The tech sector is in a “terrible” place, according to a report by consulting firm Technomic.
The report, called “The Technology Sector: What It’s Doing Right Now and What It Needs to Do Better,” says the tech sector has become increasingly dependent on government assistance.
Technomic’s report is based on an analysis of a variety of data points, including the number of people employed in the tech world and its workforce participation rate, the percentage of tech jobs that are held by people with advanced degrees, and the percent of tech workers in the United States who are minorities.
The tech sector “has never been more dependent on public funding for its economic growth and development,” the report states.
“In the last few years, however, this dependence has been growing exponentially.”
The report notes that government subsidies are now at record levels, and “the U.S. economy has become a more competitive place to work, with companies moving to cities and counties where they can access government support.
This trend is making it increasingly difficult for the tech sectors to attract the talent they need, and it has had a negative impact on job growth in many sectors.”
According to the report, tech companies have been unable to secure enough private sector funding for expansions and new projects, and that “this has led to an over-reliance on government contracts for critical capital expenditures.”
Tech companies have also been unable or unwilling to “pursue business growth in areas where there are significant economic barriers,” the technomic report states, with the “dramatic decline in business growth” that has occurred in sectors such as finance and technology.
“Companies have also become increasingly reluctant to expand into new and different areas,” the research states.
For instance, “as companies have turned to the financial services industry for financing their expansion plans, they have been forced to rely on financial institutions that have been unwilling to expand beyond the financial sector.”
The technomic study points out that the techs are “not as competitive in some of the areas in which they have grown and therefore have not been able to attract enough talent to compete with other companies, such as in finance and in information technology.”
The report also notes that “the tech industry, by the nature of the jobs it provides, has become more reliant on government support than it was 10 years ago.”
The tech industry’s dependence on government subsidies has also been detrimental to innovation, the report notes.
“The technology sector has failed to adapt to the changing global economic landscape, and has not been a leading force in innovation,” the study states.
Technomics report is titled “The Changing Tech Economy.”