Opportunities for industry growth
With more than half of CEOs concerned that inadequate basic infrastructure could threaten growth, there is clearly a worldwide need for infrastructure development and capital projects.
Even so, the outlook in 2015 of CEOs in the capital projects and infrastructure industry (infrastructure) appears slightly less confident compared with global peers. 72% of infrastructure CEOs expressed confidence that their company revenue will grow in the next 12 months as opposed to 84% of all CEOs surveyed.
Strategic growth opportunities do exist - 53% of infrastructure CEOs believe there are more growth opportunities for their company today than there were three years ago. This optimism is supported by the fact that 79% of infrastructure CEOs expect to maintain or increase their organisations' headcount over the next 12 months - a percentage that is on a par with global peers.
Where do infrastructure CEOs expect to find growth? They rank China and the US at the top of their list of markets with strong prospects, followed by Germany.
Riding the waves of disruption
But infrastructure CEOs see more threats, too. Nearly two-thirds (64%) say there are more threats today than three years ago. Their top worries include increasing tax burdens (74%), government responses to fiscal deficits and debt (73%) and geopolitical uncertainty (71%). For nearly half (46%), access to affordable capital is a concern too.
Even more, pressing, though, is over-regulation, which more than four-fifths (83%) believe could threaten growth. And nearly as many infrastructure CEOs (79%) believe that new industry regulation will disrupt their industry over the next five years.
More capabilities; more competitive edge
To survive the disruptive trends, many organisations are rethinking and rebuilding their capabilities to compete in adjacent sectors/industries that offer profitable growth. Fifty-three percent of infrastructure CEOs believe that organisations will increasingly compete in adjacent sectors/industries in the next three years.
The strategic value of digital technology
Eighty-five percent of infrastructure CEOs say operational efficiency is one of the best returns on their digital technology investment. In our view, the key lies in using technology to align operating models with business objectives so that they can deliver value to stakeholders. Most infrastructure CEOs believe their companies are gaining value from digital technology in a variety of other areas too, with data and data analytics as well as digital trust including cyber security next on their list.
Partners who share the wealth and the risk
Business partnerships are on the rise. Fifty-four percent of infrastructure CEOs plan to enter new strategic alliances and joint ventures in the next 12 months. Many plan to collaborate with customers, suppliers, academia and even competitors. Their main priority for these partnerships is to gain access to new technology and customers as well as share risks.
Working with government
Like their peers across the sample, nearly half of CP&I CEOs believe that adequate physical infrastructure should be one of their government’s top priorities. Only around a third believe that government has been effective in achieving it to date, though. Infrastructure CEOs intend to do their part to change that situation. 40% say their organisations are focusing on collaborating with government on physical infrastructure over the next three years, more than across the sample overall (24%).