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The Role of M&A in Driving Innovation and Growth

Home » Insights » The Role of M&A in Driving Innovation and Growth

The Role of M&A in Driving Innovation and Growth

by Khadija Tahir

While merger and acquisition activity has been in flux in recent months, technology investment remains one of the world’s fastest-growing sectors, driven by innovation and disruption. The industry, has, in recent years, sought to leverage strategic mergers and acquisitions to acquire access to broader tools, as well as users’ data, among others. For instance, Facebook’s acquisition of WhatsApp or Apple’s acquisition of Shazam are examples of such strategic moves.

The industry remains well endowed with cash while growing disruption in the Fintech space means that tech companies continue to eye ways of competing across traditional borders – with acquisitions of start-ups being a popular investment route.

The tech sector was found to be bullish in the global economic picture. 83% of respondents to the latest survey said that global economic growth is improving from their perspective. This represents a solid 20% increase on the same question from the April edition of the survey and a massive jump from 17% in the survey result.

The research notes that the number of respondents who say that their perspective on global economic growth innovation is declining fell from 22% last year to 1% this year. Firms are also bullish about their prospects for growth. With 80% citing improvement and 20% stability – market capitalization in the industry grew by 43% from last year.

In terms of confidence in the rapid growth of the tech industry, market capitalization is across critical indicators. Respondents’ level of confidence in their sector level for corporate earnings hit 71% in the latest survey. A massive 70 percentage point increase from the same period last year. Credit availability increased significantly too, while short-term market stability was cited by 68% of respondents as improving. The industry is well in terms of equity valuations/stock market outlook. Cited by 46% as improving and 51% as stable.

The current strong position of tech industry respondents places them in a comfortable position to consolidate. Expand and access key technologies and talent – through M&A.

Companies can work to realize their deal-making intentions by taking deliberate steps indicated in these pages. Re-evaluate their portfolio review process, and take advantage of modern analytical tools. Prepare for an increasingly competitive M&A market, and pre-plan for integration.

Each acquisition was to help us drive more customer success and accelerate our innovation. We believe that to stay competitive, it is essential to meet customers’ evolving needs at their pace. Which can often be faster than what any company can deliver through their internal development alone. That means that tech companies must think of the ecosystem around us as an extension of our internal development. That’s the cornerstone of good M&A.

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