PWC in 2023 reported that nearly 40% of global CEOs believed their companies would no longer be viable in ten years’ time if they continued on their current path.
This year’s Global CEO Survey, the 27th PWC conducted, suggests that the vast majority of companies are already taking some steps towards reinvention. Yet even as CEOs attempt meaningful changes to their companies’ business models, they are even more concerned about their long-term viability, says the consultant.
The proportion of CEOs, despite being split on future viability, believed that global economic growth will improve over the next 12-months.
That proportion has more than doubled year-on-year.
At the same time the proportion of CEOs concerned about their long-term business viability has risen to 45% as tech and climate pressures continue to rise.
PwC's 27th Annual Global CEO Survey was published on Tuesday.
Almost half (45%) of the CEOs interviewed said they did not believe their current business will be viable in a decade if it continues on its current path -- up from 39% in 2023.
Notably, the survey shows smaller companies are at greater risk: 56% of CEOs leading businesses generating less than $100 million in annual revenue believe their businesses will only be viable for 10 years or less if it continues running on its current path.
This falls to 27% for those making $25 billion or more in revenue annually.
Reflecting uncertainty about how they will manage megatrends, CEOs are somewhat less confident than last year in their own company’s prospects for revenue growth over the next 12 months – down from 42% to 37%.
Bob Moritz, global chair at PwC, said: “As business leaders are becoming less concerned about macroeconomic challenges, they are becoming more focused on disruptive forces within their industries. Despite rising optimism about the global economy, they are actually less optimistic than last year about their own revenue prospects, and more acutely aware of the need for fundamental reinvention of their business. Whether it is accelerating the roll-out of generative AI or building their business to address the challenges and opportunities of the climate transition, this is a year of transformation.”
Repost stated that CEOs anticipate many positive near-term business impacts from generative AI.
At a societal level, the effects of generative AI are still uncertain. Some of those efficiency benefits appear likely to come via employee headcount reduction -- at least in the short term -- with one-quarter of CEOs expecting to reduce headcount by at least 5% in 2024 due to generative AI.
Companies making early reductions to capture efficiencies in some areas may already be offsetting them with hiring in others, as growth and revenue opportunities become clearer.
For example, although 14% of technology CEOs anticipated reducing headcount in the next year due to generative AI, 56% of them also anticipate hiring in 2024 -- at a rate almost 20 percentage points higher than the global average in our survey.
Overall, 39% of CEOs expect their company’s headcount to increase by 5% or more in the coming 12 months.
Optimism despite fears
The survey, which interviewed 4,702 CEOs across 105 countries and territories, found that 38% of CEOs are optimistic about global economic growth prospects over the next 12-months, up from18% in 2023.
CEO expectations of economic decline have also tumbled from a record high in last year's survey (73%) to 45%, as perceived exposure to inflation and macroeconomic volatility fell by16 percentage points (to 24%) and 7 percentage points (to 24%) respectively.
Despite ongoing conflicts, the proportion of CEOs who felt their company is highly or extremely exposed to geopolitical conflict risk fell 7 percentage points (to 18%).
CEOs in most regions of the world are also more likely to be optimistic about domestic economic prospects than pessimistic.
They are also optimistic about the short-term impact. Over the next 12 months, almost three-fifths (58%) expect it to improve the quality of their products or services and almost half (48%) say it will enhance their ability to build trust with stakeholders.
They also expect better outcomes for their business - 41% expect it to positively impact revenue and 46% expect it to positively impact profitability.
According to the report, the technology, media and communications sector is most positive about the impact on profit (54%), while energy, utilities and resources are least optimistic (36%).
