The findings show that while business leaders are more positive in their outlook, their levels of concern about economic uncertainty (82%), over-regulation (80%), availability of key skills (77%) remain very high. Also worries about protectionism are growing, with 59% of CEO concerned about protectionism, increasing to 64% for CEOs in the United States and Mexico.

 

While positive on the benefits of globalization in building the free movement of capital, goods, and people, CEOs question whether globalization has done anything to close the gap between rich and poor or mitigated the issue of climate change. This is in contrast to the first PwC CEO survey in 1998 when CEOs were positive about the drivers of globalization.

 

Bob Moritz, Global Chairman, PwC, said: “Despite a tumultuous 2016, CEO confidence is moving back up – albeit slowly and still a long way from the levels we saw back in 2007. But there are signs of optimism right across the globe, including in the UK and US, where despite predictions of a Trump slump and a Brexit exit, CEOs confidence in their company’s growth are up from 2016. And that mood is reflected elsewhere, with more CEOs across the world targeting the US and UK for investment than a year ago. While CEOs are more confident in the opportunity for growth, this year they told us these three concerns that were top of mind: a people and technology strategy that creates a workforce fit for the digital age; preserving trust in their businesses in a world of increasingly virtual interactions; and making globalization work for everyone by engaging ever more with society and collaborating to find solutions. All topics that will be high up the Davos agenda.”

 

In sharp contrast to 2016, CEO’s confidence in their own one year revenue growth is on the rise in nearly every major country across the world…with India (71%), Brazil, where confidence levels have more than doubled (57%), Australia (43%) and the UK (41%) topping the table. Confidence also rose
by 11 points in China to 35%, 6 points in the US to 39% and 3 points in Germany to 31%. In Switzerland confidence levels have more than doubled to 34%.

 

Bucking the confidence trend are Mexico and Japan where confidence levels have dropped, markedly so in Japan where confidence has plunged from 28% in 2016 to 14% today.

 

When asked what drives growth, organic expansion tops the agenda for over three quarters of CEOs (79%) in the coming year, while 41% are planning new merger and acquisition activity in 2017 and nearly a quarter (23%) of all CEOs intend to strengthen their innovation capabilities to capitalise on new opportunities.

 

PwC’s first global CEO survey showed emerging markets ‑ including China and India ‑ as a sure bet for success. But the changeability of markets, exacerbated by currency volatility, has caused CEOs to turn to a greater mix of countries. This year’s survey shows the US, Germany and the UK have become bigger priorities, while enthusiasm for investing in Brazil, India, Russia and Argentina has lessened from three years ago.

 

The top five most important countries for growth identified are the US (1), China (2), Germany (3), the UK (4) and Japan (5) with the UK rising in popularity as a growth destination with CEOs from the US (+4%), China (+11%), Germany (+8%) and Switzerland (+25%).

 

Shanghai, New York, London, and Beijing were also identified as the top four cities most important to an organization’s overall growth prospects over the next 12 months.

 

58% of business leaders think it’s become harder to balance globalisation with rising trends in protectionism. The concerns contrast with their views in the first PwC CEO survey which reported ‘the typical global corporation has as much freedom of trade as it needs’.

 

For the past 20 years CEOs have been largely positive about the contribution of globalization to the free movement of capital, goods, and people. However, this year’s survey respondents are sceptical that it has mitigated climate change or helped close the gap between rich and poor. This is similar to the public’s view on these issues in a separate consumer poll commissioned by PwC of more than 5,000 people in 22 countries.

 

Only 38% of the public believed globalization has had a largely positive impact on improving the movement of capital, people, goods and information, compared with 60% of CEOs. Almost two thirds (64%) of the public believe globalization has helped create full and meaningful employment, contrasting with over three quarters of CEOs (76%). The public are also less convinced than business leaders that globalization has created, to a large extent, a skilled and educated workforce (29% of the public vs 37% of CEOs).

 

“Public discontent has the potential to erode trust which is needed for long term sustainable performance. The real challenge here though, isn’t just one of how CEOs navigate, it’s about the need for CEOs to have a deeper, two-way relationship with stakeholders, customers, employees, and the public. Understanding the root cause of the potential discontent or perception is a critical first step towards communicating the benefits of business for society. There’s a lot at stake if we do not achieve inclusive global growth,” comments Bob Moritz.

 

According to the survey, technology is now inseparable from business’ reputation, skills and recruitment, competition and growth. Almost a quarter believe technology will completely reshape competition in their industry over the next five years (23%).

 

In an increasingly digital-driven world, technology has created a new dynamic between business and customers bringing huge benefits for both.  However on the flip side 69% of CEOs say it is harder to gain and keep people’s trust in this environment and 87% believe risks from use of social media could have a negative impact on the level of trust in their industry. And 91% of CEOs also agree data privacy and ethics issues could impact people’s trust in their organisations in the next five years.

 

Twenty years ago, trust wasn’t high on the business radar for CEOs. Fifteen years ago only 12% of CEOs thought public trust in companies had greatly declined. This year, 58% worry that a lack of trust in business will harm their company’s growth, up from 37% in 2013.

 

After several high-profile technology and security issues for big companies, CEOs unsurprisingly identify cybersecurity, data privacy breaches and IT disruptions as the top three technology threats to stakeholder trust.

 

Concern about skills has more than doubled in 20 years (from 31% concerned in 1998 to 77% in 2017) and human capital is a top three business priority, with diversity and inclusiveness and workforce mobility among the strategies being used to address future skills needs. Skills availability is a concern for more than three quarters (77%) of business leaders, and is highest for CEOs in Africa (80%), and Asia Pacific (82%).

 

More than half of CEOs (52% vs 48% 2016) expect to increase headcount over next 12 months. The UK (63%), China (60%), India (67%) and Canada (64%) are amongst those with the most ambitious hiring plans. By industry, CEOs in the Asset Management (64%), Healthcare (64%) and Technology (59%) have the most ambitious hiring plans, with CEOs in the Government and public sector (32%) having the least.

 

While only 16% of business leaders surveyed expect to reduce their overall employee base, CEOs say that 80% of those affected jobs will be impacted in some way by the use of technology or automation. Business leaders in Canada (100%), US (95%), Germany (93%), Australia (92%), and Brazil (91%) see technology having the greatest impact.

 

More than half of business leaders interviewed (52%) are already exploring the benefits of how humans and machines can work together, and two out five (39%) are considering the impact of artificial intelligence on future skills needs.

 

With the speed of technological change a concern for 70% of CEOs, skills in creativity and innovation, leadership and emotional intelligence are identified as the most valuable skills, that CEOs are finding it difficult to recruit. Digital and STEM skills are a recruitment issue for more than half of business leaders.