Fear of US recession tops terrorism as main threat to optimism in fall report
HOBOKEN, N.J. -- The Global Technology Confidence Index (GTCI) report for fourth-quarter 2004 was recently released by the Wesley J. Howe School of Technology Management at Stevens Institute of Technology, showing a sharp rise worldwide in business and technology confidence, especially strong regarding the United States and China.
"Confidence moved up again sharply in the fourth quarter," said Dr. Derek B. Smith, director of the Index's parent group, The Global Technology Confidence Indicators. "In a surprisingly strong showing, our Global Technology Confidence Index reached a new high after drifting slightly in the summer quarter. This puts a new complexion on the history of this measure, since it now appears that confidence was not moving into a cyclical downturn last time, but that it had been having a pause for consolidation after the sharp rises between spring 2003 and the first quarter 2004."
"This is the first occurrence where both composite indices have risen - The Technology Confidence Index and The Business Confidence Index," said Eric Koomen, coordinator of operations for GTCI. "Perhaps this combination suggests a solid foundation for short term growth, as we saw immediately following the positive results of our second report from the fall of 2003."
THE GTCI INDEX is composed of both the Technology Confidence Index (making up three-quarters of The Index) and the Business Confidence Index (making up one-quarter of The Index).
TECHNOLOGY CONFIDENCE INDEX
"A strong performance for the Technology Confidence Index had it breaking out of the narrow band around its initial value in which it had been trapped for over a year," said Smith. "This latest figure suggests a more robust interpretation of the time series so far, indicating essentially a 'no change' picture with fluctuations for the first five assessments, with evidence now of a decisive move upwards in technology confidence."
GTCI Technology confidence Index:
Oct.'03: 99.2 Jan.'04: 100.5 Apr.'04: 100.5 Jul.'04: 99.8 Oct.'04: 102.5
BUSINESS CONFIDENCE INDEX
"Following the drop in business confidence in the summer," said Smith, "things improved sharply through the fourth quarter, with the index bouncing back nearly a full point to a new high. Taking the long view, after moving ahead by seven points between our first and second surveys, the confidence index appears to have been oscillating for the past year, unclear whether to break out into new territory or fall back. The latest result is driven by a strong showing from Latin America supported by North America and Japan, but with Europe and the 'Rest of world' falling back a bit."
Among a number of other revealing findings in the GTCI Report:
Confidence hit a new high driven by a strong increase in Latin America supported by North America and Japan, but with a second successive fall in confidence in Europe. Six months ago, terrorist attacks were the main concern of business looking forward. This time a US recession is the chief worry followed closely by oil price volatility.
Innovation management is clearly the area of technology management that executives see as having the most impact on their business.
Outlook for technology investment worldwide remains bullish with nearly two-thirds seeing future growth in their technology investments, on a par with last time. Profitability from product development is the new focus for technology investment. This is the area where investment is seen to have the biggest impact on profits, at the expense of "customer service," which has slipped significantly from top position eighteen months previously, to its current fifth position. Although understanding of business goals by technologists is considered crucial, understanding of technology goals by general management is considered unimportant.
Strong increase in the importance of new products in company sales. The lowest ever recorded percentage of respondents judging their performance in technological innovation to be below average at 2.2%. Product development is clearly considered the favorite area for innovation to impact business over the next couple of years.
Strategic Project & Process Management
Notable decline in confidence in the adequacy of security for information systems compared with 18 months ago. Confidence that technology investment has been prioritized to business goals remains high and steady, a year after first identified. The major concern remains that intellectual property is not being properly leveraged, despite the confidence that respondents show when asked the question differently. This area remains enigmatic.
There was a sharp fall in the proportion who rate their performance in managing technology as above average, off-setting the rise last time. Confidence in the management of technology also slips back, establishing a clear downward trend.
Source: Eurekalert & othersLast reviewed: By John M. Grohol, Psy.D. on 21 Feb 2009
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