CEOs fear for their companies in pre-Davos survey as AI and climate risks increase

Global executives are increasingly concerned about the long-term viability of their companies, a pre-Davos survey from PricewaterhouseCoopers found, with pressure mounting from generative artificial intelligence (AI) and climate disruption.

About 45% of more than 4,700 global CEOs surveyed do not believe their companies will survive the next decade barring significant changes, the Big Four auditor said.

“There’s the 55% who don’t think they need to change radically, and I would say that’s a bit naive because the world around them is changing so quickly,” PwC Global Chairman Bob Moritz told the Reuters Global Markets Forum (GMF). of the annual meeting of the World Economic Forum in Davos.

Advances in generative AI were the top concern for most respondents, with almost 75% predicting it would significantly change their business over the next three years.

The majority expect AI to require training in new skills for employees, while many expressed concerns about cybersecurity risks, misinformation and bias against specific groups of customers or employees.

“If you just look at the same skills, I think there will be an impact,” said Juergen Mueller, SAP’s chief technology officer, referring to job cuts and hiring freezes at junior positions in the technology sector.

“That’s why you need even better trained people,” Mueller told GMF in Davos.

PwC’s research also showed that more attention is being paid to environmental problems that put pressure on margins. Four in ten executives say they will accept lower returns for climate-friendly investments.

Less than 50% reported progress, including on climate risks in financial planning, while 31% said they have no plans to do so.

Overall, companies were more confident in the global growth picture, with 38% optimistic about growth, which was more than double the growth surveyed in 2023.

However, they were also less optimistic about sales growth in the coming year, with 37% confident in their ability to increase sales, up from 42% in 2023.

“The ability to raise rates and raise prices is not as easy as it once was… that will be a trend that we will probably see over the next two to three years,” Moritz said.

Great Britain is calling

PwC’s research found that Britain was the best country to invest in, with almost a third of US CEOs choosing the traditionally popular country as their top target.

Britain’s ranking among Chinese CEOs has risen dramatically to sixth place, up from 16th last year.

However, the former European Union member has become slightly less strategically important to global CEOs, falling one place to fourth behind Germany, while the US and China retain their first and second positions respectively.

First print: January 16, 2024 | 12:11 pm IST