Davos’ 2023 Global CEO outlook: Strategic and profitability challenges ahead
PwC’s 26th Annual CEO Survey conducted through 4,410 Chief Executive Officers (CEOs) in 105 countries las October and November of 2022. was released along the 2023 Davos meeting organized by the World Economic Forum. Most of those CEOs feel it’s critically important for them to reinvent their businesses for the future however they are not spending enough time to that priority. In the short term 73% of CEOs expect economic growth to decline in the next 12 months.
Main takeaways of the report:
- 40% of global CEOs think their organisation will no longer be economically viable in ten years’ time, if it continues on its current course. The pattern is consistent across a range of economic sectors, including technology (41%), telecommunications (46%), healthcare (42%) and manufacturing (43%). By geographies CEOs in the United States were the most optimistic while those from Japan and China the most pessimistic about the long-term viability of their business models.
- CEOs sees multiple challenges to their industry´s profitability in the short and long term:
- CEOs are extremely pessimistic about global economic growth for the year ahead, in a dramatic shift from last year’s optimistic outlook. 73% of CEOs expect economic growth to decline in the next 12 months. CEOs in many major economies are more optimistic about the near-term growth prospects of their own countries than the global economy.
- CEOs are cutting costs, but not people: Interestingly, although 52% of CEOs say they have already begun cutting costs, just 19% are implementing hiring freezes, and 16% are reducing the size of their workforce. CEOs aren’t laying people off, in part, because of their recent experience with employee attrition.
- A majority of global CEOs expect some degree of impact from climate change in the next 12 months—primarily in their cost profiles (where approximately 50% expect a moderate, large or very large impact) and their supply chains (42%). Fewer (24%) are worried about climate-related damage to their physical assets.
- Profitability impacts over the next ten years: about half or more of surveyed CEOs cited changing customer preferences (56%), regulatory change (53%), skills shortages (52%) and technology disruption (49%) as the main forces impacting their industry’s profitability. Roughly 40% flagged the transition to new energy sources and supply chain disruption. And nearly one-third pointed to the potential for new entrants from adjacent industries.
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