CEOs Express Optimism in the Global Economy, Yet Fear for Companies' Survival Amid AI and Climate Pressures
The PwC survey highlights mixed sentiments among business leaders at Davos. As global leaders gather at the World Economic Forum's annual meeting in Davos, Switzerland, a new survey by PwC reveals a complex outlook for CEOs worldwide. The survey of more than 4,700 CEOs reflects a surge in optimism regarding the global economy. Still, a growing number express concerns about their companies' ability to survive the next decade, primarily due to pressures from technology, including artificial intelligence (AI) and climate change.
Optimism in the Global Economy on the Rise
According to the PwC Global CEO Survey, 38% of executives are optimistic about the strength of the global economy, a notable increase from 18% last year. The expectation of economic decline has also decreased, dropping to 45% from a record-high 73% in the previous year. Despite ongoing geopolitical conflicts, such as the wars in Ukraine and the Middle East, fewer CEOs perceive their companies as highly exposed to the risks of geopolitical conflict.
However, the improved economic outlook only sometimes translates to confidence in companies' long-term survival.
Concerns about Companies' Viability
The survey indicates a growing unease among CEOs regarding the future viability of their businesses. A notable 45% of respondents express worries that their companies will only be viable in a decade with a significant overhaul, up from 39% the previous year. The CEOs cited challenges such as regulation, a shortage of skills among workers, and other obstacles that hinder their ability to navigate transformative changes.
Bob Moritz, Global Chairman of PwC, emphasises the need for transformation, stating, "Whether it is accelerating the rollout of generative AI or building their business to address the challenges and opportunities of the climate transition, this is a year of transformation."
AI: A Double-Edged Sword
AI emerges as a focal point in the survey, viewed as a tool to streamline business operations and a source of concern. Nearly 75% of CEOs believe AI will significantly change how their companies create, deliver, and capture value in the next three years. While over half see AI as improving products or services, 69% express the need for worker training to harness AI's potential fully.
Executives are also wary of AI's impact on cybersecurity risks and the spread of misinformation. The World Economic Forum has recently identified AI-powered misinformation as a significant short-term threat.
Climate Transition as Opportunity and Risk
Like AI, the survey underscores the duality of views on the climate transition. Nearly a third of CEOs acknowledge that climate change will impact how they conduct business in the next three years. While over 75% claim to have initiated or completed changes to increase energy efficiency, only 45% report progress in incorporating climate risks into financial planning.
The survey indicates that CEOs recognise the transformative potential of AI and climate initiatives but are grappling with the challenges and uncertainties associated with their implementation.
As discussions unfold at Davos, these survey findings underscore the delicate balance CEOs must strike to navigate the evolving landscape of technology and climate concerns, ensuring both short-term economic resilience and long-term sustainability and viability for their companies.