WEBVTT 0:00:02.880 --> 0:00:07.760 If you're a CEO, what's on your mind? At PwC, 0:00:07.760 --> 0:00:17.680 we asked and more than 4,000 global business leaders told us. 0:00:17.680 --> 0:00:21.520 Leaders are less confident about revenue growth than they were last year. 0:00:22.320 --> 0:00:25.680 They see rising threats from macroeconomic volatility, 0:00:25.680 --> 0:00:37.520 cyber risk, technology disruption, and geopolitical conflict. 0:00:37.520 --> 0:00:43.440 AI is at the top of the agenda, and 12% of CEOs say their company has seen both cost 0:00:43.440 --> 0:00:50.080 and revenue benefits from AI, but more than half haven't yet seen any of those gains. 0:00:56.880 --> 0:01:02.640 But there is plenty of positive news. The CEOs who continue to invest boldly are pulling 0:01:02.640 --> 0:01:07.440 ahead. More than 40% say their organizations have entered new sectors 0:01:07.440 --> 0:01:16.080 over the past five years. On average, these moves account for around 20% of their revenue. 0:01:18.880 --> 0:01:24.000 Half of CEOs say innovation is central to their strategy. Those using 0:01:24.000 --> 0:01:29.680 proven innovation practices such as supporting higher risk initiatives and creating innovation 0:01:29.680 --> 0:01:38.400 hubs are more profitable and growing faster. Finally, growth is built on trust. Our survey 0:01:38.400 --> 0:01:43.680 shows that in the past year, two-thirds of CEOs faced stakeholder concerns around issues like 0:01:43.680 --> 0:01:49.200 data privacy and responsible AI. Companies facing the fewest trust 0:01:49.200 --> 0:01:55.280 concerns delivered higher returns. Trust, innovation, and reinvention are the 0:01:55.280 --> 0:02:02.960 foundations of growth in the age of AI. So our final question to CEOs is this. 0:02:02.960 --> 0:02:17.040 As you lead through change and disruption, how will you shape what comes next? 0:02:17.040 --> 0:02:22.640 Good evening and welcome to you all. Thank you for joining us here in Davos. If you're joining us on 0:02:22.640 --> 0:02:30.640 the live stream, thank you to you, too. We're here to launch PwC's 29th global CEO survey 0:02:30.640 --> 0:02:38.160 and it's taken in responses from almost four and a half thousand CEOs from 95 countries. So that's a 0:02:38.160 --> 0:02:44.320 huge survey. Really good data there. I'm Nisha Ple and it's my great pleasure to be your moderator 0:02:44.320 --> 0:02:49.200 today. So what are we going to do? We're going to take a look at the headline findings and then 0:02:49.200 --> 0:02:54.880 we're going to try and unpack them to see what they might mean for decision makers at 0:02:54.880 --> 0:03:02.080 a time like this with such rapid technological change and so much uncertainty. So I'm pleased 0:03:02.080 --> 0:03:08.800 to say that we're joined now by Muhammad Kande, PwC's global chairman. Muhammad, please come onto 0:03:08.800 --> 0:03:18.240 the stage. Thank you. Make yourself comfortable. I will. So, let's start 0:03:18.240 --> 0:03:24.400 with what the CEOs themselves are saying. Here's a flavor. Our transformation is underway, 0:03:24.400 --> 0:03:30.320 but it's not going fast enough. Interesting. There's a lot of excitement around AI shared 0:03:30.320 --> 0:03:37.280 by all of us in the room, but the payoff isn't here yet. How about this? Long-term survival isn't 0:03:37.280 --> 0:03:44.960 guaranteed if we continue on our current path or growth opportunities aren't where they used to be, 0:03:44.960 --> 0:03:53.760 so we're having to branch out. And finally, doing nothing feels like the bigger risk right now. And 0:03:53.760 --> 0:04:01.680 here's some of the data behind those sentiments. Also pretty striking. Only 30% of CEOs are feeling 0:04:01.680 --> 0:04:10.160 confident about revenue growth this year. Only 30%. 56%—over half—say they have not seen cost or 0:04:10.160 --> 0:04:21.440 revenue benefits from AI and 66% of CEOs—two-thirds—say they've experienced stakeholder trust issues 0:04:21.440 --> 0:04:27.920 in the past year. So Muhammad, when you look at what the CEOs are saying and when you look at what 0:04:27.920 --> 0:04:33.760 the data is saying and put it all together what's the real story here? You know Nisha the real story 0:04:33.760 --> 0:04:40.640 is that CEOs today are feeling the pressure—the pressure of understanding the current environment 0:04:40.640 --> 0:04:46.560 the opportunities but also the sense of urgency that we now have because the more you are in 0:04:46.560 --> 0:04:51.440 a very uncertain environment the more there's a sense of urgency to understand okay what should 0:04:51.440 --> 0:04:57.520 come next and Today, unfortunately for many CEOs, it is very difficult to predict what the 0:04:57.520 --> 0:05:02.000 future is going to be. And so, they're feeling the pressure. And how do we deal with that pressure 0:05:02.000 --> 0:05:07.760 today of all the uncertainty, the technology disruption that you just mentioned, but also to 0:05:07.760 --> 0:05:12.720 think about how do they reshape the business for the long term, reshape it, reshape it because they 0:05:12.720 --> 0:05:17.120 know that they will have to do things differently. So, the question that the CEOs are asking 0:05:17.120 --> 0:05:23.840 themselves, which is showing up in the results, is am I moving fast enough? Am I being bold 0:05:23.840 --> 0:05:31.600 enough and am I building my business today to be viable for the future for the next five years all 0:05:31.600 --> 0:05:37.600 in the midst of maximum uncertainty it is a very interesting time today but the questions are real 0:05:37.600 --> 0:05:42.800 and the answers are difficult indeed and CEOs are under so much pressure caught up in the moment 0:05:42.800 --> 0:05:48.480 and decisions perhaps they're missing the big picture so you've identified these deep shifts 0:05:48.480 --> 0:05:53.520 that you think that leaders should be across and understand the survey is also providing strong 0:05:53.520 --> 0:06:00.320 support for that. The first shift is what you call the reconfiguration of global economic power with 0:06:00.320 --> 0:06:06.800 supply chains shifting, new investment corridors emerging and interestingly CEOs are signaling 0:06:06.800 --> 0:06:12.320 growing interest in India and in the Middle East. How do you see this playing out? Well, 0:06:12.320 --> 0:06:18.480 you know this reconfiguration is playing real time. You mentioned supply chains, reconfiguration 0:06:18.480 --> 0:06:25.440 of economic power, reconfiguration of partnership that CEOs actually have to embrace 0:06:25.440 --> 0:06:31.760 and the shift happening not only real time but with the level of intensity but also playing it 0:06:31.760 --> 0:06:36.480 differently depending on where whether you find yourself in India, in Asia or in in Europe or in 0:06:36.480 --> 0:06:42.720 in the US. What we are seeing that the response is first what are the operating models of the future 0:06:42.720 --> 0:06:48.240 for CEOs because the reconfiguration will happen is to understand which operating models would be 0:06:48.240 --> 0:06:54.720 the right for the future. The second one is to rethink where do we build our products? How do 0:06:54.720 --> 0:06:59.200 we configure our supply chains? Who should we partner with and also what technology 0:06:59.200 --> 0:07:04.400 to choose depending on where they find themselves in the world. So this reconfiguration is real and 0:07:04.400 --> 0:07:09.840 again we are doing all this in a time of maximum uncertainty about what comes next. So there are 0:07:09.840 --> 0:07:16.000 big decisions on the horizon and when you look at where CEOs are placing their bets globally 0:07:16.000 --> 0:07:22.880 what's changed recently are leaders thinking differently maybe about about risk and return 0:07:22.880 --> 0:07:29.200 you know I like my my colleague Marco Amitrano who is a UK and Middle East senior partner to answer 0:07:29.200 --> 0:07:34.000 that question. Marco what do you think about this one? So look, I think it's fair to say, Muhammad, 0:07:34.000 --> 0:07:40.640 the competition for investment capital is a global one. It always has been. And look, the 0:07:40.640 --> 0:07:45.920 landscape has changed. You know, as you've already articulated, emerging economies are no longer 0:07:45.920 --> 0:07:51.920 emerging. Actually, that landscape has changed as a result of the mega trends we've been talking 0:07:51.920 --> 0:07:57.440 about, reading about for decades now. You know, geopolitical fracturing, very real, very 0:07:57.440 --> 0:08:03.680 current as we come into this week. Technological advancement getting more rapid—we think AI is 0:08:03.680 --> 0:08:08.880 huge; we'll hear more about that. Quantum, when it comes, is arguably an even bigger shift. And then we 0:08:08.880 --> 0:08:15.200 have social instability, demographic shifts—some of the western economies have felt the pinch more— 0:08:15.200 --> 0:08:19.280 and climate change which, you know, some people think has gone away, but it hasn't. It's now 0:08:19.280 --> 0:08:26.000 underpinning an energy transition conversation. So you know the landscape for returns has shifted and 0:08:26.000 --> 0:08:32.640 therefore the competition has intensified differently in different places. How do you 0:08:32.640 --> 0:08:38.000 think leaders are thinking differently about risk and return today then? Yeah, look, I mean, when 0:08:38.000 --> 0:08:43.280 this environment we we're in, there's no doubt that chief execs I talked to, we talked to, many 0:08:43.280 --> 0:08:50.240 of which have underpinned their survey, are looking for that kind of balance between fewer 0:08:50.240 --> 0:08:57.200 bigger bets, meaningful bets, and therefore bigger but fewer in number, but balancing that 0:08:57.200 --> 0:09:03.520 with not betting the house, being able to manage that risk profile. And look, I mean that's where 0:09:03.520 --> 0:09:09.760 you do look at the geopolitical landscape. You do look at the interconnectivity of the world. 0:09:09.760 --> 0:09:15.200 Interestingly, what we see in this survey is the US still the number one destination. 0:09:15.200 --> 0:09:21.680 So when we ask our CEOs in this survey which are your top three, the US still 0:09:21.680 --> 0:09:28.400 predominantly the first choice with an even bigger lead from 30 to 35%. The UK still holding second 0:09:28.400 --> 0:09:34.240 place although that's now shared with Germany and shared with India that's doubled in its popularity 0:09:34.240 --> 0:09:40.160 you know relatively we've also seen the Middle Eastern countries even China market themselves 0:09:40.160 --> 0:09:45.280 better in that global competition on that global landscape so again illustrating the first comment 0:09:45.280 --> 0:09:51.520 I made that the attraction of global capital is a global competition that needs 0:09:51.520 --> 0:09:56.800 marketing and stepping up nation by nation. Yeah. Excellent. Great, thanks so much Marco. Actually, 0:09:56.800 --> 0:10:04.880 the CEO survey results are also backing up what Marco just said. 42% of CEOs say that they've 0:10:04.880 --> 0:10:10.480 been entering new sectors recently. If you look at say the last four or five years and those who 0:10:10.480 --> 0:10:15.440 have are seeing higher margins, they are also more confident about growth. So what do you 0:10:15.440 --> 0:10:20.240 think is driving that trend? Muhammad actually three things are driving that trend. The first 0:10:20.240 --> 0:10:26.000 one is growth because most of the CEOs know that when they run the companies they have to look 0:10:26.000 --> 0:10:30.400 for growth. That's how they unlock additional investment capital and you name it. Right? That's 0:10:30.400 --> 0:10:36.800 the first point. The second one is technology. Technology has decreased the barriers to entry 0:10:36.800 --> 0:10:43.760 into many other industries. So now that you have a lot of companies have access to that technology, 0:10:43.760 --> 0:10:49.280 technology is a lever that they use to expand into other industries. And the third thing is 0:10:49.280 --> 0:10:53.840 a convergence of industry. You have a lot of industries today that are converging. What 0:10:53.840 --> 0:11:00.320 is a healthcare industry? It's a combination of hospital services, medicine, but also technology. 0:11:00.320 --> 0:11:06.080 So industries are being redefined. So that is why today many of the CEOs that are looking for growth 0:11:06.080 --> 0:11:10.720 know that for them to continue to grow, they have to expand into other industries. That's 0:11:10.720 --> 0:11:15.440 and technology is a lever that they use for that. Indeed. There's a lot of discussion 0:11:15.440 --> 0:11:20.720 at the moment about Europe—of course Europe's place in the world and challenges ahead. But what 0:11:20.720 --> 0:11:25.760 does the survey say about how CEOs view Europe as a business destination? You know the best 0:11:25.760 --> 0:11:35.280 person to answer this question is actually our PwC Europe senior partner Petra. Please. Hey Nisha, 0:11:35.280 --> 0:11:41.120 thanks for the question and to give some insights. What we see is that Europe is still 0:11:41.120 --> 0:11:49.520 struggling to adapt to that new geopolitical situation, to the new power competition I 0:11:49.520 --> 0:11:56.640 would say we see in the world. At the same time there is an overcapacity coming from China 0:11:56.640 --> 0:12:03.200 and this is threatening European companies' market share globally and domestically. And 0:12:03.200 --> 0:12:10.480 we are obviously in a new discussion of US tariffs. But I wouldn't write off Europe 0:12:10.480 --> 0:12:16.480 yet. There is a lot of positives. So the first thing is, and Marco just said it, 0:12:16.480 --> 0:12:24.720 seven out of the global top destinations for investments are in Europe. Second, all the 0:12:24.720 --> 0:12:31.920 international companies want to serve the more than 450 million customers in Europe. 0:12:31.920 --> 0:12:39.280 And taking that one step further, we see—and this is coming from our survey—we see a 0:12:39.280 --> 0:12:47.520 sign of a new innovation wave building up. What do I mean? Close to half of the European 0:12:47.520 --> 0:12:56.320 CEOs we have surveyed shared that they started venturing into new sectors, in 0:12:56.320 --> 0:13:01.760 new industries, and in new business models. So they want to grab the opportunities we see in 0:13:01.760 --> 0:13:08.480 the vast investments of AI, of defense, of infrastructure. So this is the destination 0:13:08.480 --> 0:13:15.760 they're going towards and maybe if you then look at European companies, they might not 0:13:15.760 --> 0:13:21.520 always be the first going for new trends, but once they tackle the opportunity, they do 0:13:21.520 --> 0:13:27.360 it consistently and with high quality. So this is what we're seeing and this is why I'm optimistic. 0:13:27.360 --> 0:13:32.080 It might take a little bit of time, but the train is out of the station. Okay, Petra, thanks 0:13:32.080 --> 0:13:37.040 very much. So, we are not writing off Europe at all. Okay, it sounds like that. Sounds 0:13:37.040 --> 0:13:41.200 like that. And moving into new sectors just like other businesses around the world. So, 0:13:41.200 --> 0:13:46.400 let's step back now and look at the second big shift that you've identified: an increasing 0:13:46.400 --> 0:13:52.560 overlap—or what you call a tightening link—between technology on the one hand and geopolitics. We're 0:13:52.560 --> 0:13:59.440 seeing fragmented digital ecosystems. CEOs are now ranking cyber risk as a top threat. What 0:13:59.440 --> 0:14:05.840 are the implications for business? You know, the reality is nowadays in this current environment, 0:14:05.840 --> 0:14:12.720 a technology choice is also a geopolitical choice because of the availability of technology in 0:14:12.720 --> 0:14:18.480 different parts of the world and cyber risk is a function of the macro volatility that we're 0:14:18.480 --> 0:14:22.880 currently experiencing around. So CEOs are now finding out that depending on where they 0:14:22.880 --> 0:14:28.000 operate in the world, who they work with and what they sell, they have to make 0:14:28.000 --> 0:14:33.360 very different technology choices. So what we are inviting them to do is to understand what's available to 0:14:33.360 --> 0:14:38.880 them, to understand the implication of the choices that they have to take—especially the geopolitical 0:14:38.880 --> 0:14:45.280 choices—but most importantly for business is to build the resilience that they need to continue to 0:14:45.280 --> 0:14:50.960 run the businesses today but also in the future. But now unfortunately with the geopolitical 0:14:50.960 --> 0:14:57.520 landscape that we are living with, a technology choice depending on who they work with is also a 0:14:57.520 --> 0:15:02.800 geopolitical choice. Yeah. And that has its own resilience and risk issues in it. Absolutely. So 0:15:02.800 --> 0:15:08.480 we haven't yet mentioned AI—of course it's one of the huge shifts which we're all aware of. It's 0:15:08.480 --> 0:15:13.440 impossible to go anywhere without AI popping into the conversation let alone here in Davos. 0:15:13.440 --> 0:15:18.240 So the CEO survey is actually giving us a bit of a mixed picture of what's happening within 0:15:18.240 --> 0:15:26.400 businesses. Only 12% of CEOs say that they've seen both cost reductions and revenue benefits as a 0:15:26.400 --> 0:15:34.560 result of AI implementation. So very few. Over half—50%—haven't seen either yet which suggests that 0:15:34.560 --> 0:15:40.560 most companies are still pretty early in their AI journey, right Muhammad. So what separates the 0:15:40.560 --> 0:15:46.960 early movers from everyone else? You know this one when you think about AI we are 0:15:46.960 --> 0:15:53.120 in an inflection point. So first of all the technology is working. There's no doubt about it 0:15:53.120 --> 0:15:58.800 and it is here to stay. There's no such thing as turning back from artificial intelligence. It's 0:15:58.800 --> 0:16:03.360 like saying that you turn back from the internet. Nobody can do that today. So we know that it is 0:16:03.360 --> 0:16:11.360 at an inflection point when it comes to adoption and the understanding that AI is now a must for 0:16:11.360 --> 0:16:18.080 organizations or for companies around the world to adopt. The question is how we have to move 0:16:18.080 --> 0:16:23.600 and we have seen that the companies that have not adopted AI at scale that are still experimenting 0:16:23.600 --> 0:16:28.880 are showing different results from the companies that are using AI to transform their businesses. 0:16:28.880 --> 0:16:34.800 So it's not enough to tinker. Yeah. No more. Okay. So let's explore that a bit further then. 0:16:34.800 --> 0:16:40.640 What's holding companies back then from, you know, a full immersion? Uh and what are those leaders who 0:16:40.640 --> 0:16:45.440 are seeing value doing differently? How is their thought process different? That is a 0:16:45.440 --> 0:16:50.880 great question. Paul, you want to take it? This is Paul Riggs, senior partner for PwC in the US. 0:16:50.880 --> 0:16:58.320 Happy to and it'll expand upon something, Muhammad, that you just said. If I step back and say 0:16:58.320 --> 0:17:05.120 what's keeping companies grounded with AI at the moment, it is being stuck in experimentation mode. 0:17:05.120 --> 0:17:12.000 And I'd argue that you have to layer on with weak AI foundations. You know, the 0:17:12.000 --> 0:17:20.240 process of continuing to run the litany of use cases distracts focus. It distracts capital 0:17:20.240 --> 0:17:27.520 investment and you need scale plays—top down directed inside businesses—embedded in workflows, 0:17:27.520 --> 0:17:35.120 not layered on top. And so what I would surmise from the data is that those that do not recognize 0:17:35.120 --> 0:17:39.600 either cost synergies and opportunities in the current environment or the revenue opportunity 0:17:39.600 --> 0:17:45.520 that exists and that shows itself in many cases are those that are still experimenting. In terms 0:17:45.520 --> 0:17:50.720 of AI foundations, what we certainly encourage clients to build are: one, ensure that you have 0:17:50.720 --> 0:17:56.000 the technical foundation and layer to enable your business to maximize its potential with AI. 0:17:56.000 --> 0:18:03.360 Two, put tools and assets and accelerators in the hands of your people and expect your people 0:18:03.360 --> 0:18:10.880 to experience, to understand, to upskill their own potential. But then three, you have to embed AI, 0:18:10.880 --> 0:18:19.120 that AI-first ethos into your workflows. Layering things on top after you've run legacy process, 0:18:19.120 --> 0:18:24.160 well, that just keeps you in legacy process. It's incrementally additive rather than transformative. 0:18:24.160 --> 0:18:28.720 So, I'd say that in the first instance, you also talked about what are we seeing companies 0:18:28.720 --> 0:18:35.280 do who are in fact driving real value. And those companies are doing what I've just described. One, 0:18:35.280 --> 0:18:40.720 they've got strong AI foundations, which not only means the technologies enhanced their people, not 0:18:40.720 --> 0:18:46.480 only means they've upskilled their people, but it means they've developed responsive risk programs, 0:18:46.480 --> 0:18:54.160 appropriate controls that govern, monitor, secure, enable trust in AI. And then they are embedding AI 0:18:54.160 --> 0:19:01.600 in end-to-end workflows. Yes, transforming what they do today as they build tomorrow. Which 0:19:01.600 --> 0:19:08.720 also means that they are committing real resource capacity dedicated to past capacity to transform 0:19:08.720 --> 0:19:14.800 underlying businesses and to transform what it is that they do for their clients with measurable 0:19:14.800 --> 0:19:20.000 key performance indicators and accountability through the organization. So this isn't rocket 0:19:20.000 --> 0:19:27.440 science but it is focus yields results. Focus alongside investment alongside resource capacity 0:19:27.440 --> 0:19:32.400 which remains human delivers results with AI and it is meaningful. What we didn't talk about 0:19:32.400 --> 0:19:37.840 are the 30 plus percent of companies who do see meaningful results on the revenue side or on the 0:19:37.840 --> 0:19:44.320 cost side. Thank you Paul and Nisha one thing that I will add: this need for business transformation 0:19:44.320 --> 0:19:51.360 when using AI, it is the same thing that happened when we moved into digital transformation—when 0:19:51.360 --> 0:19:57.520 you use technology to move on the internet, with the mobile internet, with enterprise resource 0:19:57.520 --> 0:20:03.840 planning systems, CRM systems. The technology was not used by itself; we needed to drive 0:20:03.840 --> 0:20:08.000 the business transformation that went along with the technology around people and processes. So 0:20:08.000 --> 0:20:12.720 yeah that movie had played out before. Yeah. So you have to run your whole business differently. That's 0:20:12.720 --> 0:20:18.880 exactly what it is. So that begs the question: how are you using AI within PwC? You know, what have 0:20:18.880 --> 0:20:24.000 you learned internally about what works and what doesn't work? You know everything that we just said 0:20:24.000 --> 0:20:29.280 about what we've had our clients, we actually did it to ourselves first—using artificial 0:20:29.280 --> 0:20:35.760 intelligence and embedding artificial intelligence in all of our services to become AI-first, training 0:20:35.760 --> 0:20:41.040 our people. The first thing we did by the way was to give access to—when ChatGPT came out— 0:20:41.040 --> 0:20:47.280 we gave—we have more than 300,000 people today using ChatGPT or access to Microsoft Copilot, 0:20:47.280 --> 0:20:53.840 for example. Why? Because what we needed to do is to make sure that our people did not fear the 0:20:53.840 --> 0:20:59.600 technology and you know people fear what they don't understand. So we had first to make sure 0:20:59.600 --> 0:21:04.880 that the tools were available to our people. Yeah. So you have to create AI-native—you have 0:21:04.880 --> 0:21:09.920 to create—if you want AI-native services you have to create AI-native people, but you have to give 0:21:09.920 --> 0:21:14.720 them access to the technology. That's the first thing that we had to do. The second thing: how 0:21:14.720 --> 0:21:19.520 do we use AI to run our own businesses? You know, with the people that we have around the world, 0:21:19.520 --> 0:21:27.680 we happen to be 364,000 people in 139 countries. We have to run our business differently and we 0:21:27.680 --> 0:21:32.000 are using AI as a lever for us to be able to do that. And the third thing that I will mention 0:21:32.000 --> 0:21:38.160 is that we are constantly learning—learning from the technology companies that are always coming 0:21:38.160 --> 0:21:44.480 up with innovation on the AI front, so that we are a very early adopter of some of the new 0:21:44.480 --> 0:21:50.080 agentic AI services or technologies that are coming out because we want to be leading from 0:21:50.080 --> 0:21:54.000 the front on this one. Okay. Well, I'm going to leave it there on AI because I'm sure you'll 0:21:54.000 --> 0:22:00.640 get more questions later and let's move on now to what you believe that CEOs should be doing. Now, 0:22:00.640 --> 0:22:06.880 the survey is showing both caution and ambition. Confidence is down, yes, but CEOs are still 0:22:06.880 --> 0:22:14.160 investing in innovation, AI, new sectors as we've heard. So, what guidance are you giving to 0:22:14.160 --> 0:22:20.160 business leaders about how to navigate through these very difficult turbulent times? So, when 0:22:20.160 --> 0:22:29.120 you let me start with artificial intelligence, then CEOs have to move beyond experimentation. 0:22:29.120 --> 0:22:34.960 We mentioned it. Yeah, we hear you. Yeah, that is—it's good to have use cases but that 0:22:34.960 --> 0:22:39.440 was the last two years. We now have to move to the point that we're saying okay how do 0:22:39.440 --> 0:22:44.560 we run businesses differently and even if they don't have the answer they have to keep moving— 0:22:44.560 --> 0:22:50.080 that is the first thing. The second thing: we really advise CEOs to now look at—now that you have that 0:22:50.080 --> 0:22:55.360 technology available to them—use the technology to start thinking about expanding your 0:22:55.360 --> 0:23:02.560 business to grow beyond your sector. AI creates a number of opportunities not only internally to be 0:23:02.560 --> 0:23:07.840 efficient but externally to be able to grow the businesses. That's the second advice. And the third 0:23:07.840 --> 0:23:15.680 one: we are basically telling CEOs that you have to make innovation a core capability because 0:23:15.680 --> 0:23:21.600 you have to create the new but most importantly you need to have trust in how you deliver— 0:23:21.600 --> 0:23:26.320 how you run your businesses differently—and trust is a matter of discipline and that is 0:23:26.320 --> 0:23:31.280 what we are telling CEOs today. Trust is a matter of discipline. Yeah, trust is a matter of 0:23:31.280 --> 0:23:36.160 discipline—it's not a one-off; you have to do it all the time. Innovation is a matter of structure. 0:23:36.800 --> 0:23:42.000 Trust is a matter of discipline and we're asking CEOs to do both and the ones that are able to do 0:23:42.000 --> 0:23:47.280 that are the ones that we see successful. Fascinating. I'd never thought of it that way. Um 0:23:47.280 --> 0:23:54.960 now a very unexpected insight at least to me is how CEOs are allocating their time. Nearly half is 0:23:54.960 --> 0:24:00.880 being spent on short-term issues with a horizon of less than a year. That's pretty surprising, 0:24:00.880 --> 0:24:06.480 isn't it? What does that tell you about leadership at the moment? This is a reflection on 0:24:06.480 --> 0:24:12.160 how fast things are changing. A lot of the CEOs are spending a lot of time in the day-to-day or 0:24:12.160 --> 0:24:17.280 within the one-year time frame because there's no such thing even as a one-year time frame. Things 0:24:17.280 --> 0:24:23.120 are changing more frequently. Therefore, they have to—this is a function of being agile for 0:24:23.120 --> 0:24:27.680 them and being reactive to the current environment that they have—and the rest of the time they have 0:24:27.680 --> 0:24:31.760 to think about the long term. It's a balancing act and I would tell you this is a test of leadership 0:24:31.760 --> 0:24:37.920 today. Yeah. About the ability to think about today with the uncertainty and the speed of 0:24:37.920 --> 0:24:42.000 change but also to think about—you've got to have the strategy as well. You have to do both. You 0:24:42.000 --> 0:24:47.360 have got to do both. Shall we have some questions then from our guests here? We've got a mic—a 0:24:47.360 --> 0:24:53.280 roving mic. So why don't we start from the front and then slowly make our way to the back if 0:24:53.280 --> 0:24:59.200 possible. Just put your hand up and we'll bring the mic to you. And don't forget to tell us who 0:24:59.200 --> 0:25:08.080 you are and which organization you represent. Who would like to start? Thank you. Sorry. Thank 0:25:08.080 --> 0:25:13.680 you. I'm Holga Ali from Swiss Business Publication 100 Sait. I would like to come back to the US for 0:25:13.680 --> 0:25:20.960 a moment. If I'm not mistaken, you said that US is still the number one destination for new 0:25:20.960 --> 0:25:28.560 investments and that the share has even risen. So it's even more attractive—which isn't that 0:25:28.560 --> 0:25:36.240 a little bit surprising, knowing that the administration behaves like a third world country 0:25:36.240 --> 0:25:42.720 in state capitalism, telling companies what to do and what not. So this is something that shouldn't 0:25:42.720 --> 0:25:50.080 raise the attractiveness of an investment destination—or is it too early to see that effect 0:25:50.080 --> 0:25:55.440 in your survey? Would like to know that. Thank you. Thanks for your question Holga. So why is 0:25:55.440 --> 0:25:59.920 America still so attractive? So you know you have actually some fundamentals that exist out there. We 0:25:59.920 --> 0:26:05.600 have had a lot of conversations with many of the organizations that are investing in the US today, 0:26:05.600 --> 0:26:11.440 whether private equity, sovereign funds for example, or principal investors, and we 0:26:11.440 --> 0:26:17.200 asked the question. And today the reason the number is growing is because the fundamentals of the 0:26:17.200 --> 0:26:23.200 US economy and the companies that they're investing in are still very strong. You look at the balance 0:26:23.200 --> 0:26:28.400 sheet of a lot of the companies in the US, the cash flow statement, do they have access to 0:26:28.400 --> 0:26:33.840 capital and the discipline that they use to run their businesses. You know, when you invest, you 0:26:33.840 --> 0:26:38.320 invest in a company, you invest in an opportunity, not only in the country at the macro level. And 0:26:38.320 --> 0:26:44.240 that's what we're seeing in the US because today it's a country that still demonstrates a lot 0:26:44.240 --> 0:26:48.800 of good fundamentals in business in the US today. That's what we're seeing today. And that's 0:26:48.800 --> 0:26:57.120 the reason why they continue to invest. Let's have another question at the back over there. 0:26:57.120 --> 0:27:02.800 Please tell us who you are, sir. Hello, John Paul Ford Rockhouse from the Daily Mail in the UK. 0:27:02.800 --> 0:27:09.120 Can I just ask on another topic related to the US what your reflections are on the events 0:27:09.120 --> 0:27:16.800 of the last few days relating to Greenland and whether you have made any 0:27:16.800 --> 0:27:24.080 representations to the US administration or indeed to the European Union about how they 0:27:24.080 --> 0:27:31.680 handle the issue. So this is about the CEO survey. So let's see if we can tempt Muhammad 0:27:31.680 --> 0:27:35.280 to make a comment there. But I wouldn't be surprised if he says no comment. Let's see 0:27:35.280 --> 0:27:42.560 what he says. Hey, didn't we say that thing is changing very quickly? That's what it is. So yeah, 0:27:42.560 --> 0:27:46.560 I don't think he wanted to bite on your question. I'm terribly sorry. Let's have 0:27:46.560 --> 0:27:55.440 another question then here in the front. Thank you from CBC Turkey. 0:27:55.440 --> 0:27:59.920 I remember last year it was, I think, the CEO of Salesforce saying that we are the last 0:27:59.920 --> 0:28:12.560 generation of CEOs managing real people. Are the CEOs ready for what is next? I am ready. 0:28:12.560 --> 0:28:18.160 It depends where you find yourself in the world. But I think there are statements being 0:28:18.160 --> 0:28:23.360 made saying that we have to adopt technology very fast and we are all going to find ourselves where 0:28:23.360 --> 0:28:28.880 we will have to run businesses in many countries, in many territories, basically where you have to 0:28:28.880 --> 0:28:34.240 use people but you also have to use technology. The two will have to be combined to be able 0:28:34.240 --> 0:28:38.080 to deliver the value of the future—whether it's on the cost side but also on the revenue side. 0:28:38.080 --> 0:28:44.000 So it's a statement to convey the fact that there is no turning back when you think about 0:28:44.000 --> 0:28:48.640 the adoption of artificial intelligence agents. We have a lot of them today and we will continue 0:28:48.640 --> 0:28:53.360 to have them but we also have a lot of people and we continue to hire a lot of people because 0:28:53.360 --> 0:28:59.680 we need them to deliver against our strategy for ourselves but also for our clients. Okay, 0:28:59.680 --> 0:29:05.440 I think we've got a question right here. Please tell us who you are. Thank you very much. 0:29:05.440 --> 0:29:11.200 Shasmosman from the German financial daily Handelsblatt and I would like to know: I think part 0:29:11.200 --> 0:29:19.360 of your results is also that German companies try to find European alternatives to US 0:29:19.360 --> 0:29:25.600 technology. I would like to know if this is some movement or interest you see also in 0:29:25.600 --> 0:29:32.160 other parts of the world and if you think that the new developments we see geopolitically 0:29:32.160 --> 0:29:38.960 could increase it and then maybe make the US economy a little bit less attractive for 0:29:38.960 --> 0:29:44.000 investments. Thank you very much. No this is a good question but I would tell you what 0:29:44.000 --> 0:29:48.480 we have witnessed. We are not going to profess to know what companies are going to do in the future 0:29:48.480 --> 0:29:55.760 based on current geopolitical situations or actions being taken. I would tell 0:29:55.760 --> 0:30:00.640 you what we have seen currently: a lot of the companies—not just in Europe, by the way, there are 0:30:00.640 --> 0:30:05.680 companies across the world; it could be in the US, it could be companies in Europe, it could be 0:30:05.680 --> 0:30:10.720 companies in Asia—the function of technology is not where you are based out of, it's where 0:30:10.720 --> 0:30:15.600 you operate. And depending on where they operate they will decide what is the best technology 0:30:15.600 --> 0:30:21.120 that is more appropriate for the environment: the technological environment, the data environment, 0:30:21.120 --> 0:30:24.800 and the regulatory environment for them to use the technology. That's what we have seen 0:30:25.440 --> 0:30:30.080 drives the technical decision or technology decision of companies. We have not seen yet 0:30:30.080 --> 0:30:35.360 geopolitical actions driving technology decisions. But again, we're not going to predict the future. 0:30:35.360 --> 0:30:40.640 Nobody can do that. But I can just share what we have seen so far. Thanks, Muhammad. And I think 0:30:40.640 --> 0:30:47.600 there's a question over there wearing a white shirt and glasses. Please tell us who you are. 0:30:47.600 --> 0:30:51.840 Good evening. I'm Rory Reynolds from The National in Abu Dhabi. Do we need to have 0:30:51.840 --> 0:30:58.400 a long hard look at how well equipped a lot of traditional CEOs are to manage this digital AI 0:30:58.400 --> 0:31:02.880 transformation because some of them do seem very traditional and I think maybe some of 0:31:02.880 --> 0:31:10.480 their employees agree. Thank you. Would one of you like to take it? Marco, come on up. Marco, 0:31:10.480 --> 0:31:18.000 I was the last person to turn away there, but look, do we—look—CEOs are upskilling? CEOs need to 0:31:18.000 --> 0:31:24.640 upskill like everybody else. And I think some will make that journey effectively, some will find it 0:31:24.640 --> 0:31:31.840 harder. You know, some may give up. I think there's never been a more important time for 0:31:31.840 --> 0:31:37.200 teams leading organizations, not individuals. The CEOs that we see—along with some of those 0:31:37.200 --> 0:31:44.880 statistics—are deploying, as Paul described, AI more broadly into the organization deeper; they've gone past the pilots. 0:31:44.880 --> 0:31:49.520 You know, those are CEOs that are listening to everybody around them and they're backing what 0:31:49.520 --> 0:31:54.320 their people are telling them and they're getting those results early. So, you know, again, I 0:31:54.320 --> 0:32:00.320 think we talk in our organization—as the four leaders of the global network—that we must be learning every day and I think that is 0:32:00.320 --> 0:32:05.120 a principle that CEOs, as these changes accelerate, have to adopt themselves. Yeah, agility is key to 0:32:05.120 --> 0:32:11.760 the point around that. Can we run businesses today the way we ran them in the past? And that's 0:32:11.760 --> 0:32:18.240 applied to many CEOs around the world, right? The answer is no, we can't. Things are changing so fast, 0:32:18.240 --> 0:32:25.120 and it's a different environment—technology-wise and geopolitically—and we have to adapt. 0:32:25.120 --> 0:32:30.560 But the first thing to adapt to a situation, you have to learn from it. That's what Marco just 0:32:30.560 --> 0:32:34.240 said and that's what we see the successful CEOs are doing today, and then to have 0:32:34.240 --> 0:32:39.520 a plan but most importantly not to stop executing and to have the ability to pivot when we get 0:32:39.520 --> 0:32:45.680 new information. The thing—the job—and we said it earlier, Paul said it, every 0:32:45.680 --> 0:32:52.480 CEO today has to run their businesses. They have to transform the business they have today and they 0:32:52.480 --> 0:32:58.400 have to think about the future at the same time in an environment that is evolving very very rapidly. 0:32:58.400 --> 0:33:05.120 It's a new test. It's hugely challenging. Yeah, without a doubt. Let's have a question from 0:33:05.120 --> 0:33:10.240 someone a little further back first. Maybe a blonde lady. I can't quite see you or 0:33:10.240 --> 0:33:15.360 maybe—sorry it's my eyesight. Yeah, you could probably even see back there. Nish 0:33:15.360 --> 0:33:20.720 Bandic from German weekly Stern. I wanted—it's a simple question—just: is climate change still a 0:33:20.720 --> 0:33:29.360 topic for CEOs and still a topic in your survey? Indeed it is and I think Marco 0:33:29.360 --> 0:33:36.240 mentioned it, didn't you, earlier? Yeah, please. So maybe I can go on that one. Yeah, it's still 0:33:36.240 --> 0:33:42.080 a topic. And so what we are seeing is—also coming from our investor survey—that companies 0:33:42.080 --> 0:33:49.120 are challenged how to translate technology into—and including technology working for— 0:33:49.120 --> 0:34:00.720 sustainability for sustainable business. So it's a business topic. It has become 0:34:00.720 --> 0:34:07.360 a business topic and so we see it still on the radar. It has become a different notion. You 0:34:07.360 --> 0:34:12.720 might have seen it also here in Davos. It's not off and we see the businesses changing for the 0:34:12.720 --> 0:34:18.480 future. They are tackling their business and looking at what the business model can be as 0:34:18.480 --> 0:34:25.680 a USP, taking up sustainability for a sustainable future of the business model in itself. So 0:34:25.680 --> 0:34:31.920 the topic has become a different drive but it's not off. And as we heard earlier, 0:34:31.920 --> 0:34:39.520 I mean impact risk of sustainability has moved towards energy transition; it is still there. So 0:34:39.520 --> 0:34:45.440 you are asking a—you said a simple question. I think the answer is not so simple for the 0:34:45.440 --> 0:34:52.160 business leaders. So we see them also taking it on but having some difficulties with it. 0:34:52.160 --> 0:34:55.920 But it's still there. Thanks Petra. Thank you Petra. And I think there are quite a 0:34:55.920 --> 0:35:02.560 few other people. Yes please. In the middle there in a cream jacket. Thank you. I'm from 0:35:02.560 --> 0:35:10.240 China Service. My question is simple: how inclusive can AI become a new engine of economic 0:35:10.240 --> 0:35:16.880 growth from the perspective of CEOs? Thank you. Can you—could you just repeat that question? 0:35:16.880 --> 0:35:25.040 How inclusive—how inclusive can AI become a new engine of economic growth? How inclusive can 0:35:25.040 --> 0:35:30.160 AI drive economic growth? Okay, thank you. Oh, looks like Paul is very keen to answer that. Yeah, 0:35:30.160 --> 0:35:36.080 happy to—look at him here. I first of all love the question because if you go back to 0:35:36.080 --> 0:35:44.640 the differentiating power of AI, listen: the first move is often operational efficiency. The 0:35:44.640 --> 0:35:52.640 opportunity for tomorrow is how do you leverage the value of this transformative technology to 0:35:52.640 --> 0:35:56.480 connect more intentionally with consumers, to change the front end of the sales platform, to 0:35:56.480 --> 0:36:03.520 change the value equation, to introduce and take advantage of new vectors of value that create 0:36:03.520 --> 0:36:12.400 impact for the end customer. And so in terms of AI's power and potential to expand the revenue 0:36:12.400 --> 0:36:18.400 opportunity, it is real. And the survey suggests that again 30-ish%—I can't remember the number off 0:36:18.400 --> 0:36:26.080 the top of my head—are seeing AI drive revenue opportunity, not just those cost synergies and 0:36:26.080 --> 0:36:31.200 the efficiencies that are there as well. So it's a real opportunity. Maybe the only other thing I'd touch on, 0:36:31.200 --> 0:36:40.480 and this comes back to inclusion as the enabling power of AI for a 0:36:40.480 --> 0:36:47.120 workforce. I mean, listen, I like to think of it as AI really does raise the floor of potential, 0:36:47.120 --> 0:36:52.800 but it's still the people—it's still the leaders—who raise the ceiling. And so, you know, 0:36:52.800 --> 0:37:02.960 AI being such an accelerant for enabling expertise is certainly exciting for businesses today, 0:37:02.960 --> 0:37:07.600 but even more so for what's to come in the future. Yeah. Great, Paul. It's a very nice 0:37:07.600 --> 0:37:13.040 image. AI raises the floor, but leaders raise the ceiling. I think we have time. Do you want to say 0:37:13.040 --> 0:37:17.600 one? Yeah, I want to say one more thing around AI for inclusion and depending on where you 0:37:17.600 --> 0:37:23.120 find yourself in the world, when you think about artificial intelligence today, what does it do? 0:37:23.120 --> 0:37:28.720 It democratizes access to knowledge. So when you think about inclusion, knowledge inclusion—meaning 0:37:28.720 --> 0:37:33.600 that other parts of the world can have access to knowledge that are sitting in different 0:37:33.600 --> 0:37:39.600 geographies—and that is for us inclusion for AI: how can we disseminate knowledge across 0:37:39.600 --> 0:37:45.280 all of PwC, across all of the countries that we work today so that we can actually include everybody 0:37:45.280 --> 0:37:51.040 within that knowledge base? And it's not just us; we see many companies doing the same. So for me AI is 0:37:51.040 --> 0:37:55.680 the technology that can be the most inclusive—but inclusion of what? Inclusion to knowledge—because 0:37:55.680 --> 0:38:00.960 the more knowledge people have the more innovative they can be and honestly in many economies you can 0:38:00.960 --> 0:38:06.720 see new jobs being created etc. It is going to give a shot to many parts of the world 0:38:06.720 --> 0:38:11.680 to join that new AI economy. Why? Because they have access to knowledge. Let's not forget that 0:38:11.680 --> 0:38:16.480 when you have access to knowledge, that is how you create the next generation jobs 0:38:16.480 --> 0:38:21.520 and a lot of societies also can come out of where they are today and join this AI boom that we are all 0:38:21.520 --> 0:38:26.960 witnessing today and the next innovations. That was a cool question. One last question I think we 0:38:26.960 --> 0:38:31.040 have time for and I think it's going to be this lady in the front over here. Thank you. Briefly, 0:38:31.040 --> 0:38:39.440 please. Yes. Hi, Aisha from ET Now in India and I just had a question. One of your CEO surveys 0:38:39.440 --> 0:38:47.280 said whether the AI capex will make money. When will it and is it fair to put a timeline 0:38:47.280 --> 0:38:55.280 to when it will? This is a yes or no question. A simple one. No, it's not. The answer is no. It won't make money. No, no, 0:38:55.280 --> 0:39:02.080 no. The answer is no. Don't put a timeline on it. Okay. Because it continues to evolve. The reason why we're saying 0:39:02.080 --> 0:39:07.120 that there is investment when you think about artificial intelligence and you think about all 0:39:07.120 --> 0:39:10.240 the money that people are saying is being spent in 0:39:10.240 --> 0:39:15.280 AI—in what part of AI? In the technology, the large language models, and the agents; in the real estate; 0:39:15.280 --> 0:39:23.680 in the data centers; in the chips; in energy; in industrial equipment—that's the AI ecosystem. We're 0:39:23.680 --> 0:39:31.760 telling people: do not stop to drive innovation across all of these different layers of the AI 0:39:31.760 --> 0:39:37.200 ecosystem. The more innovation you have, the more it will be affordable for companies at large scale 0:39:37.200 --> 0:39:43.760 around the world. So, we say don't stop. Don't look for short-term goals. Look 0:39:43.760 --> 0:39:49.280 for short-term benefits or short-term outcomes. But we saw the same movie 25 years ago with the 0:39:49.280 --> 0:39:55.600 internet, with the mobile internet. Look at where we are today. Many of the companies that 0:39:55.600 --> 0:40:01.280 are on top of all the financial markets today did not exist 25 years ago when we studied the mobile 0:40:01.280 --> 0:40:07.040 internet. Let it play out so we can all embrace this new golden age of innovation because of AI. 0:40:07.040 --> 0:40:14.480 But don't put a time stamp on it because you don't want people, because of short-term goals, to stop 0:40:14.480 --> 0:40:18.960 investing into the future. That's why. So one last final question for you Muhammad. If you had to 0:40:18.960 --> 0:40:25.920 leave business leaders with just one message from this year's CEO survey, what would it be? First, 0:40:25.920 --> 0:40:34.400 learn about what's happening and learn fast. We cannot solve problems if we don't understand them. 0:40:34.400 --> 0:40:41.520 Understanding what's happening geopolitically, what's happening on the technology front. Second, 0:40:41.520 --> 0:40:47.440 create optionality. Scenario planning is going to be very important, but it is really important not 0:40:47.440 --> 0:40:53.600 to freeze but to continue to execute—move beyond experimentation into business transformation. And 0:40:53.600 --> 0:41:01.680 third, agility. If things change, the ability to move very quickly without compromising on 0:41:01.680 --> 0:41:08.240 the future. We know it is hard, but it is a new role for leaders around the world. We got to do 0:41:08.240 --> 0:41:14.720 this. Be brave. Be bold. Be brave. Be bold and be agile and be patient, but it's 0:41:14.720 --> 0:41:21.760 okay to fail. Muhammad, thank you very much for joining us. Thank you to all of you for coming 0:41:21.760 --> 0:41:27.920 here today in Davos. If you'd like to download the full survey, it's full of nuggets. You can go to 0:41:27.920 --> 0:41:33.840 ceosurvey.pwc. Next year, by the way, we will be celebrating the 30th PwC global CEO survey. So, 0:41:33.840 --> 0:41:42.800 please do join us again for that big milestone. For now though, from Nisha, from Muhammad, from 0:41:42.800 --> 0:41:49.360 all of us on the PwC team here in Davos, thanks for joining us. Goodbye. Thank you.