PwC Pulse Survey: Focused on reinvention

Sector implications

Executive summary

Industry executives and private company leaders are increasingly optimistic about the business environment and their companies’ ability to manage risk as they focus on the future. They are looking to technology and their people as the keys to transformation. When asked to pick their top strategic priority for the next three to five years, however, the answers vary across sectors.

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Consumer markets


of CM leaders plan to invest in new technologies over the next 12 to 18 months

Tech leads the way for consumer-facing companies

Taking their cue from consumers who signal a willingness to adopt generative AI (GenAI), leaders at consumer-facing companies told us their highest strategic priority over the next three to five years is embedding artificial intelligence (AI) and GenAI into their business models. In the near term, 73% expect to use GenAI to support new business models over the next 12 to 18 months, according to our August 2023 Pulse Survey. They’re prioritizing investments in cloud and AI (59%) as well as in GenAI (44%) over all other strategic business changes. 

As consumers continue to demand a secure, seamless combination of digital and physical options for their information-gathering and shopping needs, 73% of consumer markets (CM) leaders tell us broader, more frequent cyberattacks pose a moderate or serious risk. In response, 75% are closely monitoring or actively engaging with lawmakers on cybersecurity policy.

To keep up with ever-changing consumer preferences, CM leaders recognize the importance of business reinvention, and 79% say they have the right culture for it. At the same time, they acknowledge that internal challenges could impede transformation –– the cost of adopting new technology (86%), achieving efficiency and cost savings (86%) and training workers on new tech (84%). 

More than a third of CM companies surveyed (37%) have already started upskilling employees on new tech while 30% have a plan in place to do so. To retain employees, 39% have already increased their compensation, and 24% plan to. Given these measures to nurture talent, 75% of CM leaders are confident in their ability to attract and retain workers. Despite some lingering concerns about economic and geopolitical uncertainty, CM leaders are looking ahead with optimism, planning for a human-powered, tech-enabled future in response to consumer demand.

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Energy and utilities


of leaders say changing operating models to support new vision could significantly challenge their ability to transform over the next three to five years

Energy and utilities reinvent to lead in energy future

Staying relevant and economically viable in the energy ecosystem of the future is the goal. Changing how the business runs is one way to get there. But this could also be a roadblock to reinvention for energy and utilities, according to PwC’s August 2023 Pulse Survey. More than half of the industry leaders surveyed say changing operating models could be the most significant internal challenge affecting the ability to transform. 

In the backdrop lurks an evolving climate and cyber regulatory environment, continued geopolitical uncertainty, margin and earnings pressures and other potential risks. This includes not meeting sustainability commitments, which 66% of energy and utilities executives say could pose a moderate or serious risk to their company, higher than the 52% overall. Because of business conditions, 60% of industry executives say they plan to make changes to strategic planning within the next 12 to 18 months — the top-planned strategic business change for the sector. Just two years ago in another Pulse Survey, only 34% of energy and utilities leaders said this was a focus. 

Revamping strategic planning will likely require C-suite collaboration and asking questions like these across the organization. 

Investing more in emerging tech is a top item on the leadership agenda for most. Of course, investing in technology isn’t always enough as some industry operations executives learned from supply chain digitization efforts. These leaders and others can get better results from tech by establishing a shared vision for the outcomes, understanding the business and technical capabilities needed, committing to digital upskilling and new processes as well as embracing other leading practices for sustained success and business reinvention.

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Financial services


of financial services executives cite measuring the ROI of adopting new technologies as a significant challenge

Financial services’ love-hate relationship with technology

What are the highest strategic priorities for financial services leaders over the next three to five years? Pursuing changes that can enhance their long-term viability, specifically embedding new technologies into their business model, entering new markets and digitally transforming existing products, according to PwC’s August 2023 Pulse Survey. But technological transformation is also financial services’ biggest pain point. Roughly half of those surveyed (51%) say they have trouble measuring a new technology’s return on investment (ROI), and 43% say it’s a challenge to foot the bill for the latest digital breakthroughs. The findings echo what we see with some clients, where they recognize that transformation is a high priority but need an operational appraisal to illuminate how a project’s ROI will be generated. Meanwhile, some in the industry are becoming cloud-powered companies and reaping digitization’s rewards in the form of better decision-making, reduced expenses and faster development of new products.

There’s another reason besides remaining relevant and competitive for financial services firms to digitally transform — cybersecurity. Nearly half of those surveyed (49%) say more frequent and broader cyber attacks are a serious risk their company faces, far outpacing margin pressure and an uncertain economy (each garnered 34%), the next two leading risks. The sensitive nature of customer financial information coupled with the increasing number of financial services employees who work remotely heightens the potential risk. To harden cybersecurity defenses against multiplying threats, financial services firms likely need to employ the newest advances in artificial intelligence, which perform better on the latest computer architecture. In the digital age, leading risk detection can help companies meet new regulatory demands that are raising the bar for cybersecurity — and it can help financial services firms earn trust from customers who want to know that their personal information is safeguarded.

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Health industries


of health industry executives say difficulty attracting and retaining talent is a moderate or serious risk to their business

Finding and keeping talent is top risk in health industries

The healthcare industry continues to face a talent crisis, with clinicians leaving their jobs because they have burned out, stressed out or aged out of the profession. Severe clinical workforce shortages, combined with increased patient demand, are compounding inflationary pressures. It’s little surprise, then, that talent acquisition and retention is the biggest risk to health industry companies, according to 82% of industry executives responding to our August 2023 Pulse Survey. Worse, our Behind the numbers 2024 report found these economic forces are expected to contribute to a 7% increase in medical costs for 2024. The healthcare system’s waste and redundancy also creates resource demand.  

To become better positioned to attract and retain talent, healthcare execs are starting to rethink their traditional workforce and business models and invest in technology and innovation. Some are even investing in their own schools for clinical staff training and development. Building the talent pipeline, tailoring benefits, redefining the care team and model, and setting an aggressive digital- and automation-led agenda to improve productivity are some strategies. Better patient care automation can, for example, enable nurses to spend more time with patients and less time on administrative or lower priority tasks. New artificial intelligence and digital approaches to delivering care such as telemedicine can require fewer on-site resources. Tech-led collaborations can serve as sources of innovation, enabling better clinician staffing as well as diagnosing and treating patients using at-home blood tests, telepathology, medical imaging, data repositories and other methods.

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Industrial products


of industrial products leaders say talent acquisition and retention present moderate or serious risks to their business

Manufacturers grapple with economic pressures, yet eye future reinvention

US manufacturers continue to face challenging conditions with July 2023 marking the ninth consecutive month of contracting economic activity for the sector. Indeed, industrials are encountering risks on numerous fronts, according to our August 2023 Pulse Survey, including an uncertain macroeconomic environment, which 72% of sector leaders say poses a moderate or serious risk to the business, and talent acquisition and retention (71%). Nearly half of these industrial products sector leaders (47%) expect a recession in the next six months. Meanwhile, they’re also facing risks tethered to a more digitalized world, most notably cyber attacks (74%) and a lack of consumer trust in new tech-enabled products and services (53%).

These companies are, however, addressing such challenges head-on. One in five (19%) plan to reshore or onshore production over the next 18 months, far more than other sectors surveyed. Most (58%) are investing in new technologies including artificial intelligence and cloud. Looking out further into the next five years, a quarter of them (26%) cite reinventing their businesses with new revenue streams driven by new products, services and entering new markets as their highest strategic priority. 

Still, as sector leaders eye long-term business transformation, having the right culture to do so is a concern. About one third (30%) say a significant internal challenge to transform over the next five years is that their company culture is not conducive to innovation. New technology adoption is also making some industrial workforces jittery, and 24% of sector leaders cite employee fears that new tech will make their jobs obsolete.

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Technology, media and telecom


of TMT leaders say new tech, like GenAI, threatens current business models

Striking the balance between tech power and people power

As technology, media and telecom (TMT) leaders look to grow their businesses, two main concerns keep them up at night –– the impact of emerging technologies and balancing that disruption with talent attraction, retention and engagement. 

In our August 2023 Pulse Survey, 67% say new technologies like generative AI (GenAI) could make their current business model irrelevant. Keeping up with disruption isn’t just problematic, it’s expensive. Forty percent say the cost of adopting new technologies is a significant challenge to their business transformation strategy. Despite the challenges, there’s a lot of optimism around the potential of emerging tech like GenAI –– and some big bets. As GenAI changes the game for business models, TMT leaders are reevaluating what they need to help them ride this wave of disruption effectively. And top talent can help the business realize returns on tech investments. The good news is that more than half of workers have positive expectations for artificial intelligence’s (AI) impact in the workplace. 

TMT leaders are also sharpening their strategies for attracting and retaining workers with in-demand skills, and 40% say they’re hiring or planning to hire in specific areas to drive growth. But the sector often struggles to attract and keep top players, with 67% citing talent acquisition and retention as a major risk to their company. 

In striking the right balance in retaining and engaging employees, TMT leaders are also considering productivity and profitability imperatives to preserve or improve margins. Recent layoffs in big tech may have left some employees reeling, but many rebounded and quickly found new opportunities. This “reshuffling” to find the right talent to meet this disruptive moment is reflected in sector workforce planning, and 60% of leaders in the TMT sector tell us they’re reducing or planning to reduce their overall headcount. On the other hand, many TMT companies are focusing on their existing employees, with raises and retention bonuses on the docket, along with expanded mental health benefits. Execs are looking to foster a more positive culture that helps boost retention –– and delivers value. Building a better culture should involve implementing workforce strategies to drive tech adoption while also driving growth.

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Private companies


of private companies agree there is a high level of trust between their company's leaders and employees

For private companies, tech transformation is tied to a culture of trust

Private companies know their audience –– and in an environment of technological, economic and global disruption, growing their brand and maintaining company legacy may come down to an established culture of trust. 

Leaders understand a brand extends beyond customers, that culture counts. Three quarters of private company executives tell us there’s a high level of employee-leader trust. According to our Cloud Business data, 39% of private companies said all of their operations are already in the cloud — but there are challenges, nonetheless. So when planning on strategic transformation, employee trust can be a big win for long-term business success. And with 88% of private companies saying they’ll invest in new technologies as a business strategy over the next 12 to 18 months, keeping employees engaged and supportive is a must.

Yet undertaking the heavy lift of a digital transformation means private companies need to look at internal challenges facing them over the next three to five years. Despite having built a culture of trust with employees, private leaders may need to reassess whether they’ve fostered a culture of innovation. Fully a quarter don’t agree that their culture is right for reinvention, our August 2023 Pulse Survey shows. Additionally, private company executives realize having a poor succession plan (38% say it is a significant challenge to transforming), finding measurable value from adopting new technologies (34%) and training existing talent to fully leverage digital investments (25%) can present formidable hurdles. 

These leaders are reflecting on what they need over the next year and a half to succeed. New talent can help propel change, and 59% will look to hire in specific areas to drive growth. Streamlining operations may address inefficiencies: 41% see cost cutting as a necessary strategic business change. And with good reason. The cost of capital has increased and 69% of private companies say that margin pressure affecting earnings poses a risk.

Despite these challenges, private companies appear prepared to launch a future that embraces the adoption of transformational tech. Accelerating from past data on tech engagement, a staggering 88% say they expect to invest in new technologies, such as cloud and artificial intelligence to support new business models in the next 12 to 18 months, compared to 58% of public company executives.

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J.C. Lapierre

J.C. Lapierre

Chief Strategy and Communications Officer, PwC US

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