Business Leaders Optimistic Despite Geopolitical Uncertainties

CEOs of the world's largest companies remain optimistic about the global economy's growth prospects, but their confidence in their own company's growth has declined, while geopolitical and political uncertainty has been ranked as the top risk to economic growth, according to a global survey by KPMG sent to MTI.

The global consultancy's ninth KPMG CEO Outlook 2023 survey says that 73% of CEOs were confident about the three-year outlook for the global economy this year, down from 71% last year, while their confidence in their own company's growth fell to a three-year low of 77%.

Geopolitical and political uncertainty jumped to the top of the list of risks to growth, up from seventh place a year earlier.

Among the risks, organizational-functional problems and emerging/disruptive technologies ranked in the top three in 2022 and 2023, respectively.

Prolonged uncertainty and interconnected crises – polycrisis – have forced CEOs to take a purposeful approach to responding to uncertainty, reassess their strategic priorities and adopt a collaborative leadership approach, Rezső Rózsai, CEO of KPMG, said in a statement.

The survey highlighted that the strategic priorities of business leaders continue to fall into three main groups: technology digitalization-AI (artificial intelligence), the ESG (environmental, social and governance) framework, and workforce retention and talent development.

ESG is now a foundation for business success, according to the survey, with 69% of CEOs saying they have incorporated these aspects into their business as a means of creating value.

Generative artificial intelligence is at the top of 7 in 10 CEOs' medium-term investment priorities, but ethical challenges were cited as the biggest deterrent to investing in new technology (57%).

With AI and the rapidly changing technology landscape, business leaders say the need for faster response and more effective collaboration has increased, and nearly two-thirds (64%) expect to return to the office entirely in the next three years.

Nearly nine in ten (87%) anticipate that office work will be incentivized through financial rewards or promotions. This year's KPMG survey included 1,325 business leaders from 11 countries around the world. All of the firms they represented had revenues of more than USD 500 million and a third had annual sales of more than USD 10 billion.