I met a lot of optimism when I visited Brazil recently, and our CEO survey confirms it: Brazilian CEOs are bullish. They also may be among the world leaders in their approach to artificial intelligence (AI).
As part of a series on what CEOs in different countries (such as China and Japan) are thinking, my team broke down the data from PwC’s global CEO survey to see how Brazilian CEOs see the future. One takeaway is that they’re relatively optimistic.
Our survey showed that 50% of Brazilian CEOs expect global growth to accelerate, compared to only 42% of the global sample. Looking at their own prospects, 44% of Brazilian CEOs are “very confident” that their revenue will grow in the coming 12 months. Only 35% of global CEOs say the same. Brazil’s corporate leaders are also some of the few in the world to be more optimistic about their prospects this year than last: 44% vs. 39%.
The likely reason for this optimism, as I discussed in my previous post on Brazil, is a new, market-friendly government which has a real opportunity to push through much-needed pension and tax reforms as well as measures to cut down on red tape for business.
Brazilian CEOs’ top concerns, as reported in our survey, are very different from global CEOs and help show why the government’s planned reforms are so necessary. Policy uncertainty was the top concern, cited as “extremely concerning” by 67% of respondents, followed by the rising tax burden (63%), populism (54%), excessive regulation (50%), and inadequate basic infrastructure (48%.)
In the global sample, none of these were called “extremely concerning” by more than 35%.
Policy uncertainty, a rising tax burden, populism, excessive regulation, and poor infrastructure — there are good reasons why these are concerns in Brazil.
The government’s reform plans are still slowly working through Congress. Meanwhile, Brazilians pay nearly a third of GDP in taxes (significantly more than in the United States), and the tax and regulatory system has multiple, overlapping federal, state, and local taxes and rules — though proposed reforms would reduce both the burden and the complexity.
The country where the most CEOs are planning to invest in AI over the next five years? It’s not China, the United States, or Japan. It’s Brazil. In our survey, 59% of Brazilian CEOs said that their organizations would be using AI in the next five years. The global average was only 40%.
To understand that number, I consulted with a few of my colleagues. “Brazil is a developing country,” Ana Malvestio, a partner at PwC Brazil currently working on my team, told me. “Many companies see in AI a chance to leapfrog through several stages of development and get into the lead.” Interestingly, after Brazil, our survey found that the next highest level of interest in AI came from Africa, where 52% of the CEOs in our survey are planning to invest in AI over the next five years.
Bruno Porto, the head of Inbound services at PwC Brazil, said that Brazil has a homegrown AI ecosystem, with local startups, often financed by venture capital and private equity firms from abroad. AI for banking / fintech, transportation / logistics, e-commerce, agribusiness and healthcare is advancing especially quickly. “Brazil is having its own tech boom, focusing on customer experience,” he says, noting that the country already has more cell phones than people.
Brazilian CEOs are seizing these opportunities: 57% plan on partnering with startups or entrepreneurs to grow revenue this year, compared to only 32% of the global sample.
Investment in AI and partnerships with startups are a key component of what I earlier called a “no-regrets strategy”: measures CEOs can take to increase growth and profits, no matter how the geopolitical winds blow.
So it’s great to see that Brazilian CEOs aren’t just optimistic. They’re making some smart moves to increase the odds that their optimism is warranted.