NEW YORK, USA: Technology executives believe that the technology sector will recover from the current economic crisis substantially more quickly than the U.S. economy, with senior business leaders expecting improved revenue and profitability in 2010 and about half seeing an improved job picture, according to a recent survey of hardware and software company executives conducted by KPMG, an audit, tax, and advisory firm.

Two-thirds of the senior technology executives surveyed said they thought their industry would fully recover from the current economic crisis ahead of the overall U.S. economy. Silicon Valley-based executives were even more bullish, with 77 per cent of them expecting the technology sector's recovery to outpace the U.S. recovery, said a press release.

About 43 per cent of the technology leaders expected the U.S. economy to recover after 2010 while 39 per cent predicted the economy would recover by next year.

Eight out of 10 executives surveyed said they expected business conditions in the technology sector to improve in 2010, with 78 per cent expecting stronger revenue and 72 per cent expecting improved profitability, the release said.

"The results are in line with recent earnings reports in the technology sector which suggested business conditions are starting to improve," said Gary Matuszak, partner, global chair and U.S. leader for KPMG's Information, Communications & Entertainment practice.

"There are also reports of software industry sales expanding five to ten percent annually after the recession, so while it's far from blue skies in the industry, the worst seems to be behind us," Matuszak added.

The KPMG survey asked the executives to indicate if their strategic focus was on cost cutting or investing for long-term growth. The results showed that most technology executives were focused on building the business with 69 per cent indicating they were placing emphasis on long-term growth versus 31 per cent who said they were focused on cost cutting, the release further said.

When asked how they responded to the economic downturn in the past year, the most frequently cited action was reducing headcount (68 per cent). However, only 14 per cent of respondents said they are planning or considering further reductions in 2010. In fact, technology executives are fairly optimistic about the industry employment picture in 2010, as 49 per cent expect it to be better, the press release added.

The second most frequent action cited in response to the downturn was cutting capital expenses (60 per cent said they already had done so and 28 per cent were considering or planning cuts). When asked what else they would do to adjust their business to the downturn in 2010, 42 per cent of executives said they were creating or modifying risk management plans and another 42 per cent said they were looking at implementing IT solutions to reduce operating costs.

When asked to identify the top three triggers they think will spur an economic recovery, 42 per cent of the technology executives cited improved business confidence, 41 per cent suggested improved consumer confidence, and 32 per cent said an improved job market. Increased consumer spending was fourth (30 per cent) but was most frequently cited by the hardware technology company executives (39 per cent).

The three triggers cited least frequently were effective regulation (6 per cent), government stimulus spending (5 per cent) and the government bailouts (4 per cent).

The biggest challenge in dealing with the economic downturn for 66 percent of the executives was finding new sources of revenue, while managing costs and restoring business confidence was cited by 42 per cent each, Adjusting to changing customer demand was the biggest challenge for 37 percent.

The KPMG survey was conducted from May through July of 2009 and reflects the responses of about 130 CEOs and other C-level suite executives in the hardware and software computer industry. Of the 130 respondents, 33 are companies with revenues exceeding $1 billion, 22 are companies with revenues in the $250 million-$1 billion range, and 75 are companies with revenue below $250 million. Clarion Research Inc. conducted the survey and compiled the data.