DAVOS, Switzerland: January 20, 2016. PwC says CEOs are most concerned about government over-regulation (79 percent) and geopolitical uncertainty (74 percent) according to its latest survey of over 1,400 individuals in more than 80 countries.
As a result CEOs are less positive about the global economy in 2016 with survey optimists declining 10 points to 27 percent this year, while the pessimists have grown in number from 17 percent to 23 percent overall.
According to Dennis Nally, chairman of PwC International, many CEOs are looking to “play things safe” with the U.S. and China offering the best prospects in 2016, with Germany and the U.K some way behind.
Respondents said they also see potential in India and Brazil in 2016 - despite the latter’s “political and economic struggles” - while CEOs have also noticed new opportunities in Mexico and the UAE.
PwC thinks the world is shifting from globalization to one with many dimensions of power, growth and threats – a transition it calls “multi-polar”. It notes the majority of CEOs agreed, with 59 percent expecting multiple economic models in future, 75 percent anticipating increasing trade regionalization, 81 percent experiencing growing divergent systems of laws and liberties, and 83 percent predicting differing fundamental belief systems underpinning societies.
Accordingly, PwC expects customers increasingly will judge companies on how they live up to their own values for the greater good. Unilever is cited as an example of consumers choosing ethical and sustainable products and services, with the company’s ‘sustainable’ brand portfolio now half its total growth and expanding twice as fast as its other products.
“It’s just one of nine companies globally that generate a billion dollars or more in annual revenue from sustainable products or services. Indeed, in 2015 sales of consumer goods from brands with a demonstrated commitment to sustainability grew more than 4.0 percent globally, adds PwC.
Acknowledging this trend Denise Morrison, president and CEO of the Campbell Soup Company observed: “Purpose is something you carry in your heart, not something an ad agency makes up. So we pulled the company’s purpose out of our people’s hearts and manifested it in seven words: ‘Real food that matters for life’s moments.’ We validated those words with consumers and our employees. Consumers told us stories about how our brands really matter to them. That’s led to an umbrella over all of our brands, that purpose can encompass and motivate our people around why what we do every day matters.”
Ajay Banga, president and CEO of MasterCard U.S. added: “You’ve got to run a company for profit, you’ve got to run it for revenue growth, but you also have to run it to be around ten years from now doing the right things. That’s one of the biggest issues most CEOs face today.”
PwC concludes from its latest survey that CEOs are focusing on developing three core capabilities to ensure they will survive an increasingly complex social and business future: addressing greater expectations by stakeholders and customers; harnessing technology, innovation and talent to meet these expectations; and developing methods of measuring and communicating success.