India’s CEOs more bullish on economy than global counterparts
Indian CEOs are more optimistic about their country's prospects than their global counterparts, with 57% expressing positivity compared to 29% worldwide, according to research among over 4,000 CEOs worldwide.
The Global CEO Survey by PwC, which has been running for over a quarter of a century, found that nearly 80% of CEOs in India anticipate a decline in global economic growth in the coming year, marking the most negative outlook in the past 12 years. Nonetheless, a majority of India's CEOs (57%) are hopeful about the country’s own economic growth prospects over the next 12 months.
This is in stark contrast with the views of CEOs in the wider region and globally, with ‘only’ 37% and 29% of CEOs in Asia Pacific and globally (29%) optimistic about their country’s own economic growth prospects.
“Despite signs of a global economic slowdown, continuing high inflation and the ripple effects of the conflict in Europe, there is optimism among India CEOs about the country’s economic growth,” said Sanjeev Krishan, Chairperson for PwC in India.
The report, which surveyed a total of 4,410 CEOs from 105 countries and territories including 68 from India, identified inflation (35%), macroeconomic volatility (28%), and geopolitical conflict (25%) as the biggest threats to economic growth.
Climate change gains prominence as a cause for concern for India CEOs over the next five years, with 31% voicing that they believe their companies will be extremely/highly exposed to the threat.
To counter these threats, CEOs are leading all kinds of action. Two thirds (67%) are taking measures to reduce the impact of geopolitical conflicts on their supply chains. Furthermore, around 60% of Indian businesses are currently developing new products or processes that are environmentally sustainable. Meanwhile, a large majority of India CEOs, 85%, do not intend to reduce their workforce, and 96% do not plan to decrease employee compensation.
Notably, in Asia Pacific, mature economies such as Australia and Japan worry more about cyber risk, while geopolitical conflict is the top threat for China, Hong Kong and South Korea.
The looming business model disruption
According to the PwC survey, 41% of CEOs in India are of the opinion that their companies will not be financially sustainable in ten years’ time if they stick to their current business models. 62% of CEOs, in particular, believe that changing customer demand will impact profitability in their industry over the next ten years to a large or very large extent, while 54% are concerned about changes in regulations.
The concern of CEOs echoes a recent much cited report by McKinsey & Company, which found that executives worldwide expect half of their company’s revenues will be derived from new products, services or businesses by 2026, with one in five considering new business building their foremost priority.
PwC’s survey further emphasises the significance of trust and transformation in creating long-term value. Indian CEOs stress the importance of partnering with non-business entities to tackle sustainable development. Nevertheless, many CEOs doubt if their organisations have the necessary preconditions for organisational empowerment and entrepreneurship, including alignment with company values and leaders who encourage dissent and debate.
“To survive over the next few years, CEOs will need to manage external risks and drive profitability. In the long term they will also need to reimagine, reinvent and reconfigure their businesses and work culture to thrive. Importantly, they need to act on both now, and simultaneously,” said Krishan.
Driving the strategic agenda should be led by the top, with CEOs advised to take end responsibility for reinventing the businesses and operating model. “To succeed, CEOs need to manage external risks, drive profitability, and reimagine, reinvent and reconfigure their businesses and work culture,” said the report.
A complex task, and one that will require a careful ‘balancing act’ for CEOs, states PwC’s research, which “starts with their own calendars.” Asked how they would ideally allocate their time if they could start with a blank calendar, 24% of India CEOs said that they would like to spend more time evolving their business and its strategy to meet future demands and 19%, ideally engaging with and mentoring/developing employees.
