TMT CEOs balance bold growth with evolving threats

By an overwhelming majority (97%) CEOs at US-based technology, media and telecom (TMT) companies are confident about growth, both in the short term (12 months) and further out (three years), according to PwC’s 24th annual Global CEO Survey.

They have good reason for confidence. The flexible, resilient business models they already had in place before the pandemic allowed them to pivot to hybrid remote-work arrangements, while shoring up customer experience for consumers who were spending of time online. Many have also made forward-looking acquisitions. 

Yet, like all sectors, TMT companies also face challenges, some old, some new and some accelerating. TMT CEOs are, for example, very concerned about environmental threats and the likelihood of tax policy changes to address government debt. Our analysis of the survey reveals how TMT CEOs see the world, and puts forward potential paths for overcoming challenges and making growth increasingly sustainable.

The pandemic laid bare the need for accelerated investment in key initiatives over the next few years. Already ahead of the curve, TMT leaders in the US will continue to shore up digital transformation, including cloud-based initiatives. 

For leadership and talent development, another key area of investment, PwC’s analysis of responses from chief human resource officers identified three clear priorities: driving inclusive leadership, maintaining organizational culture and standardizing technology platforms to support both in-office and remote workers. 

Cybersecurity and privacy continue to be long-running challenges. Given the ongoing risks, regulations and consumer pressure, one growing response is to integrate cybersecurity and data privacy investments with business growth initiatives. 

Key takeaways

Rather than first rolling out a digital transformation initiative and then having cyber and privacy teams collaborate to make it secure and compliant, forward-looking TMT firms are giving cyber and privacy experts a seat at the table from the outset. The result: data-driven business models with built-in trust.

Some two-thirds of US TMT leaders (68%) are concerned about tax policy uncertainty while 65% are anxious about a possible increase in their tax obligation. Perhaps reflecting effective tax planning on the part of many US TMT companies, these levels of concern are slightly lower than both other US sectors and global TMT peers.  

Looking further down the road, however, US TMT CEOs are very concerned about possible tax policy changes in response to rising government debt levels. The vast majority (94%) say such changes would lead to increased tax obligations for their companies. 

Many leaders are already considering their response: More than 60% told us such tax policy changes would influence planning and decision-making, causing them to reconsider cost structure. More than 40% say such changes in tax policy would lead them to reconsider their geographic footprints and workforce strategies.

Key takeaways

With most TMT CEOs convinced that higher taxes are likely, and with tax policy still uncertain, actions tax leaders can take now include modeling and planning for proposed changes. They can also communicate the potential impact of tax proposals on jobs and business operations. Where interests are aligned, coalitions and trade organizations offer additional ways for companies to engage on key issues to bring meaningful change.