Almost two in five of the bosses of global companies fear their businesses will be unviable within a decade because of the struggle to find talented workers and the need to adapt to technological change.
As the World Economic Forum got under way in Davos on Monday evening, a survey of chief executives by the consultancy firm PwC was released, showing a downbeat mood about the immediate global outlook and longer-term survival prospects.
Of the UK CEOs questioned, 21% said they could not see their businesses lasting a decade on their current trajectories, rising to 39% for global CEOs. Almost three-quarters of CEOs (73%) from around the world said global growth would decline over the coming year – the most pessimistic finding since the question was first asked 12 years ago.
UK CEOs were less downbeat about the world economy than their global peers, with only 4% of British executives expecting a significant slump in output, compared with 12% for chief executives globally.
The PwC survey found that 40% of UK CEOs believed their company’s tech capabilities were not good enough to meet their strategic objectives, and thought the problem would get worse without urgent action. As a result, 86% of UK chief executives said they were automating processes and 74% were upgrading skills in key areas of their businesses.
Kevin Ellis, the chair and senior partner at PwC UK, said: “Businesses have already undergone massive change this decade, with hybrid working and cloud computing among the big shifts. But this is the tip of the iceberg – many CEOs believe their current business models are unsustainable and this means more change ahead.
“This isn’t about tinkering but fundamental changes requiring big investment in people, skills and technology. It’s positive businesses are focused on making the changes needed despite challenges including inflation and skills shortages, which could be overwhelming.”
In a separate piece of research, two-thirds of a group of 22 private and public sector chief economists surveyed by the WEF thought there was likely to be a global recession in 2023, with almost one in five saying it is extremely likely to occur.
More than half expect inflation to be high in Europe this year, while there was unanimity that European growth will be weak in 2023. More than 90% of chief economists predicted economic growth in the US would be weak.
“With two-thirds of chief economists expecting a worldwide recession in 2023, the global economy is in a precarious position,” said Saadia Zahidi, a managing director at the World Economic Forum. “The current high inflation, low growth, high debt and high fragmentation environment reduces incentives for the investments needed to get back to growth and raise living standards for the world’s most vulnerable.”
More positively, supply chain disruptions were not expected to cause a significant drag on business activity in 2023, the chief economists told the WEF.
