PwC’s 24th Annual Global CEO Survey this year polled 5,050 CEOs in 100 countries and territories over January and February 2021. One year after COVID-19 was declared a pandemic, CEOs are voicing record levels of optimism in the global economic recovery, with 76% of global business leaders predicting that economic growth will improve in 2021.
The percentage of CEOs expressing confidence in growth is up from 22% in 2020 and 42% in 2019, representing the highest level of optimism since the survey started asking this question in 2012.
“After a year of human tragedy and extensive economic hardship, it is encouraging to see that the people responsible for making investment decisions and hiring staff are feeling cautiously optimistic about the year ahead. CEOs have faith that growth will return, boosted by the rapid development of vaccines and their rollout in many parts of the world,” said Bob Moritz, Chairman of the PwC Network.
“During the tumultuous past year, CEOs have had to rethink and reconfigure what they do and how they do it, while dealing with stretched balance sheets and supporting employees who have been forced to navigate these extraordinary circumstances.
“CEOs now face two fundamental challenges: first, how to build trust with a broad range of stakeholders, whose expectations of business are higher than ever before; and second, how to adapt their businesses and deliver sustained outcomes in a rapidly changing external environment. Organisations that get this right will be best placed to come out of the pandemic as strong, resilient and productive businesses, able to withstand future shocks.”
Speaking about the Isle of Man, Ian Clague, Senior Partner at PwC Isle of Man, commented: “The survey echoes many of the key themes laid out in the Isle of Man’s economic recovery strategy - to move towards a digital, green, safe Island. The survey identifies the need for significant investment by business in areas such as risk management, cybersecurity and digital transformation. Responses to a local poll we ran at the 2021 Manx State of the Nation conference last month showed there is a real opportunity to embrace transformational change in the compliance space helping to decrease costs while increasing efficiency. Alongside these areas more commitment is needed to fully embed climate change into business strategy; these are priorities which cannot be ignored.”
Key highlights include:
An improved outlook
CEOs are more optimistic about the outlook for their businesses. Some 36% of those polled said they are “very confident” about their organisation’s prospects for revenue growth over the next 12 months, up from 27% of CEOs in 2020. UK CEOs are more upbeat: 40% are “very confident” about revenue growth this year. The decisions most CEOs are prioritising relate to organic growth and sensible cost efficiency, as they look to control costs.
Increased concern about most threats
Cyber threats have fast become a major source of anxiety, and is now the second highest concern among CEOs - topped only by pandemics and health crises. It was selected as an extreme concern by 47% of CEOs, compared with 33% in 2020. Also of greater concern this year is misinformation, 28% are ‘extremely concerned’, up from 16% in 2020.
The perennial number one concern for CEOs globally since 2014 over-regulation remains very high with 42% of CEOs selecting it as an extreme concern, up from 36% in 2020.
In 2020, tax policy uncertainty ranked outside the top ten concerns for CEOs, with only 19% of CEOs concerned. This year, it has increased rapidly in importance, leaping up to seventh place (31%), with CEOs undoubtedly watching government debts accumulate and realising that business taxes will likely need to rise.
Digital investments for the future
Asked about their spending on digital transformation, nearly half of CEOs (49%) project increases of 10% or more. Despite the rising level of concern CEOs are voicing about cyberattacks, this has not translated into definitive actions. Less than half of the CEOs planning for heightened digital investment are also planning to boost their spending on cybersecurity and data privacy by 10% or more.
At the same time, a growing number of CEOs – 36% – plan to use automation and technology to focus on productivity and boost their organisation's competitiveness, more than double the share of CEOs who said the same in 2016.
The climate change challenge
Last year, 24% of CEOs selected climate change as an extreme concern; this year, it was selected by 30%. This may seem like a notable jump, but in the context of rising anxiety about nearly all threats, it represents just a marginal increase. What’s more, 27% of CEOs report not being concerned about climate change; and 60% of CEOs have not factored it into their strategic risk management activities. Just 23% of CEOs plan to significantly increase their investment in sustainability and ESG initiatives over the next three years.
Bob Moritz added: “At the pandemic’s one year mark, we're at an inflection point as vaccination begins to ramp up around the world. Although the shape of the recovery remains unknown, it is clear that we cannot simply go back to the way things were before. To achieve the kind of change that’s needed, CEOs will need to think differently and constantly evaluate their decisions and actions against broader societal impacts. In doing so, they’ll set a course that builds trust and delivers sustained outcomes for shareholders, society and our planet."
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