Global vs. Local Prosperity: Navigating a Fractured World

PwC's 21st CEO Survey: The Anxious Optimist in the Corner Office


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Global Chairman Bob Mortiz on CEOs' views on an increasingly fractured world. Duration 2:06

"CEOs tell us the world is edging away from its full-on embrace of a singular and seamless ecosystem and instead moving toward multiple fragmented ecosystems."

Bob Moritz, Global Chairman, PwC US

Echoing the theme of the World Economic Forum this year, PwC’s 21st CEO Survey speaks to how companies are navigating an increasingly fractured world. We asked CEOs to consider a number of opposing political, economic, and trade trends and pick a side in terms of which way the world was moving. The results are revealing.

Region by region, the world is edging away from its full-on embrace of a singular and seamless global marketplace, at least in the physical, geopolitical world. Cyberspace and corporate integration are the two spheres in which the world is still moving towards an overarching global model. (Already many companies, particularly in the tech sector, dwarf entire countries in terms of market capitalisation, and CEOs see that trend continuing.)

But most CEOs see the world moving in the opposite direction, towards multiple belief systems and rules of law, regional trading blocs and increased tax competition, and rising nationalism and diverse economic models. In the wake of Brexit, the Trump administration’s withdrawal from trade agreements and the Paris climate accord, and risks to the continued unity of the Gulf Cooperation Council, this data is arresting but hardly surprising.



Benefiting the many or the few?


As many politicians and policymakers in the world’s major economic powers look inward, the global innovation model long embraced by leading multinationals—one based on the free flow of information, money, and talent across borders—is at risk.  Our 2017 Global Innovation 1000 Study found that 52% of respondents believe economic nationalism will have a moderate or significant impact on their company’s R&D efforts, replacing today’s integrated and interdependent network with isolated R&D nodes.

One area in which more fragmentation is a welcome development, however, is in the way we measure prosperity around the world. CEOs across every region and country recognise that the world is moving away from ‘measuring prosperity primarily through financial measures (e.g., GDP)’ and towards ‘measuring prosperity through multifaceted metrics (e.g., including quality-of-life indices)’. This is particularly true in Latin America. North America lags the global consensus with nearly 40% of CEOs siding with traditional financial measures. Still, 57% agree that the world is moving in the direction of multifaceted metrics. Defining those metrics and capturing the data to accurately measure them will be a priority agenda item in the coming years.

On the larger issue of whether we are headed into a period of widespread growth benefiting the many or concentrated growth benefiting the few, the jury is still out. CEOs are evenly divided. Most Asia-Pacific CEOs do not see global growth becoming more concentrated and benefiting the few, whereas CEOs in the Middle East, Africa, and Central & Eastern Europe do.

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Ilona Steffen
Global Marketing & Insights Director, PwC Switzerland
Tel: +41 79 210 6692

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