kapubanner for mobile
Published: 5 month

Almost half of managers are concerned about the long-term survival of their business

The proportion of CEOs who believe global economic growth will improve in the next 12 months has more than doubled compared to last year (from 18% to 38%). At the same time, 45% of CEOs are concerned about the long-term survival of their business in the face of increasing technological and climate pressures, according to PwC's 27th Global CEO Survey.

A vezetők majdnem fele aggódik vállalkozása hosszú távú fennmaradása miatt-

CEOs' expectations of an economic downturn have fallen to 45% from a record 73% in last year's survey, while their exposure to inflation and macroeconomic volatility has also fallen to 24% (from 40% and 31% last year). Despite ongoing conflict, the proportion of CEOs who felt their company was moderately or highly exposed to geopolitical conflict risk was 7 percentage points lower (18%).



"As CEOs become less concerned about shorter time horizon (e.g.:macroeconomic) challenges, they are increasingly able to focus on disruptive and longer-term factors within their industry. Although more optimistic about the global economy, they are less sanguine about their own revenue prospects than last year and are typically aware of the need for a fundamental overhaul of their business. Whether it's accelerating the adoption of generative AI or addressing the business challenges and opportunities associated with climate change, this year the transformation will accelerate," summarises the key findings of the global survey, Szabolcs Mezei, Partner at PwC Hungary.



Western Europe and North America are more pessimistic, but job growth is expected in all regions



In most parts of the world, CEOs are more optimistic than pessimistic about the domestic economic outlook. But in North America and Western Europe, CEOs are not following this trend: In Western Europe, 32% expect the domestic economy to grow, while 48% expect it to contract; in North America, the two percentages are 31% and 52% respectively.



CEOs typically plan to increase rather than decrease staff numbers over the next 12 months, with 39% reporting plans to increase staff by at least 5%. Employers in all regions are more likely to expect to increase headcount, with the Middle East region having the most ambitious hiring expectations (65%).



Market trends dampen optimism



CEOs are increasingly aware of global megatrends and their impact on businesses. Although the trajectory is positive, optimism is cautious, primarily due to megatrends - including technological changes, typically generative artificial intelligence, and climate change. Nearly half (45%) of CEOs believe that their company will not be viable in a decade if it continues on its current path (up from 39% in 2023). Also reflecting the uncertainty about how to deal with megatrends, CEOs are less confident about their own company's revenue growth prospects over the next 12 months (down from 42% to 37%).



Artificial intelligence is a catalyst for innovation



CEOs clearly see the potential in generative AI, with nearly three quarters (70%) of those surveyed believing it will significantly change the way value is created over the next three years. They are also optimistic about the short-term impact of AI, with 58% expecting it to improve the quality of their products or services, and almost half (48%) say it will increase their ability to build trust with stakeholders over the next 12 months. They also expect AI to support the bottom line of their business, with 41% predicting an increase in revenue and 46% improving profitability. The technology, media and telecoms sector is the most confident about the impact on profits (54%), while executives in the energy and utilities sectors are the least optimistic (36%) about AI.



Company leaders are increasingly looking for the transformative benefits of generative AI, and 69% see this as requiring upskilling of the workforce. Concerns about AI include cybersecurity risks (64%), misinformation (52%), legal liabilities and reputational risks (46%), and an increase in bias against certain groups of customers or employees (34%).



Integrating decarbonisation into financial planning is still a long way off



CEOs are making good progress in meeting their climate commitments, with 76% having already taken steps to improve energy efficiency and 58% making similar progress in innovating new climate-friendly products, services or technologies. However, only 45% reported that they have incorporated climate risks into their financial planning (31% have no plans to do so). CEOs were also mixed on measures to adapt to physical climate risks, with 47% having taken action and 29% having no plans to do so.



The survey shows strong support for decarbonisation, with only 26% of respondents saying that board or management resistance is a moderate or significant barrier to decarbonisation. CEOs cite regulatory complexity (54%) and lower returns on climate-friendly investments (51%) as the biggest barriers to overcome.



Redesign and efficiency improvements needed



The survey shows that smaller companies are at greater risk, with 56% of executives at firms generating less than $100 million in annual revenues believing that their business will be viable for up to ten years if it continues on its current trajectory.

Nearly all CEOs (97%) noted that they have taken steps to change the way they create and deliver value in the past five years, and more than three-quarters (76%) have implemented at least one action that has had a significant impact on their company's business model. However, change is generating a number of challenges for business leaders, with two-thirds (64%) citing the impact of the regulatory environment as a barrier to rethinking the business model, 55% citing conflicting operational considerations and 52% highlighting a shortage of skilled staff.



Another barrier is inefficiency. CEOs perceive significant inefficiencies in their company's routine activities, from decision-making meetings to emails - around 40% of the time spent on these tasks is judged to be inefficient. PwC's conservative estimate is that this inefficiency can result in productivity losses of up to $10,000 billion.



"This year's data suggests a high level of uncertainty among CEOs, who are nonetheless determined to make a difference. They are reshaping their business models, investing in technology and their workforce, and addressing the risks and opportunities of climate change. If businesses want to succeed in the short and long term, build trust and create sustainable long-term value, they need to accelerate the pace of renewal." - concluded Bob Moritz, Global Head of PwC, at a press conference at the World Economic Forum in Davos.





photo: unsplash


© Copyright HRKnowledgehub.com - 2024