PwC’s 27th Annual Global CEO Survey: Navigating Change through Continuous Reinvention

Jakarta, 29 January 2024 – PwC’s “27th Annual Global CEO Survey” suggests that the vast majority of CEOs globally and in Asia Pacific including Indonesia, are already taking some steps toward business reinvention. In 2023, there was significant divergence around what CEOs think in terms of optimism and pessimism, both at global and regional levels. This year’s survey showed that CEOs share the same sentiment as last year, anticipating global economic growth in the next 12 months - global (38%), Asia Pacific (40%), and Indonesia (32%).

According to this year's CEO Survey, the great majority of businesses in Indonesia (93%) and Asia Pacific (97%) are already making some effort towards reinvention. Yet, even as CEOs attempt meaningful changes to their companies’ business models, 56% of Indonesian and 63% of Asia Pacific CEOs remain uncertain about their company's viability in the next decade if they continue their current path. CEOs globally (24%), in Asia Pacific (21%) and in Indonesia (23%) named macroeconomic volatility as their top threat, followed by inflation and geopolitical tensions (all three groups showed similar percentages in these categories).

The majority of Indonesian CEOs agree that the regulatory environment ranks as the top obstacle, similar to Asia Pacific (66%), with 75% stating it as such. Technological capabilities (63%), on the other hand, rank second among obstacles faced by Indonesian CEOs and are followed by two reasons categorised as third: a lack of skilled labour and competing operational priorities, which account for 61% of the barriers. Regulatory environment was placed first, since many CEOs believe that they have no power to control it, in comparison to other barriers that they can influence.

Raymund Chao, PwC Asia Pacific and China Chairman, commented: “Our CEO survey this year serves as an urgent and powerful call for intensified action towards business reinvention. Persistent geopolitical conflicts and inflationary worries, among other challenges, have really dug in, amplifying the risks and constraining growth in Asia Pacific. Simultaneously, global megatrends including technological shifts - exemplified by the rise of GenAI - and climate-related issues are increasingly demanding CEOs’ attention. In a constantly evolving market, businesses must embrace a culture of continuous innovation to not only sustain their competitive edge, but also ensure long-term viability.”

Catching up with global megatrends: climate change and technological disruption (GenAI)

As with Asia Pacific CEOs, Indonesia-based CEOs are also aware that they need to address global megatrends including climate change and technological disruption which are poised to compel further reinvention.

Our report highlights that Indonesia-based CEOs have taken steps, with notable advancement. We discovered that Indonesian CEOs had started working to improve energy efficiency (73%) and to develop new climate-friendly products (68%). Compared with the region, 63% and 48% are actively enhancing energy efficiency and introducing climate-friendly innovations, respectively.

Regarding decarbonisation efforts, more than half of Indonesian CEOs choose regulatory complexity as the top constraint (56%), followed by a lack of climate-friendly technologies (48%) and a lack of demand from external shareholders (45%). Similarly, Asia Pacific CEOs cite regulatory complexity (63%) and lower economic returns for climate friendly investments (61%) as the biggest barriers to be overcome.

The majority of CEOs see Generative AI as a catalyst for reinvention that will power efficiency, innovation and transformational change. Over two-thirds of Indonesia-based CEOs foresee substantial impacts of GenAI on their companies, workforce and markets within the next three years. However, 53% of CEOs admit to not having adopted GenAI across their companies in the past 12 months (vs. 41% in Asia Pacific).

Eddy Rintis, PwC Indonesia Territory Senior Partner, stated, “In the past 12 months, half of the Indonesian CEOs (53%) report that their organisations have not yet implemented GenAI. But, over the course of the upcoming year, about half of Indonesian CEOs expect GenAI to enhance their ability to build trust with stakeholders (57%) and to improve product or service quality (56%). Nearly seven out of ten respondents believe that within the next three years, GenAI will raise competitiveness (76%), drive changes to their business models (72%), and require new skills from their workforce (69%).”