3 out of 4 Global CEOs Expect Positive World Economy Over Next 3 Years

Global CEOs' Confidence in Company Growth Hits 3-Year Low
Geopolitical and Political Uncertainty Cited as Biggest Corporate Risk
70% of CEOs Prioritize Investment in 'Generative AI' as a Key Opportunity

Despite ongoing global economic and geopolitical uncertainties, global CEOs expressed confidence in world economic growth over the next three years.

According to a survey conducted by KPMG, a global comprehensive accounting and consulting firm, targeting over 1,300 global CEOs (KPMG 2023 CEO Outlook), three out of four CEOs (73%) were optimistic about the global economy over the next three years. This figure slightly increased from 71% last year.

Contrary to their confidence in the global economy, their confidence in their own company’s growth significantly declined, hitting a three-year low. While 85% of global CEOs in 2020 expected growth for their companies, this year only 77% did, a drop of nearly 10%.

As obstacles to their company’s growth, 77% of CEOs cited reduced purchasing power due to inflation-driven price increases, followed by complex regulations (74%).

CEOs recognize the importance of building trust with customers for their company’s growth, with 71% stating they are prepared to divest businesses that damage their company’s reputation even if profitable. Additionally, 61% said they would publicly take a stance on political or social issues that are controversial.

Seventy percent of global CEOs prioritize investment in ‘generative AI (artificial intelligence)’ for their company’s future, expecting increased profitability (22%) and opportunities to pioneer new products and markets (15%). Fifty-two percent of CEOs anticipate generating returns on these technology investments within 3 to 5 years. However, CEOs also expressed concerns about cybersecurity risks (82%) and ethical issues (57%) posed by generative AI.

Two out of three CEOs (64%) expect that within the next three years, remote work arrangements for employees due to the COVID-19 pandemic will completely end, with a full return to office. High percentages were seen in life sciences (74%), automotive (73%), energy (73%), and infrastructure (71%), while technology and asset management sectors showed lower rates at 47% and 49%, respectively. Eighty-seven percent of CEOs said they are likely to offer benefits such as promotions to employees who return to the office.

Twenty-four percent of CEOs said ESG (Environmental, Social, and Governance) issues will have the greatest impact on customer relationships over the next three years, and 16% believe ESG will help build a positive brand reputation for their company. Eighteen percent expect ESG to assist in capital allocation, partnerships, and M&A strategies. Furthermore, 69% of global CEOs responded that ESG has been fully embedded into their business as a means of value creation.

Over the next three years, geopolitical and political uncertainties (18%) were identified as the greatest threat to company growth, followed by operational issues (12%), technological innovation (12%), supply chain risks (10%), and regulatory issues (9%). Notably, geopolitical and political uncertainties were not ranked last year but emerged as the top risk this year.

Bill Thomas, Chairman of KPMG, stated, “Global leaders face various challenges including economic and geopolitical uncertainties, rising stakeholder expectations regarding ESG, and the adoption of generative AI. Despite these circumstances, business leaders maintain confidence in the global economy, indicating the potential for companies to enter a sustainable long-term growth trajectory.” He added, “CEOs must continuously consider strategic plans from a long-term perspective and respond agilely to risks that may arise amid ongoing uncertainties.”

Meanwhile, the ‘2023 Global CEO Outlook,’ now in its ninth year, surveyed global executives about their outlook on corporate and economic growth as well as business strategies over the next three years. One-third of the surveyed companies have annual revenues exceeding $10 billion (approximately 13 trillion KRW), and companies with revenues under $500 million (approximately 600 billion KRW) were excluded from the survey.

This content was produced with the assistance of AI translation services.