2021 is an interesting year from a business leadership perspective. Forecasting how the global business landscape will bounce back from the pandemic of 2020 is unlike any situation executives have faced before. The last time we had such a global event impact the business world was World War II, and it would be unfair to compare today’s business environment to that of the 1940s. That is why we wanted to take a look at the PwC 24th Annual Global CEO Survey, to learn what CEOs are saying about the year ahead.
One of the positive findings of the survey is that the majority of CEOs are feeling positive about the global economy bouncing back. This is driven in part by their adoption of digital technologies which help improve productivity and innovation. While they are confident, they also have concerns including cybersecurity and regulatory policy.
More than three-quarters of the respondents predict the global economy will improve this year. That’s almost 20 percentage points above the previous high. It’s also more than 50 percentage points higher than the 2020 outlook, which was conducted pre-pandemic. When asked about their own companies, more than one-third were optimistic for the coming year, and nearly half are optimistic with their three-year outlook. PwCs CEO confidence level through the years has proven to be accurate, and this year it forecasts a return to pre-pandemic levels by the end of 2021 or early 2022.
While optimism abounds, there are still concerns. Inflation, trade policy, and taxes have their attention. With the amount of debt taken on during the pandemic, tax policy has risen from 15th on the list of threats up to 7th. During times like these, governments tend to develop tax policies that benefit their national position.
According to SHV Holdings’ Jeroen Drost, “I’m pretty confident that in a couple of years’ time, the economy, by and large, will be back on its trajectory: less steep, less global and maybe less interwoven or more balanced. I don’t think it will be completely back, because I think there will be a couple of fundamental changes in global trade. That has [mainly] to do with the impact of geopolitics, local politics, the closing of borders and introducing cross-border taxes.” Instead of taking an us against them approach, tax policy should be developed in collaboration and with transparency.
One item that rose on the threat list was unexpected, climate change. It went from 24% to 30%. While the increase is not large by percentage points, it was not fueled by the pandemic like others that rose on the list. On the other side of the coin, 27% of respondents are not concerned about climate change, and six in ten do not have it figured into their strategic risk management.
Cybersecurity has become a top concern, mentioned by nearly half of the respondents, up from one-third in 2020. This is likely due to the number of high-profile attacks over the past year. Respondents are also concerned with misinformation. The past year has seen an increase in the use of digital channels for this purpose, especially in the United States.
For all of the insights from the survey we recommend you read the full report. If you need any executive recruiting support as you re-emerge from the pandemic, let us know how we can help.