1998
Let the good times roll
The 1998 survey brims with boundless optimism. CEOs were not yet fully aware of the potential of the Internet. The strength of the ’90s economy showed no signs of abating. The profound impact of globalisation appears not to have dawned
on CEOs. China enjoyed a near-monopoly of attention in the emerging markets.
- Less than a third of CEOs had ‘logged on’to the Internet for 10 days or more in the previous month.
- A third of CEOs declared they were extremely optimistic about growth prospects.
- China was seen as hot, India was not, and ‘CEOs are 5 times more likely to select China over neighbouring India as the place for expansion.
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1999
E-business takes the world by storm
By 1999 CEOs had awoken dramatically to the power and potential of e-business. Yet at the same time, they seemed relatively backward in their personal use of the Internet. Optimism was still sky high and rising – disruption of the Asian markets through defaults and turbulence in commodity prices had hardly tempered it.CEOs were confident of their preparation to face the risks of Y2K before the widely predicted technological meltdown failed to materialise.
- One-fifth of CEOs expected their firm’s e-business revenues to increase 20% or more in the next five years.
- Thirty percent of CEOs had not signed onto the Internet at all in the previous month.
- A Mexican CEO summed up the competitive threat from e-business: ‘In tomorrow’s world the growth of electronic business means we will need to watch for competitors who come out of nowhere and offer the same or better services than ours.’
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2000
Optimism peaks before the plunge
The first months of 2000 were the last of the glory days before the global economy came crashing down. CEOs entered the new millennium on the wave of a revolution in e-business. Continued optimism was the keynote of the findings, and the North Americans were by far the most bullish.With the dotcom bubble in its final and most expansive days, growth expectations in the communications and technology sectors stormed ahead of other sectors. PwC’s own CEO was very optimistic, saying in his introduction, ‘Every wise step we take is a step toward a more integrated, more robust,and I would say safer world and economy.’ Shortly afterwards, the robustness of the economy and safety of the world were to be put to the test.
- No fewer than 91% of our large survey population were optimistic about growth prospects in the next three years.
- 40% of respondents in the communications and technology sectors and 42% of American CEOs were extremely optimistic about growth.
- 68% of North American and Asian CEOs foresaw a major or at least significant Internet-empowered competitor.
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2001
Clouds on the horizon
CEOs were still bullish about capital markets (interviews were conducted during the summer and autumn of 2000, before the plunge of the US stock markets). They were optimistic about their company’s growth prospects over the next three years, but on the Internet front, the beginnings of the dotcom crash had taken its toll: CEOs were much more subdued. They began to express concern that the digital divide between developed and third-world countries would increase as a result of electronic business.
- Only one CEO in four indicated that the impact of electronic business on theirindustry had been very significant.
- Most executives (86%) expressed a beliefthat capital markets would prosper – an overwhelming majority compared to those who predicted a decline (5%).
- More than half the CEOs interviewed expressed concern that the Internet would exacerbate the divide between first – and third-world economies.
- When asked which of four factors would be most likely to keep them awake at night, one in three CEOs pointed to the instability of the global economy.
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2002
Geopolitics and scandal: an era of uncertainty
The 2002 survey was conducted as the world reeled from the cataclysm of 9/11. But CEOs worldwide responded to 9/11 and the onset of political and economic instability that followed, with action. They revised their financial forecasts downward. They considered workforce reductions and the outsourcing of non-core business functions. In the long-term they predicted that a stronger anti-globalisation movement would result from the terrorist attacks. Meanwhile,
corporate social responsibility rose to the top of CEOs’ agendas for the first time in the history of the PwC survey.
- ‘We need to face the speed of big changes, be more quick in decisionmaking, develop appropriate strategies, and assume risks.’ – Mexico CEO.
- 'We have to encourage people to look beyond the short term and to strive to build an organisation which will grow and prosper for the benefit of all of the relevant stakeholders over the longer term.’ – Australia CEO.
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2003
The fragile recovery
First 9/11, then Enron rocked a world trying to readjust from the shock. Building trust that has been damaged was a key priority and concern about overregulation became as great as global terrorism. Yet, CEOs gained fragile confidence in their own growth prospects, if not in the economy as a whole. The focus changed to the humane side of business – CEOs displayed a serious commitment to corporate and social responsibility.
- 'We have two goals: to restore confidence and return to reasonable profitability.' – US CEO.
- Just over half of CEOs said that corporations in their country had suffered a loss of trust in the public's eye.
- 72% of CEOs were at least somewhat confident about prospects for revenue growth in the next 12 months.
- 71% said that they would sacrifice short-term profitability in exchange for long-term shareholder value when implementing a sustainability program.
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2004
Optimism returns
By 2004, optimism was beginning to return.CEOs were prepared to take risks to move their companies forward. They were confident that their company would do well. Structure and operations were being questioned and,when necessary, altered. The result was a robust sense of enterprise. The small cadre of CEOs who had embraced enterprise risk management were enjoying the value it had created. CEOs had, by and large, factored in the impact of global terror and additional overnance regulations and started to reshape their organisations to meet the demands and opportunities of the future.
- More than 80% of CEOs were confident about revenue growth for the next three years.
- Nearly half of all CEOs said that they are more aggressive in their attitude to taking risks than they had been a year earlier.
- Nearly 40% of CEOs reported that they already have effective and efficient ERM in place.
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2005
Battling with compliance
Uncertainties still abounded, with trade imbalances, currency fluctuations,skyrocketing energy costs and increasing regulation. By 2005, achieving good governance, risk management and compliance was a battle. CEOs were optimistic about their prospects for growth – but it was an optimism grounded in reality and tempered by caution.
- 'Whether we like it or not, all corporations have to re-establish their credibility with investors, other stakeholders, and the broader public.' – Leif Johansson, CEO Volvo group.
- 'Risk management is a very high-level job … All my top managers know that their job is not just to make money. It's also to manage risk.' – CEO COSCO Group.
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2006
Going global
By 2006, markets were more open than ever before and the focus shifted to going global. Support for globalisation was strong and getting stronger. Motivation for globalisation had changed: no longer about cost-cutting only, CEOs said that they were moving into BRIC countries to find new customers and service existing ones. India was catching up with Russia and China as hot destinations, while Brazil fell behind. Overregulation continued to be the number one barrier and complexity within organisations was on the rise.
- Over the next year, 58% of CEOs said that globalisation would have a somewhat or very positive impact on their organisations.
- 78% of CEOs in developed economies said that their companies are going global to find new customers, compared with 48% who are looking to reduce costs.
- 64% of global CEOs saw overregulation as their chief impediment to globalisation.
- 54% of CEOs said that they were planning to open offices in China, followed by Russia (48%), India (44%) and Brazil (35%).
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