The 2023 CEO Insights Report, published by Arthur D. Little, a renowned strategy and management consulting organisation, shows that CEOs of the largest corporations in the world remain upbeat despite the current economic unrest. For the next three to five years, 63 percent of respondents anticipate a stable or positive economic environment.
Arthur D. Little’s 2023 CEO Insights study spoke to nearly 250 CEOs from companies with turnovers of more than USD 1 billion out of which 33 percent of the Indian CEOs surveyed had an optimistic view about the economic outlook over the next 3-5 years. The research shows a global senior executive community that is taking the bull by the horns and working with passion and creativity to get the global economy back on track.
Barnik Chitran Maitra managing partner, Arthur D. Little India & South Asia says “Our research reveals that Indian CEOs are more optimistic about the future than their global counterparts. They look past the current crisis to embrace a more promising future for their businesses with over 90% of Indian CEOs increasing or maintaining growth investments. We are certain that this new generation of ambidextrous Indian CEOs and companies can potentially become national and global champions.”
The study further highlights CEOs who are keen on growth despite the crisis as half believe they will expand into new regions, while 30 percent anticipate growing faster than the overall market. Even cautious CEOs anticipate increasing growth investments, with 40 percent planning to raise spending and 55 percent holding expenditures steady. Leading CEOs are simultaneously developing true ambidextrousness by integrating this innovation with a laser-like focus on cost efficiency.
Nonetheless, there are differing pictures between regions. Compared to just 25 percent of CEOs in North America and 10 percent in Asia, 38 percent of CEOs in Europe’s top 5 economies – France, Germany, Italy, Spain, and the UK expect to see a positive economic outlook over the next 3 to 5 years. Globally, over a quarter (26 percent) listed technology innovation, as the most critical factor to growth, well ahead of raw material/energy prices (11 percent). Factors such as supply chain, and cyber risks both outranked raw material prices globally. While telecommunications executives show less confidence in the skills of their workforce compared to the global average, travel and transportation CEOs believe that there is a limited need for a reskill.
The report further delves into CEOs who see technology innovation as the most critical factor to company growth and are moving beyond digitalization to embrace technologies such as AI, robotics, and automation. 60 percent want to explore new technologies, and 27 percent believe the Metaverse and virtual reality will impact their business. Hearteningly, 80 percent of CEOs believe focusing on environmental, social, and governance (ESG) delivers a competitive advantage, rather than simply being a compliance cost. In fact, 41 percent of CEOs rank it as a higher priority than all other initiatives.
The study draws five clear conclusions enlisted below:
CEOs have a positive attitude and are focused on the future, with even the most defensive CEOs increasing their investment in growth.
CEOs are leading increasingly ambidextrous organizations that are driving both cost optimization and innovation. 50 percent plan to enter new geographies and are investing heavily in technology to drive innovation.
CEOs are building on experience, thanks to changes forged during the pandemic. 91 percent are happy with their current organizational structure, although many struggle to find and develop talent.
CEOs are moving beyond digitalization to embrace technologies such as AI, machine learning, robotics, and automation. They are also looking forward; 60 percent want to explore new technologies and 27 percent believe the Metaverse and virtual reality will impact their business.
CEOs now see environmental, social, and governance (ESG) factors as core for their business. 80 percent see ESG delivering a competitive advantage while 41 percent of CEOs rank it as a higher priority than other initiatives.
Francesco Marsella, managing partner, and global practice leader, strategy & organization at Arthur D. Little, comments: “In a downturn, conventional business wisdom is to cut costs and focus on survival. Despite current challenges and many dark macroeconomic predictions for 2023, most CEOs we spoke to are optimistic for the future, working with passion, entrepreneurship, and creativity to manage performance today while building for the future. They see opportunity in adversity, looking beyond the current crisis to embrace a more positive future for their companies and the wider society.”