Less than 3 in 10 (27%) of global CEOs are “very confident” in their prospects for revenue growth this year, according to PwC’s 23rd Annual Global CEO Survey. That’s the lowest it’s been since 2009, and it’s significant because, PwC notes, “the change in CEOs’ revenue confidence has proven to be a reliable indicator of both the direction and the level of global GDP growth in the year ahead.”
The survey respondents came from across industries, but the findings echo many of the concerns currently top-of-mind in the food industry.
Slower growth and growing threats
In 2018, 57% of CEOs said they believed global economic growth would improve, 36% said it would stay the same, and just 5% said it would decline. This year, that pattern inverted: only 22% said it would improve, 24% said it would stay the same, and a whopping 53% said it would decline. In North America, the outlook was even more pessimistic — 63% of CEOs (the lowest of any region) expect global economic growth to decline, while only 10% expect it to improve.
A key reason for this is uncertainty, PwC says, including tensions over trade and geopolitical issues. Other factors include workforce challenges and the fact that new digital technologies haven’t yet delivered the promised productivity gains.
In terms of threats, “over-regulation” continued to be the top concern, while “trade conflicts” and “uncertain economic growth” both made it into the top 3. “Climate change and environmental damage” is also a threat for 24% of CEOs this year, up from 19% last year.
In North America, “cyber threats” took the top spot (50%), followed by “policy uncertainty” (42%), “trade conflicts” (42%), “over-regulation” (38%), and a tie between “geopolitical uncertainty” and “availability of key skills” (33%).
North America is the only region where cyber threats are the top concern. The concerns are due to the proliferation of digital technologies and a lack of standards to regulate them. PwC notes: “No global framework exists that can control attacks on digital technology. And in many areas, digital dominance is increasingly seen as both an economic competitive advantage and a national security imperative.”
In general, most CEOs expect governments to step in by regulating content, breaking up dominant tech companies, and enforcing compensation for the collection of personal data. In North America, 66% (the highest in the world) believe this will cause the internet to become more fractured. The challenge going forward, PwC notes, will be designing regulations that adequately balance maintaining business competitiveness and increasing consumer trust.
We’ve all heard the forecasts about how many jobs will be replaced by automation. While this hasn’t happened as quickly as many expected, it is still happening. In the food industry, automation is an important part of the effort to deal with the declining workforce.
As lower skilled jobs disappear, they’re often replaced by more highly skilled positions. On a food packaging line, for example, this might mean an employee moving from manually filling cases to monitoring a machine that fills the cases. This transformation, coupled with a decreasing number of workers, has resulted in the need to upskill the current workforce.
So far, however, the upskilling effort hasn’t been as successful as it needs to be. Globally, only 18% of CEOs say they’ve made “significant progress” in establishing an upskilling program. In North America, where the talent pool is relatively mature, the percentage is even lower.
Those that have developed advanced upskilling programs report positive outcomes, including stronger corporate culture and employee engagement, greater innovation and accelerated digital transformation, and improved talent acquisition and retention.
Finally, the survey found that CEOs are increasingly recognizing the benefits of investing in climate change initiatives.
CEOs in the United States, however, are less inclined than those in other countries to embrace these opportunities. Only 15% (the lowest in the world and barely changed from 2010) agreed with the statement, “climate change initiatives will lead to significant new product and service opportunities for my organisation” (in contrast, 47% of CEOs in China agreed).
Trade tensions, cybersecurity threats, workforce challenges, environmental concerns — all of these issues are already driving change in the food industry, and PwC’s report suggests they’re likely to continue.
To learn more about the perspectives of CEOs around the world, download the full report.