A strong business outlook means it’s time to invest in people and in digital: Findings from PwC’s 2018 CEO Survey
The global economy is strong. Business leaders have told us as much for PwC’s 2018 CEO Survey. Much of the worry from previous years about slow business growth and economic volatility have eased. Of course, there are new concerns, but CEOs are confident that 2018 holds tremendous opportunities for business.
For American companies, this year is not just a chance for greater profit but a year to strengthen and invest for the future.
Today, we released our 21st Annual CEO Survey at the World Economic Forum in Davos, Switzerland. We interviewed 1,293 CEOs from 85 countries (104 from the US) about what they are optimistic about and what keeps them up at night.
This year, US CEOs are much more certain about the global economy. In fact, for the first time since the 2008 financial crisis, a majority (52%) of US CEOs say they are very confident about their business growth. Compare this to five years ago when economic uncertainty was their biggest concern or even just last year when only 39% were very confident about growth.
Indeed, CEOs in the United States and around the world believe the global recovery has fully taken hold. Macroeconomic indicators are strong across most G-20 economies — particularly in the US, where unemployment is at an all-time low in 17 years and where the stock market is at an all-time high. So it’s no surprise that the United States is the number one, “must-win” market for business according to the CEOs we surveyed — ahead of China, Germany, India, and the United Kingdom.
Even though global economic volatility is no longer keeping CEOs up at night, they can’t get complacent. If anything, they should take this opportunity, when growth prospects are good, to shore up other parts of their business that may be lagging behind. For example, US CEOs now rank cyber threats (63%), over-regulation (55%), terrorism (50%), and geopolitical uncertainty (50%) as their top concerns for 2018. And while CEOs can’t control over-regulation, terrorism, or geopolitical uncertainty, they certainly can put in place the safety protocols to protect against online hacks and cyberattacks.
And while most CEOs today have an ever-present fear of a potential cyber attack, they are also worried about being left behind by the rapid pace of advancements in artificial intelligence (AI), autonomous transportation, and other areas where jumps in technology can give the competitive edge to new and more agile competitors.
From AI to machine learning to data analytics, there’s a lot at stake when it comes to how technology is disrupting industries and the workforce. But in an environment where global growth prospects are strong, CEOs that take this opportunity and have the foresight to embrace digital transformation will be greatly rewarded.
It’s important to keep in mind, however, that digital transformation can be particularly unsettling for employees who often think immediately about the impact on their jobs. So while the PwC survey tells us that a third of US CEOs are extremely concerned that today’s workforce doesn’t have the right set of skills, it also finds that only about half of US CEOs believe it’s their responsibility to retrain employees whose tasks and jobs are automated by technology. This is in stark contrast to what CEOs from other advanced manufacturing economies think. According to our survey, 71% of CEOs in Japan, 84% of CEOs in China, and 85% of CEOs in Germany believe that they have a responsibility to retrain workers.
I believe that this is one of the most important actions for a CEO to take — to ensure their employees have the necessary digital skills for the jobs of today and tomorrow. By investing in our employees and fostering trust, CEOs can build a more skilled and inspired workforce that will ultimately be more innovative, agile, and responsive to business needs. And by helping the workforce adjust to the digital transformation with upskilling, we meet our responsibility to build better companies and support our people.
We are currently in an unprecedented time of opportunity and awareness. It is our job as leaders to build companies that are fundamentally strong businesses that support our employees, and embrace the challenges of our global economy. Business is very good today — let’s ensure we embrace the opportunity to build an even better tomorrow.