Rapid technological advances and shifts in economic power towards emerging markets will open up significant opportunities for international businesses, consultancy firm PwC asserted in its 17th annual global CEO survey. The results of the survey also indicated that while a growing proportion of CEOs believe that the global economy will improve this year many question whether the recovery will be long term. The survey included responses from 1300 CEOs based in 68 countries.
Although the number of CEOs who believe that the global economy will improve over the next 12 months has doubled to 44%, compared to PwC’s 2013 survey – with 39% of CEOs remaining 'very confident' that their company's revenues will grow in 2014 – PwC said that this optimism remained “fragile” thanks to excessive regulations by governments, anemic growth in advanced economies and the slowing performance of emerging markets. The main areas of concern for surveyed CEOs included over regulation, which was cited by 72% of respondents, and the growing budget deficits in some countries, which were cited by 71% of respondents.
The survey showed that CEOs remain uncertain whether greater global growth will translate into improved business performance, and also that growth is increasingly being led by advanced economies which appear to be improving. The US economy has grown by 4% since 2007, and Japan’s GDP performance has also improved substantially, although this was from a relatively low base.
The performance of the BRICS – Brazil, Russia, India China and South Africa – has been mixed. While China’s slowing performance is still robust – with its vast foreign exchange reserves and extensive reform measures introduced by the central government doing much to improve the country’s outlook – Brazil’s growth has been weighed down by its large debt burden. Despite implementing several measures to open its economy to foreign investors, the Indian government’s efforts were not perceived to be far-reaching enough. Russia remains unduly exposed to external shocks due to its reliance on commodity exports and South Africa’s growth continues to be impeded by heavy regulation.
As a result, the US, Germany and the UK were highlighted by respondents as more attractive than some of the BRICS, and several leaders affirmed that the BRICS’ lagging performance has led them to review their overseas investments.
Social, mobile, analytic and cloud technologies were identified as offering numerous business opportunities, with 90% of CEOs reporting that they were adjusting their technology investments and 88% maintaining that they were exploring better ways of using and managing big data. But, many CEOs were unsure about which forms of technologies would bring better results.
CEOs distinguished between breakthrough innovative technologies, putting disciplined innovation techniques in place, and collaborating much more actively on technologies, but many leaders were still unsure which technological strategies to focus on when developing their firms’ technological and digital presence.