CEOs fear for their firms in pre-Davos survey as AI, climate risks rise

A person walks inside the venue, on the first day of the annual meeting in Davos, Switzerland, January 15, 2024. REUTERS/Denis Balibouse

Global executives are increasingly worried about the long term viability of their businesses, a PricewaterhouseCoopers pre-Davos survey showed, with pressures mounting from generative artificial intelligence (AI) and climate disruption.

Some 45% of more than 4,700 global CEOs surveyed do not believe their businesses will survive, barring significant changes, in the next ten years, the "Big Four" auditor said.

"There's the 55% who think they don't have to change radically, and I would argue that's a little naive because the world is changing so fast around them," PwC Global Chairman Bob Moritz told the Reuters Global Markets Forum (GMF) ahead of the World Economic Forum's annual meeting in Davos.

Advancements in generative AI were top of the concerns for most survey respondents, with almost 75% predicting it would significantly change their business in the next three years.

The majority expect AI to require training in new skills for employees, while many expressed concerns about cybersecurity risks, misinformation, and bias towards specific groups of customers or employees.

"If you just look at the same skills, I think yes, there will be impact," said Juergen Mueller, SAP's chief technology officer, referring to job losses and hiring freezes on junior positions in the tech sector.

"Therefore, what you do need is even better skilled people," Mueller told GMF at Davos.

The PwC survey also showed a stronger focus on environmental concerns pressuring margins, with four in ten executives saying they accepted lower returns for climate-friendly investments.

Less than 50% reported progress, including on climate risks in financial planning, with 31% saying they had no plans to do so.

Overall, companies were more confident in the global growth picture, with 38% optimistic on growth, which was more than double those surveyed in 2023.

However, they were also less optimistic on revenue growth over the next year, with 37% confident of their ability to increase revenue, versus 42% in 2023.

"The ability to raise rates and raise prices is not as easy as ever before ... that's going to be a trend that we're likely to see over the next two to three years," Moritz said.

BRITAIN CALLING

PwC's survey found that Britain was the top country to invest in, with nearly a third of U.S. CEOs selecting the traditionally popular country as their top target.

Britain's standing among China's CEOs rose dramatically, to joint sixth, up from sixteenth last year.

However, the former European Union member has become slightly less strategically important for global CEOs, falling one place to fourth behind Germany, with the U.S. and China keeping their first and second places respectively.