and can take full advantage of Manchester’s new position as a centre for tech investment.

Governments worldwide are using a variety of incentives to stimulate research and development and information technology investment.

Lisa added: ‘Thinking longer-term can certainly help businesses ride out uncertainty and turn potential risk into opportunity. TMT firms can help themselves to attract and retain the specific talent they need to thrive and invest accordingly, as well as gain access to the tools they need to transform their products and services.

‘The demand for certain technologies is likely to grow, particularly cloud services, fintech, video games and streaming, so with careful strategic planning there not need be barriers and optimism can be realised.’

 

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