Evolve or dissolve: Economic reality check for Canadian CEOs

Upskilling is key to ensure a long-term success

• 62% of Canadian CEOs believe that global economic growth will decline or stay the same.
• 84% of Canadian CEOs agree AI will significantly change their business within the next five years
• 88% of Canadian CEOs say they’re concerned about the availability of important skills in their industry—up from 51% in 2018.

(Toronto, February 13, 2019) - According to the Canadian results of PwC’s Global CEO Survey, 62% of Canadian CEOs (vs. 57% globally) say global economic growth will decline or stay the same. While they are less optimistic about the global economy and their growth prospects compared to last year, this is a prime opportunity to focus on transforming how they work including upskilling. The results of the survey also focus on technologies like data analytics and artificial intelligence to meet rapidly evolving customer needs.

Economic reality

Shifting geopolitics, trade uncertainties and increasing protectionism require business leaders to adjust their approach in the search to uncover growth in 2019 and beyond, according to the survey. Only 60% of Canadian CEOs, compared to 88% in 2018, see the United States as the most important market for growth. When asked to identify the most attractive foreign markets for investment, Canadian CEOs are looking further afield and expressing more uncertainty. Canadian interest in any market outside Canada has remained flat or declined with the exception of Mexico, which increased to 12% from 7% in 2018.

Globally, CEOs surveyed also indicated they’re less interested in China and the US as key prospects for growth. For instance, global interest in China as an important source of growth has dropped from 33% to 24% year over year, while global interest in the US has dropped from 46% to 27%.

“As Canadian CEOs increasingly look inward for growth opportunities against a tough global economic backdrop, the pressure to transform their businesses has never been greater,” says Nicolas Marcoux, CEO and Senior Partner, PwC Canada. “The shift away from China and the US creates a golden opportunity for Canadian businesses and governments to collaborate in order to enhance our country’s attractiveness for investment. Coming together to get upskilling right is a key step in a multi-pronged approach to help us secure a greater piece of the global economic pie — for the benefit of all Canadians.”

Amid protectionism and trade concerns, Canadian CEOs are looking inward for growth opportunities. Most of them (88% vs 77% globally) will look at introducing more operational efficiencies; a large proportion of Canadian CEOs (84% vs 71% globally) will focus on organic growth and a little more than half (59% vs 37% globally) are focused on new M&A activity.

Data & analytics – Lingering information gap

This year’s survey took a deep dive into data and analytics as well as artificial intelligence (AI), two key areas on leaders’ radar. According to the survey, Canadian CEOs see data and analytics as a critical component for growth, especially to anticipate customer behaviours and enhance buyer-facing interactions.

There’s no doubt that organizations that close their data skills gap and leverage the power of AI will create a competitive advantage. Most respondents (84%) agree that AI will significantly transform their business within the next five years. However, 88% say they’re concerned about the availability of important skills in their industry—up from 51% in 2018. Less than half say that AI is present in their organization to some extent, and of those, only 34% describe using AI in limited, specific initiatives.

But Canadian CEOs also anticipate AI will disrupt the job market along with their business. In fact, the availability of key skills is the single-biggest concern in this year’s survey, with 47% agreeing AI will displace more jobs than it creates in the long run.

Upskilling will transform the way we work

Canadian CEOs suggest strong pipelines from educational institutions are the best way of closing a potential skills gap. But globally, CEOs take a different view.

Nearly half (46%) of CEOs surveyed worldwide believe upskilling is the best way to make sure they have the right people for the jobs of the future. Alarmingly, the survey indicates that 41% of Canadian CEOs have yet to adopt this stance as strongly, putting an emphasis instead on establishing a strong pipeline direct from education, with only 16% focused on upskilling.

“As business leaders, we simply can’t sit on the sidelines and wait for our business schools, colleges and universities to deliver graduates with the in-demand skills of the future,” adds Marcoux. “Closing the talent gap to make sure we have the skill sets needed to create value will be critical to Canada’s success.”

Closing the skills gap goes beyond  harnessing the power of AI. More than half of Canadian CEOs say not having access to the right talent is preventing them from stimulating innovation, delivering new value and impacting quality standards as well as customer experience.

Click here to access the Canadian findings of the Global CEO Survey.