Venture Capital and Principal Trading Named Industry Of The Year
Surging IPOs Drove Industry Revenue And Growth In 2011, According To IBISWorld
Industry research firm IBISWorld named Venture Capital and Principal Trading the industry of the year for 2011. Its impressive revenue and industry value added (IVA – a measure of the industry’s contribution to the US economy) growth has propelled this industry in front of the pack in 2011. Revenue and IVA are estimated to expand by 36.0 percent and 4.8 percent respectively, highlighting the performance of venture capitalists and traders. The largest portion of the industry is occupied by venture capitalists (VCs), which comprise an estimated 50.0 percent of industry revenue, or about $32.1 billion in 2011.
“The initial public offering (IPO) market has surged this year as many high-profile companies went public and provided exit opportunities for VCs that originally invested the start-up capital,” explained IBISWorld senior analyst Justin Molavi. “The IPOs of LinkedIn, Groupon, and the planned IPO of Zynga are key examples of the trend. Many prospective companies that were looking to IPO sat on the sidelines during the recession, in an effort to time the capital markets correctly and reign in high stock price valuations.”
In response to favorable IPO markets, VCs have ramped up investments in start-ups over 2011. Although these investments take some time to pay back, they have created a favorable environment for starting companies, especially in the technology space. As a result, many new ideas have been birthed, resulting in job growth and a slew of new tech savvy ideas that will change the way that people interact socially, the technology used on a daily basis, and the way businesses streamline costs.
Internet Publishing and Broadcasting
Internet publishers offer news, subscriptions and other services via websites and forums. Barriers to entry into the industry are low, allowing for a wide range of ever-evolving content to be created. The alluring opportunities that the industry provides have helped grow the number of industry participants over the past five years; in 2011 alone, the number of websites grew by 9.3 percent to 50,558. Additionally, the ability to monetize web content (that is, to post sponsor advertisements and links) has allowed participants to increase their revenue. In 2011, industry recorded revenue growth of 24.2 percent from 2010, totaling $40.4 billion. Its IVA grew 6.0 percent during the year, reflecting growing profit margins and wages. The growing number of websites and online resources reflects the demand for easily accessible information; as such, the Internet Publishing and Broadcasting industry is an important part of the US economy, filling an ever-expanding need and contributing to GDP growth.
Firms in the Mining Services industry provide support services to mining companies. Demand (and revenue) is derived directly from mining industries, so as activity downstream increases, so does growth in this industry. In 2011, the world price of crude oil and the world price of natural gas each increased by about 30.0 percent. This stimulated activity in the respective mining and extraction industries, thereby boosting demand for mining services. Revenue for this industry increased 30.5 percent through 2011, while its contribution to the US economy jumped 42.7 percent. The industry’s importance to the domestic economy and various foreign economies makes it a top contender for IBISWorld’s Industry of the Year.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189