Key findings

Business confidence

• Fifty-seven percent are very confident about revenue growth over the next 12 months. Almost half (47%) report they are more confident today than they were a year ago.
• Eighty-six percent plan to finance growth through internally generated cash flows, and 10% through private equity.
• Thirty-three percent see existing markets and existing products as major growth opportunities. Forty-six percent want to grow by expanding into new markets, acquiring new businesses, developing new products, and innovating with technology. And 12% view access to and retention of key talent as a major opportunity to grow business.

Mergers and acquisitions

• Seventy-two percent expect to acquire all or a part of another company in the US over the next two years.
• Twenty-three percent are conducting or planning cross-border M&As. Forty-four percent of these are active in Asia.
• Among those that are engaged in cross-border deals, cultural conflicts and unexpected costs are cited as the biggest obstacles (70% and 52%, respectively).
• Assessing their cross-border M&A capabilities, 53% of respondents believe significant or a lot of improvement is needed in their organization's ability to navigate the legal and regulatory systems in the home country of the target company. Fifty-two percent believe this level of improvement is needed in assessing the risks of doing business there and in postmerger integration.

Outsourcing

• Thirty-four percent are outsourcing or offshoring business processes or functions. Forty-nine percent say it is not practical in their line of work and that there is no need to move their business processes or functions outside the US But those that outsource intend to increase the volume outsourced in the future.
• Asia is the preferred destination for 55% of those who currently outsource or are planning to outsource. Twenty-three percent are outsourcing within the US
• Fifty-eight percent of respondents cite lower costs as the most important driver of outsourcing.
• Twenty-three percent believe they are deriving competitive advantage from sourcing R&D capabilities in other countries.
• Assessing their outsourcing capabilities, 52% believe a lot or significant improvement is required in assessing how risks and interdependencies merge in outsourcing arrangements. Forty percent would like this level of improvement in their system for real-time monitoring of the various components of the supply chain and to enhance their ability to change course in order to take advantage of new opportunities in alternative outsourcing or offshoring arrangements.

Threats to business growth

• Low-cost business competition and availability of key skills are regarded as the major potential threats to business growth (66% and 64%, respectively).
• Fifty-three percent are assigning moderate to significant resources to addressing the threat of skills shortage.
• Forty-eight percent agree that active engagement in social issues will be a key success factor in employee recruitment and retention.