An increasing number of executives are expressing optimism about the global economy. However, a growing proportion believe that their companies will need a substantial overhaul in the next decade due to the combined pressures of climate change and advanced technologies like artificial intelligence.
According to a recent survey by PwC, 38% expressed optimism regarding the economic strength, a significant increase from last year's 18% when the world faced challenges like high inflation, weak growth, and rising interest rates.
The CEOs' anticipation of economic decline has decreased to 45%, down from the record-high 73% reported last year. Additionally, fewer executives perceived their companies as highly exposed to the risk of geopolitical conflicts.
This is noteworthy, considering ongoing wars in Ukraine and the Middle East, along with disruptions to global trade from attacks by Yemen's Houthi rebels on commercial ships in the Red Sea.
Despite the improved economic outlook, challenges persist, as noted by the World Bank, which recently projected a third consecutive year of global economic slowdown in 2024.
On the flip side, executives expressed heightened concerns about their companies' resilience to substantial changes. The survey indicates that 45% of respondents were apprehensive about the viability of their businesses in a decade without undergoing significant reinvention, marking an increase from 39% recorded in the previous year.
CEOs acknowledge their efforts to implement changes, but they encounter challenges such as regulatory obstacles and a scarcity of skilled workers. "This is a year of transformation, whether it is accelerating the rollout of generative AI or building their business to address the challenges and opportunities of the climate transition," remarked Bob Moritz, global chairman of PwC (formerly known as PricewaterhouseCoopers).
Artificial intelligence is perceived both as a means to streamline business operations and a potential vulnerability. PwC reported that nearly three-quarters of executives stated, "it will significantly change the way their company creates, delivers, and captures value in the next three years."
Over half of the CEOs surveyed believe that AI will enhance their products or services, yet 69% express concerns about the need for worker training to navigate this evolving technology.
Worries extend to heightened cybersecurity risks and misinformation with the proliferation of AI. Amidst the Davos gathering, organisers cautioned against the threat posed by AI-powered misinformation, branding it as the world's most significant short-term peril.
PwC conducted the survey of over 4,700 CEOs globally on Monday during the World Economic Forum's annual meeting in Davos, Switzerland. The survey presented a varied perspective on what might happen in the upcoming years, attracting attention from business leaders, politicians, and activists gathered at the event.