Technology leaders in the greater Washington region are bullish on the direction of the local economy and ready to reinvest in the community, according to a new study.
Over the past few years, the area has inarguably grown into an information technology center, and the buzz surrounding the explosion has been positive.
But executive recruiting company Korn/Ferry International makes it official today, releasing findings of a High Technology Executive Study, a survey of 100 top-level area players about the state of the region's information economy.
Conducted for Korn/Ferry by Wirthlin Worldwide in McLean, Va., the findings show that an overwhelming 96 percent of those surveyed said that companies representing the technology industry in the Washington area are "heading in the right direction."
"Our business community feels very confident about the future," said April Young, executive director of the Potomac KnowledgeWay, commenting on that statistic.
Signaling that executives will put their money where their sentiment is, 97 percent said they were strongly committed (72 percent) or somewhat committed (25 percent) to reinvesting in the greater Washington area in the future, provided that their company is profitable, according to the findings released exclusively to Washington Technology.
Craig Fuller, managing director of the Washington office of Korn/Ferry, said he expected optimism but not of that magnitude. For example, he said, a two-out-of-three response on the "right direction" question would have been considered extremely positive.
"We believe the next five to seven years are going to be real vibrant," said Rogers Novak, partner in the Reston, Va., venture capital firm Novak Biddle Venture Partners, commenting on the study. "There was a lot of hype early on, but now it's come to fruition." Novak said he was interested to see the area so positive on itself. "It becomes a self-fulfilling prophecy."
However, Novak had one criticism: He would have liked the study to break down what "heading in the right direction" means.
The study found that 22 percent of those surveyed said risk capital in the Washington area is very available, while 55 percent said it is somewhat available. "There are more opportunities for funding than a year or two ago," said Fuller.
But not all the findings showcased the area's positive qualities. Asked to name the single greatest challenge facing the region's technology industry, 43 percent said shortage of skilled labor. Sixteen percent of the respondents said moving to different technologies was the biggest challenge.
While George Newstrom, vice president and government services group executive in the Herndon, Va., office of Electronic Data Systems Corp., said many of the study's findings were right on track with what he's been thinking, he said he was disturbed that only 43 percent put recruiting at the top of the list of challenges.
"I'm surprised that number is so exponentially low," Newstrom said. "If 57 percent don't see this as No. 1, that's a problem. This is not a simple fix."
Fuller said if companies can't find the employees they need, they may look elsewhere to relocate or expand their business.
However, Novak noted that the local problem has not matched the level of difficulty of recruiting in Silicon Valley. "It is next to impossible there to pay for talent. We don't have that same mindset here yet," he said.
Overall, 49 percent of those surveyed said the greater Washington area was equal to other high-tech centers such as Silicon Valley, Boston's Route 128 and Research Triangle Park in North Carolina; 17 percent said the area is better, and 23 percent see it is worse.
A main use of the study's findings will be as a recruiting tool, said Fuller. The feeling of optimism shows executives feel their companies, jobs and the area's economic climate will be stable for the next three to four years, said Fuller. "It all bodes well for the community," he said. The high-tech industry fuels optimism, said Fuller. "The people and companies here are not intimidated by change, and they adapt quickly to new demands," he said.
The next step, said Young, is to start spreading this news instead of preaching to the choir. "We need to be telling the story better outside the industry," she said.