Thriving in an age of continuous reinvention

The proportion of CEOs who believe global economic growth will improve over the next 12-months has increased year-on-year. At the same time the proportion of CEOs concerned about their long-term business viability has risen to 44% as tech and climate pressures accelerate, according to PwC’s 27th Annual Global CEO Survey - Albania Findings.

The survey of 35 Albanian CEOs, found that 38% of CEOs are optimistic about global economic growth prospects over the next 12-months, up from 24% in 2023. CEO expectations of economic decline have also tumbled from a record high in last year’s survey (73%) to 32%, as perceived exposure to inflation fell by 20 percentage points (to 29%) and macroeconomic volatility up 6 percentage points (to 35%) respectively.  Despite ongoing conflicts, the proportion of CEOs who felt their company is highly or extremely exposed to geopolitical conflict risk increased 1 percentage point (to 21%).

CEOs in most regions of the world are also more likely to be optimistic about domestic economic prospects than pessimistic. Albanian CEOs also remain optimistic, 62% expect their domestic economies to improve, 18% decline; Global, 44% and 37%, respectively.

CEOs are more likely to plan to increase than decrease their headcount in the next 12-months, with 15% reporting that they expect to increase their headcount by 5% or more. 

While the trajectory is positive, confidence is fragile as megatrends including technological disruption – exemplified by generative AI – and the climate transition converge. Almost half (44%) of CEOs say they do not believe their current business will be viable in a decade if it continues on its current path – up from 39% in 2023. 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 – up from 22% to 38%.

The AI opportunity

CEOs overwhelmingly see generative AI as a catalyst for reinvention that will power efficiency, innovation, and transformational change. Nearly half (50%) believe it will significantly change the way their company creates, delivers, and captures value in the next three years.

CEOs are also not as optimistic about the short-term impact. Over the next 12 months, only one-third (32%) expect it to improve the quality of their products or services and 24% say it will enhance their ability to build trust with stakeholders. Some also expect better outcomes for their business - 15% expect it to positively impact revenue and 26% expect it to positively impact profitability. 

But while CEOs are increasingly looking to the transformative benefits of generative AI, the great majority say it will require workforce upskilling (50%). They have also expressed concern about an associated rise in cybersecurity risk (53%), misinformation (41%), legal liabilities and reputation risks (29%), and bias towards specific groups of customers or employees (24%) in their companies.

CEOs report progress on climate priorities

As CEOs establish priorities, many are seeing the climate transition as an industry disruptor containing distinct opportunities in addition to risks. Nearly 20% of CEOs on a local level expect climate change to shift the way they create, deliver, and capture value over the next three years - the same as that regarding the past 5 years.

CEOs are making progress in turning their commitments into action. 68% have either begun or completed steps to improve energy efficiency, while 62% report having made similar strides when it comes to innovating new, climate-friendly products, services or technologies.

On the other hand, only 50% note having made progress on or completed incorporating climate risk into financial planning (with 24% noting no plans to do so). Action on adaptation to physical climate risks is also lagging at 44% (with 24% noting no plans to act).

CEOs are beginning to take on the economic barrier, with three in ten reporting that they have accepted lower hurdle rates for climate-friendly investments than for other investments—in the majority of cases between one and four percentage points lower.

The reinvention imperative

As CEOs become more aware of the megatrends facing businesses globally, survey respondents expressed increased concern around their long-term business viability. Almost half (44%) note they are concerned their businesses will not be viable beyond the next decade without reinvention - up from 39% in 2023. 

But while CEOs are taking action, they are faced with a number of challenges. 58% cite the regulatory environment as inhibiting their ability to reinvent their business model to at least a moderate extent, 44% point to competing operational concerns, and 41% point to a lack of skills in their company’s workforce.

A further obstacle is inefficiency. CEOs perceive significant inefficiencies across a range of their companies’ routine activities—everything from decision-making meetings to emails—viewing roughly 36% of the time spent on these tasks as inefficient. 

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