Majority(57%) of the CEOs are optimistic that global economic growth will improve over the next 12 months. Moreover, the percentage of CEOs predicting improved growth doubled from last year. 52% of the Middle East respondents believe global economic growth will improve in 2018. This number was 26% in 2017.
However, in contrast, the confidence of CEOs about the growth of their own organisations has gone down in 2018 except for the CEOs in North America, who have upped their confidence. The confidence of Middle East CEOs has dipped to 33% in 2018 from 38% in 2017.
In terms of global investment hubs, US retains the top spot, followed by China, Germany, UK and India. While Saudi Arabia was ranked 12th on this list in 2017, it doesn't feature in the top 15 of 2018. Interestingly enough, UAE has made it to the 15th spot in 2018.
When asked about the growth of their organisations over the next three years, all regions report diminished levels of 'very confident'. Particularly restrained are CEOs in the Middle East and Central & Eastern Europe,where very confident responses reach near-record lows, down 33% and 26%,respectively, from last year.According to the PwC report, the last time somewhat confident levels were above very confident levels was in 2009,when confidence, in general, took a nosedive in the aftermath of the global financial crisis. However, the report rules out this dip as a similar harbinger of doom. " It may simply be harder for CEOs to see beyond the near term."
So, what keeps the CEOs awake in the nights? Each region reports a different mix of threats as the most concerning, but one general global observation is that CEOs across the world are increasingly anxious about broader societal threats such as geopolitical uncertainty, terrorism, and climate change rather than direct business risks such as changing consumer behaviour or new market entrants.Over-regulation continues to be the biggest concern of CEOs around the growth of their organisations, followed closely by terrorism, geo-political uncertainty, cyber threats and availability of key skills. The report further highlights the anxiety about the impending promise and perils of artificial intelligence (AI) taking hold. PwC projects that AI will contribute an additional $15.7 trillion to global GDP by 2030, an increase of 14%. That boon to the overall economy, however, will come at great cost to those who cannot rise to its challenges in time.
The primary concerns of Middle East CEOs were found to be geo-political uncertainty(63%), cyber threats(54%), over-regulation(44%), terrorism(42%), speed of technological change(40%), increasing tax burden(38%), uncertain economic growth(33%), unemployment(31%), social instability(31%) and availability of key skills(29%).
Social instability is the prime concern for CEOs(50%) in Africa. This is followed by increasing tax burden, over-regulation, uncertain economic growth, geo-political uncertainty, exchange rate volatility, cyber threats, populism, availability of key skills and unemployment.
When asked about the benefits of globalisation, CEOs had mixed views. When asked if globalisation has helped close the gap between the rich and the poor,nearly 40% of CEOs respond not at all. More than one in four CEOs say that globalisation has not helped improve the integrity and effectiveness of global tax systems at all.
Echoing the theme of the World Economic Forum this year, PwC's 21st CEO Surveys poke to CEOs to understand how companies are navigating an increasingly fractured world. Results reveal that region by region, the world is edging away from its full-on embrace of a singular and seamless global marketplace, at least in the physical, geopolitical world. Cyberspace and corporate integration are the two spheres in which the world is still moving towards an overarching global model. However, most CEOs see the world moving in a direction towards multiple belief systems and rules of law, regional trading blocs and increased tax competition, and rising nationalism and diverse economic models.On a positive note, CEOs across every region and country recognise that the world is moving away from measuring prosperity primarily through financial measures (e.g., GDP) and towards measuring prosperity through multifaceted metrics (e.g., including quality-of-life indices).
To deal with the market dynamics, PwC suggests four possible approaches:1. Adopt new measures of prosperity that look beyond economic growth to social progress.2. Foster a beneficial place for technology in our society. 3. Educate for the future.4. Commit to a purpose one that goes beyond financial goals to incorporate a broader set of shared values and behavioural expectations.