CEOs in India remain confident about growth prospects of their business
PwC analysis prior to the Covid-19 outbreak shows that CEOs in India and across the globe were already burdened with uncertainty, owing to factors such as technological advancement, regulatory changes and protectionism. Indian CEOs however remain relatively optimistic.
The Big Four accounting and advisory firm surveyed more than 1,500 CEOs across the globe at the end of 2019, looking to gauge sentiments across the global business environment. At a global level, the firm found that concerns in the upper rungs of businesses have visibly undergone a shift over the last decade, from worrying about disruption to grappling with uncertainty.
At the turn of the last decade, businesses were worried about the rapid rate of disruption unfolding in the global business environment. Since then, as firms across the globe came to terms with technology and began to reap its benefits, a steady wave of optimism swept the global business landscape.
PwC reports that in 2018, global CEOs reported a “record level of optimism,” not only about their individual businesses but also about growth in the global economy. This comes in stark contrast to the findings from this year, where most CEOs expect a decline in global GDP growth, owing to uncertainty.
Uncertainty stems from trade wars and other generally internalising positions being taken in the global trade landscape, as businesses worry about closing of trade relations, changes in the regulatory landscape and other resulting factors. This is without taking into consideration the devastating uncertainty that has emerged since the start of this year from the Covid-19 crisis.
Indian CEOs
PwC’s sample of respondents included more than 60 CEOs from Indian businesses. Regarding the global economic scenario, the sentiment in India is largely consistent with the global scenario, with more than half of Indian CEOs expecting a decline in the global economic growth rate.
Where India differs from economies across the globe is in CEOs’ confidence with respect to their own businesses. CEOs across the world are drawing on the poor outlook for the global economy to anticipate similarly dampened figure for their own businesses. In India, however, confidence in individual businesses is high.
When it comes to being confident about growth prospects in their own business, Indian CEOs were the second most optimistic in the world – behind only China – when it comes to growth over the next year, and the most optimistic in the world by some distance when it comes to growth expectations over the next three years.
This perhaps stems from the fact that India and China have strong tech markets, and individual businesses in these markets therefore have an opportunity to capitalise on the digitalising business environment globally. Businesses in these markets also appear to be seeing opportunities where others see challenges, particularly with respect to regulatory restrictions and climate change.
PwC addressed the issue of increasingly stringent privacy regulations and what they meant for an individual business. India was among a handful of markets where most CEOs said that new privacy regulations serve to simultaneously increase consumer trust and maintain business competitiveness. Other markets with a similar outlook include China, Brazil and France, while most others disagree with this balance.
Similarly, well over 70% of CEOs in India agree that climate change initiatives being rolled out across the globe have potential to create new product and service opportunities, 17% of whom strongly agree with this characterisation. This is a big jump from 2010, when only 5% of Indian CEOs strongly agreed with this scenario.
According to PwC, confidence in India also stems from its advancement in the global business landscape. The firm reports that India jumped 79 places in the World Bank’s Ease of Doing Business index in the last year alone, while also recording a significant jump in the Global Innovation Rankings.
So, compared to the global business environment, Indian leaders are relatively optimistic, although these responses were provided before the mass Covid-19 outbreak. Economic disruption from the pandemic are hitting many sectors hard in India, including its crucially positioned tech industry.
