Technology, media and telecoms (TMT) businesses have been the most resilient to the Covid-19 crisis, with 80% being classed as resilient, according to the Growth Index released today by midmarket private equity firm ECI Partners.
70% of TMT businesses predicted growth throughout 2020, even after the pandemic had begun in March (a fall from 90% pre-March 2020). Of all the sectors surveyed (financial services, business services, consumer, TMT and healthcare) TMT businesses were the most optimistic about their future growth.
Tom Wrenn, Partner at ECI Partners said:
“The Covid-19 crisis has demonstrated the importance of resilient business models as companies face the unprecedented challenge of the pandemic. Typically, TMT businesses operate subscription-based or high recurring revenue models that would have enabled them to service clients during the crisis, and have visibility of future revenues, both of which are key characteristics of resilience.
“We shall need our high growth businesses to help us find the path to recovery after the economic hibernation of 2020. The fact that TMT businesses have fared so well and are feeling confident about their growth prospects is great news for the UK’s economy.”
Other key findings of the Growth Index include:
• Only 18% of TMT businesses see Brexit as a key short term concern (compared to changing pandemic guidance at 44%, global economic downturn at 44% and lack of customer/client spending at 42%)
• 76% of TMT business have an international presence, of those 51% have operations in North America
• Of those looking to expand overseas, over half (56%) expect to grow into Europe, followed by North America (44%) and Asia Pacific (36%)
Tom Wrenn continues:
“Brexit not being deemed as a top priority for firms is surprising yet encouraging for the post-Brexit world we will soon be faced with. It is a positive sign, but whether this is because it has simply been superseded by prevailing ‘known’ threats will play out in the coming months.
Our research shows that businesses without an international presence are three times less likely to be resilient, so the fact that so many TMT businesses have an international presence is positive. With these factors in mind, its promising to see TMT businesses seeking international expansion as a fuel for growth in the year ahead.”