leaders technology new remote arizona companies growth

Industry Outlook 2019-2020: High-TechThis Industry Outlook is a portion of the 2019-2020 Arizona CFO SpotlightSurvey Reportcfosurv/circle-computer-chip## Levels of Optimism: ModerateTechnology companies experienced slower growth in 2018, which was expected dueto some local merger activity and a focus on research and development (R&D) toget new products ready for the market. Leaders are cautiously optimistic withexpectations of 10-20 percent growth in a crowded and competitive environment.Technology companies made modest price increases last year and raised wagesfor key employees, but they are reining in spending after large investments inR&D. The atmosphere is one of continuing innovation, leaders say, becauseproduct shelf life is much shorter.Leaders say that growth areas are in cyber and data security (includingmanaged services) as well as SaaS (Software as a Service) rather than inactual software. Cloud and subscription-based services are taking the lead aswell as Internet of Things, data collection and connectivity innovations.Recently, stratospheric technology company, World View named a new CEO to leadcontinued innovations in unmanned flight systems and aerial remote sensing.### Tech Launch Arizona prompted 16 start-up companies over the past fiveyears.High-tech leaders are seeking efficiencies of scale to deal with laborshortages and more remote workers. Leaders admitted that their in-personcheerleading events with employees–some of whom work in other states andcountries–are transitioning to virtual communications in order to reducecosts. Office space is also shrinking due to remote worker trends and morevirtual collaboration.As competition increases, leaders expect to see fewer public contracts andeven tighter budgets. For example, in 2017 it was reported that the City ofPhoenix wanted to purchase a new Pavement Management Van. The previous van wasalready 10 years old. The new van is a significant purchase, equipped withupdated technology to detect the condition of roadways and help thetransportation department prioritize their infrastructure improvements. Thevan is already scheduled to survey more than 5,000 miles of roadway over thenext two years.“We’ve put a lot of time and energy into our recent merger and into R&D, andgetting the products we sell to be very marketable. We are optimistic on thatside, but we have learned from the past to be more cautiously optimistic.”High-Tech Controller, Tempe, 2019However, investor appetites for technology are still high. Results from theUniversity of Arizona’s Tech Launch Arizona over the past five years recorded275 invention disclosures from faculty, researchers and staff campus-wide, 112executed licenses and options, and 16 startups–all record-breaking numbers.The majority of TLA’s work is licensing inventions to existing companies,according to a spokesperson. Arizona’s academic history in sciences likelyprovides a solid foundation for continued high-tech innovation among existingand new companies.### Contact UsEric MajchrzakEric Majchrzak is a shareholder and chief strategy officer of BeachFleischmanPC.