Business optimism is on an upswing despite inflation, geopolitical instability, and talent disruptors, said Deloitte recently.
According to the Fortune/Deloitte CEO Survey series, CEOs’ growth expectations have ticked up from Fall of 2022, with 45% expecting strong or very strong growth, while pessimism toward the global economy has declined.
The survey was done during Feb 14-21, 2023, collecting responses from 149 CEOs representing more than 15 industries, according to Deloitte, adding that those leaders surveyed include Fortune 500 CEOs, Global 500 CEOs, and select CEOs in the global Fortune community.
Expectation about how inflation might change also reflects business optimism.
While inflation remains a top disruptor, CEOs predict that the current inflation rate will continue to decrease by mid-year, Deloitte pointed out.
Focusing on both the present and the future, CEOs see core business transformation, talent acquisition, and market innovation as priority investment areas, the firm added.
CEOs also seem to maintain a pragmatic mindset when investing in advanced technology and recognise the need to invest in and understand AI and how it will affect their organisation, Deloitte added.
Key findings
- The vast majority of CEOs see collaboration versus competition as the best course of action for solving climate change (93%) and geopolitical stability (92%) issues.
- With business optimism on the rise from Fall and Summer 2022, and pessimism declining, concerns about the global economy dropped sharply from 76% in October 2022 to 37%.
- Geopolitical instability surpassed labor/skills shortages and ranked second behind inflation as external issues that CEOs expect to influence or disrupt their business strategy within the next 12 months.
- Compared to October 2022, when 48% of CEOs ranked geopolitical instability as a top concern, 51% expressed the same concern in this survey. Labor/skills shortages instability dropped to third in this survey with 48%, down 2% from the Fall.
- Other sources of financial instability, which ranked fourth, has risen steeply to 44% in this survey, up from 34% in October and almost double (23%) from June 2022, while supply chain disruption dropped to 27%, down from 36% in October.
- Balancing short-term demands with long-term threats, CEOs are finding they spend slightly more time (55%) focused on the long-term versus the short (45%).
- With no shortage of investment areas and ‘priorities’ to focus on, over two-thirds of CEOs ranked core business transformation (67%) and talent acquisition (67%) as top priority investment areas.
- Rounding out the top three priorities, well over half of CEOs (62%) ranked other new product/service/market innovations as priority investment areas.
- Following the October 2022 survey when the majority (91%) of CEOs said they plan to invest to some degree in AI over the next 12 months, CEOs seem to be taking a pragmatic approach.
- CEOs appear to be focused on the foundational aspects of AI technology with most viewing it as a platform for advanced predictive analytics (85%), sophisticated data analysis (80%), and, to a somewhat lesser degree, recommendation engines (52%).
- 39% of CEOs said they currently view AI as a platform for generative AI, and only a fourth (27%) envision AI as a platform for autonomous decision making.
- CEOs believe collaboration is the best course of action for ESG issues, trust in institutions, cybersecurity risks, and ethical technology but not necessarily for advanced technologies. Overwhelmingly, CEOs see solving climate change (93%) and geopolitical stability (92%) issues with collaboration rather than competition.
