According to a new survey of CEOs by one of the biggest consulting firms in the world, PwC, more executives are feeling better about the state of the global economy, but an increasing number believe their companies won’t survive the next ten years without a major overhaul due to pressure from climate change and technology like artificial intelligence.
As corporate titans, politicians, and activists flocked to Davos, Switzerland for the World Economic Forum’s annual conference, a poll of over 4,700 CEOs worldwide was revealed on Monday. The results painted a mixed picture of what lies ahead in the years to come.
Executive confidence in the condition of the economy increased to 38% from 18% the previous year, when the world was beset by high inflation, sluggish growth, rising interest rates, and other issues.
According to the PwC Global CEO Survey, CEOs’ expectations of an economic downturn have decreased to 45% from a record-high 73% last year. Additionally, fewer CEOs believed that their organization was significantly exposed to the risk of geopolitical conflict. That is in spite of the conflicts in the Middle East and Ukraine, as well as the interruptions to international trade caused by the Houthi rebels of Yemen’s attacks on commercial ships in the Red Sea.
The World Bank stated last week that it expects the global economy to slow for a third straight year in 2024, indicating that even with the improving economic outlook, the challenge is far from over.
Meanwhile, executives were less optimistic about their organizations’ ability to withstand major upheavals. According to the study, 45% of respondents were concerned that their businesses would no longer be viable in a decade unless they were reinvented, up from 39% last year.
While the CEOs acknowledge that they are working to bring about changes, they are encountering obstacles such as regulatory requirements, labor skill gaps, and other issues.
This is a year of transformation, according to Bob Moritz, worldwide head of PwC, formerly known as PricewaterhouseCoopers, who made this statement. They are accelerating the adoption of generative AI and expanding their business to handle the opportunities and challenges of the climate transition.
Business operations may be streamlined by artificial intelligence, but it was also perceived as a vulnerability. In the next three years, it will drastically alter how their organization generates, distributes, and captures value, according to nearly three-quarters of the leaders, according to PwC.
The majority of CEOs (more than half) stated that artificial intelligence (AI) will improve their products and services; yet, 69% of them also mentioned that their employees needed training to apply the rapidly advancing technology. They expressed worried about the potential for AI to spread false information and raise cybersecurity threats.
The biggest short-term danger facing the globe, according to Davos organizers, is artificial intelligence (AI)-driven disinformation, such as synthetic material.
Particularly in Western democracies, where people with right-leaning views are far more likely than those on the left to oppose innovation, a global poll conducted around Davos, called the Edelman Trust Barometer by public relations firm Edelman, claims that innovation is being poorly managed and is increasing polarization.
CEO Richard Edelman told on Monday that innovation is only embraced if there is a feeling that we’re looking at the larger picture of how we take care of the people whose occupations are going to change, and how scientists are going to connect to the people directly so they understand it. “And lastly, in a different sense, AI lowers costs and improves people’s quality of life.
Over 32,000 people from 28 nations participated in the online survey, which was conducted from November 3 to November 22. The results once again demonstrated that the business sector is the most trusted institution among the government, media, science, and nonprofit groups.
The PwC poll indicates that, like AI, there are risks and opportunities associated with the climate transition. Over the next three years, a growing percentage of CEOs—nearly a third—say they anticipate changes in their operations due to climate change.
Only 45% of the executives reported that they have made progress in accounting for climate risks in financial planning, despite the fact that over 75% of them stated they have started or finished making improvements to increase energy efficiency.
From October 2 to November 10, 4,702 CEOs in 105 countries and territories participated in the PwC poll.
