The global IT-industry downturn has failed to dampen UK new-media firms' optimism for the future, a report commissioned by Adobe UK shows.

The research, called Brave New World,
was undertaken by market-research firm e-MORI. It reveals that UK new-media firms remain upbeat about the future. Over 90 per cent of new-media bosses predict an average 27 per cent increase in turnover this year.

Nicky Perrott, head of e-MORI said: "The industry has a healthy basis for growth in the future."

Unscathed Adobe UK's marketing director Ricky Liversidge said: "The report shows the UK's new-media industry has escaped largely unscathed from the dot-com crash, and reveals a rapidly maturing industry – confident of continued and steady growth in the near- to mid-future."

A total of 83 per cent of Internet agencies are independently owned. The report reveals most of these have not yet initiated international expansion plans. The companies are searching for partnerships with complementary firms, and many expect a wave of consolidation within the industry.

The new-media sector currently employs over 25,000 people and contributes £1.5 billion per year to the UK economy. This is predicted to rise to £2 billion by the end of 2001.

Future growth is expected to be driven by trends that Adobe is seeking to cater for with its network-publishing strategy. These include the introduction of compact, mobile Internet-ready devices, WAP phones and interactive TV.

Broadband boom Growth is also being driven by the increasing adoption of office and consumer broadband technologies – including ADSL, cable modems and ISDN. Over one third of heads of design interviewed believe that designing for broadband networks will constitute a majority of their work within a year. An additional 29 per cent of respondents predicted this will occur over the next two years. "Broadband is a mass market opening up," said one interviewee anonymously.

Arjo Ghosh, managing director of Spannerworks, which was quoted in the report says: "Interactive TV is a huge area for growth. You don't need a computer, you don't need a modem, everyone has a TV."

Tim Becket, MD of Circle.com, said: "A multi-channel strategy is central to growth. Ninety per cent of what we do is delivering content. However, the key for next year will be our multi-channel strategy."

Recruitment challenge Although the new-media industry is actively recruiting, the report explains that this poses new challenges. Three in five agencies find it difficult to recruit qualified staff.

"It's tough to get the best staff because recruiting them is enormously competitive," said Tim Moore, managing director Ion Global. Technical skills are most sought after, with 22 per cent of MDs finding these tasks difficult to recruit for.

However, the dot-com crash did release a wave of technically experienced staff which were snapped up by agencies.

Those involved in online publishing, expansion into Europe and the increasing adoption of devices for Internet-access expect to have their work cut out, the report states. 61 per cent of MDs are optimistic regarding growth into 2003.

Liversidge added: "No longer can new media be seen as an industry without any firm foundations, proven business acumen or powers of reflection. The players of today have learnt valuable lessons from the rollercoaster ride they have experienced and most importantly, are bravely facing the future with strength and optimism."

Concise and full PDF versions of the report are available from Adobe.