businessinfomag.uk magazine 06 ANALYSIS The proportion of CEOs who believe global economic growth will improve over the next 12 months has more than doubled year-on-year, from 18% last year to 38% in 2024, according to PwC’s 27th Annual Global CEO Survey of 4,702 CEOs in 105 countries and territories. CEO expectations of global economic decline have tumbled from last year’s record high of 73% to 45% in 2024, as global exposure to inflation and macroeconomic volatility fell by 16 percentage points (to 24%) and 7 percentage points (to 24%) respectively. CEOs in most regions of the world are also more likely to be optimistic about the outlook for their domestic economies, with the notable exception of those in North America and Western Europe. In Western Europe, 48% of CEOs expect their domestic economies to decline in 2024, compared to 32% who are expecting growth. Respective figures for North America are 52% and 31%. Businesses under threat When it comes to the viability of their own businesses, CEOs are less optimistic. While the proportion of CEOs who feel their company is highly or extremely exposed to geopolitical conflict risk has fallen 7 percentage points to 18%, the proportion concerned about their long-term business viability has risen as climate pressures and technological disruption accelerate. Almost half (45%) of CEOs don’t believe their business will be viable in a decade if it continues along its current path, up from 39% in 2023. This concern is more prevalent amongst CEOs of businesses with less than $100 million in annual revenue (56%) than amongst those in businesses that make $25 billion or more in annual revenue (27%). What CEOs think Growth prospects for 2024 In the short-term, CEO’s confidence in their own business’s prospects for revenue growth over the next 12 months has fallen from 42% in 2023 to 37% this year. Even so, CEOs in every region say they are more likely to increase than decrease their headcount in the next 12 months, with 39% planning to increase headcount by 5% or more in 2024. CEOs in the Middle East are most bullish about hiring (65%). Bob Moritz, Global Chair, PwC, said: “Despite rising optimism about the global economy, CEOs are less optimistic than last year about their own revenue prospects, and more acutely aware of the need for fundamental reinvention of their business. Whether it is accelerating the roll-out of generative AI or building their business to address the challenges and opportunities of the climate transition, this is a year of transformation.” The AI opportunity CEOs overwhelmingly see generative AI as a catalyst for reinvention that will power efficiency, innovation and transformational change. Nearly three-quarters (70%) believe it will significantly change the way their company creates, delivers and captures value in the next three years. CEOs are also optimistic about AI’s short-term impact. Over the next 12 months, 58% expect it to improve the quality of their products or services; 48% say it will enhance their ability to build trust with stakeholders; 41% expect AI to positively impact revenue; and 46% expect it to positively impact profitability. While CEOs are generally looking forward to the transformative benefits of generative AI, the great majority say it will require workforce upskilling to achieve (69%). They are also concerned about AI’s impact on cybersecurity (64%), misinformation (52%), legal liabilities and reputation risks (46%) and bias towards specific groups of customers or employees (34%). Progress on inflation and macroeconomic volatility fails to allay long-term fears of CEOs, reveals latest PwC Global CEO survey Progress on climate transition Another industry disruptor presenting opportunities in addition to risks is climate change. Nearly one third of CEOs expect climate change to alter the way they create, deliver and capture value over the next three years. In the meantime, CEOs are making progress turning commitments into action: 76% have either begun or completed steps to improve energy efficiency; 58% have done the same with regard to climate-friendly products, services or technologies. On a less positive note, only 45% of CEOs have made progress on or have already incorporated climate risk into financial planning (with 31% having no plans to do so). Action on adaptation to physical climate risks is also lagging at 47% (with 29% having no plans in this area). A change of model Almost all (97%) CEOs say they have taken steps to change how they create, deliver and capture value in the past five years. Over three-quarters (76%) have taken at least one action that has had a large or very large impact on their company’s business model. While CEOs are taking action to reinvent their business model, they face a number of challenges in doing so, including the regulatory environment (64%), competing operational concerns (55%) and a lack of skills in their workforce (52%). Moritz said: “This year’s data suggests a high degree of CEO uncertainty ahead, but CEOs are taking action. They are transforming their business models, investing in technology and their people, and managing the risks and opportunities presented by the climate transition. If businesses are to thrive over the short and long-term, build trust and deliver sustained and long-term value, they must accelerate the pace of reinvention.” Full findings can be found at pwc.com/ceosurvey. PwC’s 27th Annual Global CEO Survey Thriving in an age of continuous reinvention As existential threats converge, many companies are taking steps to reinvent themselves. Is it enough? And what will it take to succeed? www.ceosurvey.pwc
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