Intel Summit: The future of tech investment

The ongoing currency squabble between the US and China has put the global economy at a "crossroad between progress and decline", according to former UK prime minister Sir John Major, who was speaking at the Intel Capital CEO Summit 2010 in Huntington Beach, California. He argued that while economic growth in emerging markets will help the ailing Western economies out of the mire, the recovery will be affected by protectionist measures. "If you are devaluing your currency, that is a protectionist measure," Sir John noted.

The annual invitation-only event brings together Intel Capital's portfolio companies' CEOs and industry executives from all over the world. Sir John flew the flag for his home country, saying he did not forsee a double-dip recession in the UK. He also expressed confidence that Europe as a whole would be able to remain competitive in today's economic environment due to its high quality of technology and science.

Indeed, the technology and science theme ran throughout the conference, with a key message being that backing innovation and budding entrepreneurs will lead to financial and social progress.

As such Intel Capital used the stage of its CEO summit to announce 18 recently closed global technology investments, including two European deals. While the majority of new investments comprised US and Asian commitments, the venture investor also backed German network-optimisation software provider IPTEGO with an undisclosed amount, while further leading a $14m second round of funding in Dutch augmented reality platform developer Layar.

In his opening speech, Intel Capital's CEO Arvind Sodhani further highlighted 28 exits the venture investor has completed globally this year, with 16 trade sales and 12 IPOs. The latter figure certainly raised some eyebrows among European attendees, in particular those present from the UK, given the subdued IPO activity seen so far in Europe this year. Indeed, only one of the 12 exits was listed in Europe, with the majority of flotations hailing from Asia and North America. While Asia's booming economies are creating plenty of investor appetite for new listings, Sodhani noted that the prevalent ecosystem of institutional technology investors in the US is enabling such flotations.

In line with stating a theme that will dominate the market at previous summits – such as social networking and the shift to mobility – Sodhani highlighted cloud computing as the theme for the years to come. He bases his assumption on two drivers. First, as developed economies continue to deleverage and consumers continue to save, the contraction of consumption will force businesses to reduce their cost structure, innovate quickly and apply new technologies. Secondly, the high growth witnessed in emerging economies leads to a growing middle class and a significant increase in consumption of new technology products, with more users requiring access to online information through mobile devices. The emphasis therefore will be on innovations in the cloud computing segment to increase efficiency to help businesses cut costs and deal with the surge in demand for resources.

This year's summit will certainly give European venture investors food for thought, as the technology sector becomes more competitive, particularly in the world's developing economies.

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