Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Regulation and Compliance > State Regulation

The 3 Things CEOs Are Most Concerned About

Your article was successfully shared with the contacts you provided.

As executives gather in Davos, the mood may not be a cheery as it has been in the past decade. While over-regulation still remains a top concern for the C-suite, according to PwC’s 23rd annual survey of CEOs, trade conflicts, uncertain economic growth and cybersecurity have risen to the top of the list as well.

Fifty-three percent of global CEOs, the most in a decade, stated they believed global growth would decline over the next 12 months, according to the report, Navigating the Rising Tide of Uncertainty. Only 22% said it would improve. In the United States, the viewpoint is even gloomier, with 62% seeing a decline while only 9% predicting an improvement.

Despite this predicted downturn, many U.S. CEOs see revenue growth for their own firms not declining as fast, and are more likely to be “very confident” in near-term revenue growth than peers globally (36% vs. 27%). However, this viewpoint has dropped dramatically since 2018, when 52% were “very confident” of revenue growth, versus 42% globally. As the survey noted, the confidence level hasn’t been this low since 2009.

PWC also stated that more than half of U.S. CEOs would rely on mergers and acquisitions for growth, while that number dropped to 35% globally. Further, 83% of U.S. CEOs are “doubling down on operational efficiencies,” relying on artificial intelligence and cloud-enabled tech services for growth, while fewer said they were relying on new products and services to drive growth. More specifically, the report states that artificial intelligence, blockchain, “Internet of Things,” virtual reality, 3D printing and combinations of these are viewed as cost-cutting and revenue-generating opportunities.

“On the global level, tensions between the great powers have created uncertainty,” Felipe Bayón, CEO, Ecopetrol in Colombia, told PWC. “These are geopolitical issues too. Some would say we are in a ‘deceleration trend,’ especially in terms of demand, which hits us directly. What does it mean? That we must be efficient in order to grow.”

However, the downside of this is 53% are “extremely concerned” about the effects of cyberthreats to growth prospects. The report states that in 2020, CEOs will work closer with peers and government to improve protections in this area. Looking beyond 2020, 66% of CEOs in North America believe that government legislation will splinter the internet relating to content, commerce and privacy.

John Hennessy, chairman of Alphabet US, told PWC he saw some “tone deafness” from the tech industry, which originally developed in an effort to aid industry. “Now we build products that everybody uses and that affects their lives every single day,” he said. “That comes with a whole new set of responsibilities. And whether it’s privacy, cybersecurity, dealing with hate speech and walled gardens … we’re not where we need to be,” he said.

Trade’s Global War

Trade wars also were foremost in CEOs’ minds, with 50% of U.S. CEOs “extremely concerned” about trade conflicts and adjusting supply chains and sourcing, according to the report. Some trends to watch include continued trade diversification strategies and increased gathering of data about cross-border activities. In addition, 63% of CEOs stated they looked to shape trade policy planning and increase lobbying efforts and budget.

Also, like advisors, CEOs were concerned about the labor market. The survey found a dramatic increase in job automation expectations, especially for lower and mid-education jobs.

Familiar to the advisory business, finding talent also is a concern, especially as global unemployment has dropped. Further, especially in the North America, there was increasing concern of reduced mobility of skilled labor. And the aging of the workforce is very much a global issue, with 18% of the OECD population to be over 65 years old in 2020.

“We’re making the human-machine interface more fluid and intuitive, because our current approach can’t continue,” Barbara Humpton, CEO of Siemens US, told PWC. “We have more than 1,500 open job requisitions in the U.S. alone, and sometimes 100 applications for every opening. But we don’t have nearly enough qualified applicants to hire because of the technical knowledge required. So we’re going to be training a lot of non-engineers to jobs engineers would have done in the past.”

Finally, the share of CEOs who see the benefits of investing in climate change initiatives has grown to 30% in 2020 from 16% in 2010. China was the key country (47% versus 25% globally and 15% in the U.S.) that saw climate change initiatives leading to significant new products and services for their organizations.

The PwC survey of 3,501 CEOs in 83 territories was conducted in September and October 2019, with a sample size of 1,581 weighted according to national GDP. Most surveys were conducted online, with 7% by phone and 5% in person.

Related on ThinkAdvisor:


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.