Thriving in an age of continuous reinvention

The proportion of CEOs who believe global economic growth will improve over the next 12-months has more than doubled year-on-year. At the same time the proportion of CEOs concerned about their long-term business viability has risen to 55% as tech and climate pressures accelerate, according to PwC’s 27th Annual Global CEO Survey.

The survey of 31 CEOs in Kosovo, found that 45% of CEOs are optimistic about global economic growth prospects over the next 12-months, up from 28% in 2023. CEO expectations of economic decline have also tumbled from a record high in last year’s survey (63%) to 29%, as perceived exposure to inflation and macroeconomic volatility fell by 24 percentage points (to 6%) and 13 percentage points (to 10%) respectively.  Despite ongoing conflicts, the proportion of CEOs who felt their company is highly or extremely exposed to geopolitical conflict risk fell 15 percentage points (to 13%).

CEOs in most regions of the world are also more likely to be optimistic about domestic economic prospects than pessimistic. CEOs in Kosovo are generally  as optimistic as them, 42% expect their domestic economies to improve, 29% decline; Global, 44% and 37%, respectively.

CEOs are more likely to plan to increase than decrease their headcount in the next 12-months, with 55% 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. More than half (55%) 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 45% 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 – down from 50% to 35%.

The AI opportunity

CEOs overwhelmingly see generative AI as a catalyst for reinvention that will power efficiency, innovation, and transformational change. Just about half (52%) believe it will significantly change the way their company creates, delivers, and captures value in the next three years.

CEOs are also optimistic about the short-term impact. Over the next 12 months,about one third (35%) expect it to improve the quality of their products or services and almost a quarter (23%) say it will enhance their ability to build trust with stakeholders. They also expect better outcomes for their business - 35% expect it to positively impact revenue and 39% 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 (48%). They have also expressed concern about an associated rise in cybersecurity risk (45%), misinformation (32%), legal liabilities and reputation risks (19%), and bias towards specific groups of customers or employees (19%) 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. 10% expect climate change to shift the way they create, deliver, and capture value over the next three years - up from 6% who said as much regarding the past 5 years.

On the other hand, only 36% note having made progress on or completed incorporating climate risk into financial planning (with 39% noting no plans to do so). Action on adaptation to physical climate risks is also lagging at 32% (with 32% noting no plans to act).

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. More than half (55%) note they are concerned their businesses will not be viable beyond the next decade without reinvention - up from 45% in 2023. 

But while CEOs are taking action, they are faced with a number of challenges. 61% cite the regulatory environment as inhibiting their ability to reinvent their business model to at least a moderate extent, 36% point to competing operational concerns, and 42% point to a lack of skills in their company’s workforce.

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