A series of downbeat reports, from Silicon Valley's own quarterly venture capital confidence index and the US National Small Business Association, have warned that due to the closure of credit markets, VC funds are struggling to support the next generation of IT business start-ups.

Within days the Valley index is expected to report a fourth consecutive negative quarter, the first time this has occurred since it was established five years ago in the wake of the dotcom bubble at the turn of the millennium.

The result is that businesses far from Wall Street are continuing to experience increased financial pressures, fuelling rising concerns of reduced spending and mass lay-offs in the weeks and months to come.

Reports out of San Francisco suggest that technology stocks, viewed as a safe harbour in the first part of this year, are "sharing the pain" of other industries in the third quarter.

One of the hardest hit tech firms is internet search company Google, whose shares have endured their toughest year since it went public in 2004. Recently, investors have punished Google on worries that shrivelling advertising budgets will impair its ability to maintain its rapid growth.

Executives at Microsoft used a visit by a delegation from Highlands and Islands Enterprise to its headquarters in Redmond near Seattle last week to say they were relatively upbeat and remained hopeful that the IT sector, although certainly not immune to the troubles facing worldwide economies, should weather the downturn. But it would be tough.

Bob McDowell, a vice-president, applauded the Scottish group, representing both the public and private sectors, for making the 4,360-mile trip to find out more about how technological solutions can provide the answer towards achieving its goals and better coping with the financial downturn.

The HIE briefing room at Redmond was flanked by similar executive briefings of delegations from the Czech Republic and Nestlé of Switzerland.

McDowell, who makes regular trips to Scotland, where he sits on the international board of Scottish Enterprise, said that it had been well documented how the financial services sector was undergoing massive change.

James Oker, Mirosoft's director of program management (research), told the HIE group that the company would not be slowing down its annual $7bn research and development spend.

"It is all about getting top-class people together and letting the team loose to achieve the next big round of world class technological ideas and products for the marketplace," he said. HIE prides itself on innovation, including superior broadband connectivity, compared with other areas of the UK.

Shetland leads the way with a 60%-plus broadband take-up, followed by Moray, Aberdeenshire and Orkney. But the agency is not resting on its laurels and further talks with BT Scotland to further improve links and promote the likes of flexible working in remote areas are ongoing.

Raymond O'Hare, the director of Microsoft Scotland, led the HIE team's trip to Seattle. He said: "I'm confident that Highlands and Islands, already renowned for its creativity and innovation, has sown the seeds during this visit to create further world-class examples, through time, of what it does best in diverse areas like health and education."