Skip to content Skip to footer

Loading Results

TMT CEOs balance bold growth with evolving threats

Start adding items to your reading lists:
or
Save this item to:
This item has been saved to your reading list.

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 spent vast amounts 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 as well as potential paths to overcome challenges and make growth ever-more sustainable.



US TMT CEOs more optimistic than global peers


Next 12 months
Next 3 years

US TMT CEOs
%
%
Global TMT CEOs
%
%

Source: PwC 24th Annual Global CEO Survey
Q: How confident are you about your organization’s prospects for revenue growth over the next 12 months/three years?
Base: US TMT = 34; Global TMT = 591

1. Accelerating growth: Organic growth and operational efficiencies lead the way

More so than their global counterparts, US TMT leaders plan to drive growth over the next 12 months via several major initiatives. At the top of the list is organic growth — both to accelerate their own transformation and to meet customer demands. 

They’re also leading the way on consumer privacy. Ahead of all sectors in adapting hybrid work models for operational efficiency and employee satisfaction, TMT companies are raising the bar for operational efficiency via cloud migration

In pursuit of growth, 62% of US TMT companies plan to seek new deals in 2021 (compared with 34% of their global counterparts). PwC analysis of our Global M&A Integration Survey indicates that TMT companies often aim high with acquisitions, which can command high valuations — yet many then see results that fall short of expectations. Hopes for post-deal market share growth and revenue synergies tend to be particularly hard to fulfill. 

Key takeaways

With growth a priority, many leading TMT companies are turning to the cloud for operational efficiencies as well as to accelerate business transformation. Meanwhile, it’s critical to take measures to boost the go-to-market payoff from acquisitions.



Growth is top of mind, both organic and via deals


US TMT
Global TMT

Pursue organic growth
%
%
Seek operational efficiencies
%
%
Launch a new product or service
%
%
Pursue new M&A
%
%
Form a new strategic alliance or joint venture
%
%

Source: PwC 24th Annual Global CEO Survey
Q: Which of the following activities are you planning in the next 12 months to drive growth?
Base: US TMT = 34; Global TMT = 591

2. Investing in the future: Bold investments drive growth

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 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.



Tech and people lead 3-year investment priorities


Digital transformation
%
Leadership and talent development
%
Cybersecurity and data privacy
%
R&D and new product innovation
%
Sustainability and ESG initiatives
%

Source: PwC 24th Annual Global CEO Survey
Q: How do you plan to change your long-term investments in these areas over the next three years, as a result of the COVID- 19 crisis (rate of increase)?
Base: US TMT = 34

3. Evolving risks: Focused on resilience to build confidence

Despite optimism about the pandemic response, public health remains top of mind for 100% of TMT leaders in the US with pandemics and health threats topping their list of concerns. A close second at 97% is cyber risk. The rise of remote work and cloud computing has led to new challenges as both these shifts may involve more sensitive data leaving corporate premises. 

Meanwhile, even though they are optimistic about their own prospects for growth, TMT leaders are concerned about the lingering effects of the pandemic on overall economic growth, with 94% saying uncertainty in economic growth is a concern. Over-regulation, typically a key concern, dropped down on this year’s list of risks. 

Key takeaways

As they delve deeper into digital transformation, TMT leaders will need to shore up cyber resilience. On the regulatory front, some companies have already begun working with industry partners and policymakers to create an alliance of advocacy.



Balancing old and new risks


US
Global

Pandemics and other health threats
%
%
Cyber threats
%
%
Uncertain economic growth
%
%
Over-regulation
%
%
Climate change and environmental damage
%
%

Source: PwC 24th Annual Global CEO Survey
Q: How concerned are you about . . . ?
Base: US TMT = 34; Global TMT = 591


4. Tax policy outlook: 65% of US TMT leaders are concerned about rising taxes

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 other US sectors as well as among 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.



Tax policy takes center stage


US TMT
Global TMT

Q: How concerned are you, if at all, about…?

Tax policy uncertainty

Somewhat concerned
%
%
Extremely concerned
%
%
Not very concerned
%
%
Not concerned at all
%
%

Increasing tax obligation

Somewhat concerned
%
%
Extremely concerned
%
%
Not very concerned
%
%
Not concerned at all
%
%

PwC 24th Annual Global CEO Survey
Q: How concerned are you about ...?
Base: US TMT = 34; Global TMT = 591

5. Leading on sustainability: ESG lens reframes business performance

TMT companies are not just leaders in innovation. They’re also preparing to lead — and communicate their leadership — on sustainability. Indeed, 76% of US TMT CEOs told us they’re concerned about climate change and environmental damage versus 65% of their global peers. 

Responding to strong investor and consumer interest in their environmental, social and governance (ESG) policies, TMT companies plan to improve reporting and transparency, with 65% saying they will adopt new ESG disclosure policies in 2021, compared to 37% all US sectors. 

Key takeaways

By evaluating business performance through an ESG lens, TMT leaders have an opportunity to reframe the story — including their company’s purpose and how it adds value for shareholders, customers and the wider community. Ultimately, the ESG lens is an increasingly important element of go-to-market and talent strategies for TMT companies.



Raising the bar on ESG reporting


Adopt new disclosure standards
%
Enhance reviews of disclosures (i.e. Disclosure Committee approval, Internal Audit testing)
%
Invest in technology and automation for data collection
%
We don't plan to make any changes
%
Increase staff capacity to support disclosures
%
Don't know
%

Source: PwC 24th Annual Global CEO Survey
Q: Within the next 12 months, which of the following changes does your organization plan to make in response to increased pressure from investors to disclose ESG factors affecting your business?
Base: US TMT = 34

Building the foundations of long-term growth

The optimism of US TMT CEOs is built on solid foundations. As their investments in the cloud, artificial intelligence and other digital initiatives increasingly move from the back office to the business, TMT companies are ever-more-prepared to satisfy business customers and consumers. 

With proactive measures to address health issues, cybersecurity, regulatory compliance, environmental impact and tax challenges, as well as a strategic approach to M&A and post-deal integration, the coming years appear ripe with possibility for the sector. 

Contact us

Vicki Huff Eckert

Vicki Huff Eckert

New Ventures & Innovation Leader, PwC US

Follow us

Required fields are marked with an asterisk(*)

By submitting your email address, you acknowledge that you have read the Privacy Statement and that you consent to our processing data in accordance with the Privacy Statement (including international transfers). If you change your mind at any time about wishing to receive the information from us, you can send us an email message using the Contact Us page.

Hide