PwC 2024 Global CEO Survey

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 45 per cent as tech and climate pressures accelerate, according to PwC’s 27th Annual Global CEO Survey.

The survey, which interviewed 4,702 CEOs across 105 countries including Ghana, found that 38 per cent of CEOs are optimistic about global economic growth prospects over the next 12-months, up from 18 per cent in 2023.

CEO expectations of economic decline have also tumbled from a record high in last year’s survey (73%) to 45 per cent, as perceived exposure to inflation and macroeconomic volatility fell by 16 percentage points (to 24%) and seven percentage points (to 24%) respectively. 

Despite ongoing conflicts, the proportion of CEOs who felt their company is highly or extremely exposed to geopolitical conflict risk fell seven percentage points (to 18%).

CEOs in most regions of the world are also more likely to be optimistic about domestic economic prospects than pessimistic. 

However, CEOs in territories such as North America and Western Europe buck the trend - in Western Europe, 32 per cent expect their domestic economies to improve, 48 per cent decline; North America, 31 per cent and 52 per cent, respectively.

In Ghana, CEOs were divided between those optimistic about the local economy’s prospects and those who held a pessimistic view.

CEOs are more likely to plan to increase than decrease their headcount in the next 12-months, with 39 per cent reporting that they expect to increase their headcount by five per cent or more.

Employers in every region are more likely to increase than decrease headcount, with the Middle East the most bullish on hiring (65%). 

In Ghana, 48 per cent of CEOs surveyed expressed plans to augment their companies workforce by five per cent or more in the coming 12 months.

Meanwhile, 23 per cent disclosed intentions to decrease their headcount by five per cent or more, while 29 per cent anticipated no change in their staff numbers.

While the trajectory is positive, confidence is fragile as megatrends including technological disruption – exemplified by generative AI – and the climate transition converge.

Almost half (45%) 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 39% 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 42 per cent to 37 per cent.

The AI opportunity

CEOs overwhelmingly see generative AI as a catalyst for reinvention that will power efficiency, innovation, and transformational change.

Nearly three-quarters (70%) 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, almost three-fifths (58%) expect it to improve the quality of their products or services and almost half (48%) say it will enhance their ability to build trust with stakeholders. 

They also expect better outcomes for their business - 41 per cent expect it to positively impact revenue and 46 per cent expect it to positively impact profitability.

The technology, media and communications sector is most positive about the impact on profit (54%), while energy, utilities and resources are least optimistic (36%).

But while CEOs are increasingly looking to the transformative benefits of generative AI, the great majority say it will require workforce upskilling (69%).

They have also expressed concern about an associated rise in cybersecurity risk (64%), misinformation (52%), legal liabilities and reputation risks (46%), and bias towards specific groups of customers or employees (34%) 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.

Nearly one-third expect climate change to shift the way they create, deliver, and capture value over the next three years - up from less than one-quarter who said as much regarding the past 5 years.

CEOs are making progress in turning their commitments into action.

Seventy-six per cent have either begun or completed steps to improve energy efficiency, while 58 per cent report having made similar strides when it comes to innovating new, climatefriendly products, services or technologies.

On the other hand, only 45 per cent note having made progress on or completed incorporating climate risk into financial planning (with 31 per cent noting no plans to do so).

 Action on adaptation to physical climate risks is also lagging at 47 per cent (with 29 per cent noting no plans to act).

 The survey suggests significant support for decarbonisation, with only 26 per cent saying that a lack of board or management buy-in is at least a moderate barrier to decarbonisation.

Instead, CEOs cite regulatory complexity (54%) and lower economic returns for climate friendly investments (51%) as the biggest barriers to be overcome.

CEOs are beginning to take on the economic barrier, with four in ten reporting that they have accepted lower hurdle rates for climate-friendly investments than for other investments—in the majority of cases between one and four percentage points lower.

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.

Almost half (45%) note they are concerned their businesses will not be viable beyond the next decade without reinvention - up from 39 per cent in 2023.

Notably, the survey shows smaller companies are at greater risk: 56 per cent of CEOs leading businesses generating less than US$100 million in annual revenue believe their businesses will only be viable for 10 years or less if it continues running on its current path.

This falls to 27 per cent for those making US$25 billion or more in revenue annually.

Almost all (97%) CEOs note they have taken steps to change how they create, deliver, and capture value in the past five years, and over three-quarters (76%) have taken at least one action that had a large or very large impact on their company’s business model.

But while CEOs are taking action, they are faced with a number of challenges.

Two thirds (64%) cite the regulatory environment as inhibiting their ability to reinvent their business model to at least a moderate extent, 55 per cent point to competing operational concerns, and 52 per cent point to a lack of skills in their company’s workforce.

A further obstacle is inefficiency.

CEOs perceive significant inefficiencies across a range of their companies’ routine activities—everything from decision-making meetings to emails—viewing roughly 40 per cent of the time spent on these tasks as inefficient.

 A conservative PwC estimate of the cost of that inefficiency would be tantamount to a self-imposed US$10 trillion tax on productivity.

The survey results reflect an awareness among CEOs that they are navigating critical strategic inflection points, and feel a sense of urgency and a bias towards action.

The data also suggest there’s a growing premium on leadership effectiveness to maintain energy, challenge the status quo and increase momentum.

For example, CEOs may need to expand their executive teams to include experts in emerging areas that are critical for their company’s future success, such as climate regulation or AI.

Also crucial: having the whole top team own the change—as well as their systems of governance and control—rather than putting functional or business unit leaders in charge of discrete initiatives.

In addition, many organisations will need to take account of the fact that the answers to a great many questions don’t exist, and new mechanisms will be necessary for solving problems together—rather than presenting solutions and seeking approval—as well as for new ways of tracking progress and rewarding people.

CEOs who are serious about reinvention must find approaches for acknowledging concerns, prizing curiosity and openness to learning, and encouraging managers to help people adapt.

Some of these leadership imperatives may sound familiar, but all of them raise expectations of CEOs to lead the voyage of strategic discovery necessary to evolve longstanding approaches to value creation.

As we enter an age of continuous reinvention, CEOs have unparalleled opportunities to reshape their organisations, and themselves, to thrive on disruption, and transform aspirations into realities.

The writer is a Partner at PwC Ghana
richard.ansong@pwc.com