Technology: strengthening capabilities and seeking talent

A high state of alert over cyber threats

UK CEOs rate cyber risks as a significant business threat - second only to the availability of key skills - with 76% citing it as a concern. This is more than their global peers, with cyber threats not even making the top three business threats. In specific territories, CEOs are more worried about cyber risks, with 85% of US CEOs expressing concern, while German CEOs are less worried, at 58% – although cyber risks top the rankings in both countries as the single biggest business threat.

In line with their relatively high state of alert over cyber threats, an overwhelming 97% of CEOs in the UK say their organisation is currently addressing cyber breaches affecting business information or critical systems, well above the global figure of 90%. An international comparison shows that the proportion of CEOs in Germany currently addressing cyber breaches – at 96% – is very similar to the UK, while in the US it’s 100% and in China just 79%. Overall, the findings underline what our clients are telling us – that UK CEOs accept that investing in cyber security is something businesses simply have to do, even if it’s difficult to quantify the payback in terms of risk avoidance.

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A commitment to strengthening digital capabilities…

As well as focusing on cyber threats more than most business leaders globally, UK CEOs are also strongly committed to strengthening their digital and technology capabilities as a way to capitalise on new opportunities, with 25% in the UK saying they want to do this, against 15% globally. The UK figure is well ahead of the US (at 13%) and China (at 9%), but lags behind some European territories, such as Switzerland’s 34% and Denmark’s 28%.

UK CEOs are more likely than those elsewhere to have added digital training to their learning programmes, with 68% of UK CEOs saying they’ve taken this step. UK CEOs are also more convinced of the importance of digital skills to their organisations, with 83% of UK respondents rating these as important against 79% globally.

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That said, UK CEOs appear to be lagging behind in some emerging areas of technology – most notably in terms of investigating the potential of artificial intelligence (AI) and automation in their businesses. Only 38% of our CEO respondents in the UK say they’re currently exploring the benefits of humans and machines working together, compared with 52% globally who say the same. That puts the UK ahead of China – at 32% – but well behind the US at 47% and Japan at 62%.

When asked whether they’re considering the impact of AI on their future skills needs, only 28% of UK CEOs say they’re doing this, compared to 39% of CEOs worldwide. And 49% of UK CEOs say their organisation is currently addressing AI and automation (including blockchain), compared to 58% of all CEOs globally, and way behind the proportion of CEOs doing this in countries such as the US and Australia, both at 62%.

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…while finding digital skills harder to recruit than CEOs elsewhere

An interesting counterpoint to the high importance that UK CEOs attach to digital skills is that they say these skills are harder to get hold of than their peers in other countries. Two-thirds – 67% – of UK CEOs say recruiting people with digital skills is difficult, against only just over half – 52% – of CEOs globally, a proportion that falls to 43% in the US and just 24% in China. These findings raise the question of whether CEOs can address this apparent squeeze on digital skills in the UK, and what steps they may be taking to do so. CEOs in only two other territories worldwide find it harder to get hold of digital skills than the UK – South Africa (86%) and Switzerland (72%).

In line with these findings, our survey also suggests that STEM (science, technology, engineering and maths) skills are hard to find in the UK. Some 57% of CEOs in the UK rate STEM skills as difficult to recruit, compared to 51% globally, just 30% in Germany, and 32% in China. However, CEOs in the US find it marginally harder to recruit STEM skills than their peers in the UK, with 58% of US CEOs citing difficulty in finding them, while the figure in Japan is even higher, at 68%.


Expecting technology’s impact on industry competition to increase over time

Turning to the extent to which technology is changing the competitive environment in their own industry, UK CEOs see this impact as increasing over time – with 62% saying technology has significantly impacted or even reshaped competition over the past 20 years, 64% that it’s done so over the past five years alone, and 73% that it will do so over the coming five years. The view that the impact of technology will be greater over the next five years than over the last two decades is mirrored at a global level, and in countries including Germany and the US. Interestingly, CEOs in China take a contrary view – with 65% believing technology has reshaped competition over the past 20 years, but only 63% that it will do so over the next five.

Responding about their own personal technology capabilities, UK CEOs deliver a relatively confident assessment of their digital skills, with 62% rating these as “strong”, compared to 55% globally.

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Jon Andrews
Head of Technology and Investments
Tel: +44 (0)20 7804 9000

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