According to a recent survey conducted by PwC, a leading consulting firm, there is a growing sense of optimism among executives regarding the global economy. However, an increasing number of CEOs believe that their companies will not be able to weather the next decade without significant changes due to the impact of climate change and technological advancements such as artificial intelligence.

The results of a survey of over 4,700 CEOs from around the world were announced on Monday, coinciding with the World Economic Forum’s annual gathering in Davos, Switzerland. The survey revealed a diverse outlook for the future, as business leaders, politicians, and activists gathered to discuss global issues.

38% of the executives expressed optimism about the economy’s strength, a significant increase from 18% in the previous year. This was during a time of high inflation, slow growth, and increasing interest rates.

According to the PwC Global CEO Survey, the percentage of CEOs anticipating an economic downturn has decreased to 45% from a previous high of 73% last year. Additionally, fewer CEOs view their company as being highly vulnerable to potential geopolitical conflicts. This is in spite of ongoing conflicts in regions such as Ukraine and the Middle East, as well as disruptions to international trade caused by attacks on commercial ships in the Red Sea by Yemen’s Houthi rebels.

Despite the positive economic forecast, there is still a significant challenge ahead. The World Bank recently announced that it predicts a third consecutive year of global economic slowdown in 2024.

The executives, on the other hand, had a more negative outlook on their companies’ capability to withstand major changes. The study indicates that 45% of those surveyed expressed concern about the sustainability of their businesses in the next ten years without adapting, compared to 39% in the previous year.

The chief executive officers claim to be attempting changes, however they are facing challenges such as regulations, a shortage of skilled workers, and other obstacles.

Bob Moritz, the global chairman of PwC (formerly known as PricewaterhouseCoopers), stated that this is a year of transformation, whether it be through expediting the implementation of generative AI or developing their business to tackle the challenges and opportunities of the climate transition.

According to PwC, artificial intelligence was viewed as a means to make business processes more efficient, but also a potential vulnerability. Approximately 75% of executives believe that AI will have a significant impact on how their company generates, distributes, and obtains value within the next three years.

Over 50% of the CEOs expressed belief that AI will enhance their products or services, however 69% acknowledged that their employees would require training to acquire the necessary skills for utilizing this evolving technology. They also expressed concerns about the potential impact of AI on cybersecurity threats and misinformation.

The organizers of the Davos conference issued a warning last week stating that the use of AI to spread false information, including the production of synthetic content, is currently the most significant threat to the world.

According to the Edelman Trust Barometer, a global survey presented at Davos by the public relations company Edelman, innovation is not being properly handled and is causing greater division, particularly in Western democratic countries. Those with conservative views are more likely to oppose innovation compared to those with liberal beliefs.

According to CEO Richard Edelman, innovation is only embraced when it considers the overall impact on those whose jobs will be affected and when scientists effectively communicate information to the public. Additionally, it is important that AI is accessible and improves people’s quality of life.

The recent online survey revealed that business remains the most trusted institution compared to government, media, science, and non-governmental organizations. The survey collected feedback from over 32,000 individuals in 28 countries between November 3rd and November 22nd.

The PwC study reveals that, like AI, the climate transition presents both potential and danger. A growing percentage of CEOs, about 33%, anticipate changes in their business practices within the next three years due to climate change.

Over 75% of the executives have started or finished making modifications to improve energy efficiency, but only 45% reported making advancements in considering climate risks in financial planning.

The PwC study included 4,702 CEOs from 105 countries and territories and took place between October 2nd and November 10th.

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Masha Macpherson and David Keyton wrote this report from Davos, Switzerland.

Source: wral.com