PwC has released its twenty-sixth Annual Global CEO Survey, carried out by interviewing 4,410 CEOs (of which 112 Italian) in 105 countries; nearly two-thirds of Italian CEOs (63% vs 73% globally) expect a drop in global economic growth in the next 12 months.
45% of Italian CEOs believe that your business will not be economically viable within the next 10 years if it continues to develop according to current models, compared to 40% globally.
The concern about economic unsustainability is common among CEOs of different industriesincluding telecommunications, manufacturing, healthcare and technology.
Globally, the trust of CEOs in the his company’s growth prospects declined compared to last yearrepresenting the most significant drop since the 2008-2009 financial crisis.
The G7 economies, strongly affected by the current energy crisis, are more pessimistic about their prospects for national growth compared to the performance of the global economy.
For Italian CEOs, the most impactful challenges for corporate profitability it will be regulatory changes, changes in customer demand, skills shortages, technology disruption and the transition to new energy sources.
Andrea Toselli, President and CEO of PwC Italia, commented: “The awareness of Italian CEOs of the challenges that await them is different from the past and this makes them more responsive. They understood the importance of focusing to face challenges of today, which derive from more articulated and unstable scenarios than in the past”.
Between inflation and geopolitical risks
Italian CEOs consider the impact of the economic crisis as their main concernwith inflation and macroeconomic volatility at the top of their agenda over the next 12 months.
In the next five years cyber risks, geopolitical conflicts, macroeconomic volatility and climate change are among the major concerns.
The war in Ukraine and geopolitical issues have led Italian CEOs to rethink some aspects of their business modelsfor example, integrating a wider range of disruption scenarios into operational planning, increasing investments in cybersecurity and data privacy, diversifying its product and service offering, reevaluating its market presence or adjusting its supply chain.
Italian CEOs are trying to cut costs and stimulate revenue growth in response to the current economic climate. 62% of Italian CEOs have diversified the offer of products and services, 57% have reviewed their commercial policy and 55% have reduced operating costs.
However, most does not foresee a reduction in the workforce over the next 12 months and almost all will not cut staff pay to retain talent and mitigate attrition rates.
Manage climate risk
Climate change is a major concernwith an estimated impact on company cost profiles, supply chains and tangible fixed assets.
Most Italian CEOs have already implemented or intend to implement initiatives for pursuing innovation with new, climate-friendly products and processesto reduce emissions from their companies and to develop a data-driven strategy to mitigate climate risks.
In terms of reducing emissions, only 22% of Italian companies have already developed a strategy in this regard, but a higher share of Italian CEOs declares that they have started projects in this direction.
Italian CEOs recognize the need to collaborate with diverse stakeholders to build trust and ensure lasting results. The decision to collaborate with non-profit organizations is aimed at addressing issues such as sustainable development, education and diversity, equity and inclusion.
To remain economically viable, companies must invest in technological transformation and in its own human capitalthrough the automation of processes and systems, advanced technologies and training programs.
Despite this, the CEOs yes question organizational empowerment and entrepreneurshipand only a minority say that their company’s leaders make strategic decisions on their own and are tolerant of small-scale failures.
