PwC gets into action in Davos

Dennis Nally photoAuthor: Dennis Nally, Chairman, PwC International Ltd.

Well, we're officially in business at the World Economic Forum 2014 meeting in Davos! Yesterday evening, I hosted a press conference to launch PwC’s 17th Annual Global CEO Survey. Now in its 17th year, I don't think I'm exaggerating when I say our Global CEO Survey is now a staple at Davos and a great kick off for journalists attending the WEF meeting.

A lot of great questions were asked by the journalists who wanted to know if CEOs are feeling more confident this time around. And the answer, according to findings from our survey, is yes. CEOs are definitely looking at the glass as half full. In fact, twice as many CEOs as last year believe the global economy will improve in the coming year. This optimism extends to their own growth prospects. 39% say they are ‘very confident’ of growing revenue this year. That's up from 36% last year.

As you can see from the chart below, CEO confidence has been on a bit of a roller-coaster ride over the last few years. Plunging at the beginning of 2009, coming back up in 2011, but dropping steadily till last year. And now slightly picking up again.

PwC's 17th Annual Global CEO Survey - confidence levels
Interestingly, advanced markets like the US, Germany and the UK are back on CEOs' radar, reflecting the improving conditions in these markets. But don't write off the emerging economies just yet. They might not be growing as fast as they used to, but markets like Indonesia, Mexico, Turkey, Thailand and Vietnam are still considered attractive investment destinations.

Despite the returning confidence levels, CEOs still have some serious concerns especially about government efforts to balance reform with growth. Over-regulation tops the list. In fact, CEOs are more worried about the impact of regulation on their business than they are about the state of the economy.

The ability, or inability, of governments to deal with increasing deficit and debt also continue to weigh heavily on CEOs' minds. This is especially acute in the US where concerns about fiscal deficit rise to over 90% amongst CEOs there.

So how are CEOs preparing for a future where business as usual no longer applies? Well, they're transforming their businesses in response to three global trends - technological advances, demographic shifts and shifts in global economic power.

To keep up with the dizzying pace of technological change, CEOs need to seek new ways to create value. Innovation is their preferred opportunity for growth. And they're doing this by changing their R&D functions, exploring better ways of managing big data and changing their technology investments.

As many countries face challenging demographic shifts which will impact on the available labour market, developing tomorrow’s workforce is the second area CEOs are looking to transform. Along with perennial issues like rising wages and securing skilled workers, CEOs must also contemplate how to manage the talents of employees who grew up with iPhones, iPads, and cloud computing.

Chasing new consumers is the third area of transformation. As the world gets wealthier and the global middle class rises dramatically, perhaps not surprisingly, over half of CEOs are concerned about the changes in consumer spending behaviour. How can they connect with a new generation of consumers who won't necessarily look, think or act like them? The vast majority are intent on changing both their customer growth and retention strategies and channels to market.

Well, that's just a summary of the 17th Annual Global CEO Survey. I'd welcome you to dig deeper into the Survey and discover how its insights can help you through 2014 and beyond. It's available for download at www.pwc.com/ceosurvey.


Dennis Nally leads the global network of PwC firms. He has extensive experience serving large multinational clients in a variety of  industries, principally focusing on technology and life sciences. Dennis is also a frequent speaker and guest lecturer on issues affecting the professional services profession and the global capital markets. Read Dennis Nally's full biography.

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