Arthur D. Little (ADL) has launched its 2023 CEO Insights Study, highlighting that the leaders of the world’s biggest companies are confident despite the current turmoil. Sixty-three per cent expect a stable or positive economic outlook over the next three to five years.
Despite the downturn, CEOs are focused on growth – half say they will enter new geographies, and 30 per cent expect to grow faster than the wider market. Even cautious CEOs expect to increase growth investments, with 40 per cent spending more and 55 per cent keeping expenditure constant. At the same time, leading CEOs are becoming truly ambidextrous, combining this innovation with laser focus on cost optimisation.
CEO confidence in the future can be attributed to the lessons learned from the pandemic, which forced many businesses to transform their operations. Ninety-one per cent of CEOs understand that developing fit-for-purpose capabilities that drive optimisation and efficiency, as well as innovation and growth, are now mission critical. This is likely to lead to a different capability mix enabling companies to unleash their full potential moving forward.
However, there are differing pictures between regions. Thirty-eight per cent of European CEOs in the top five economies of France, Germany, Italy, Spain, and the UK expect to see a positive economic outlook over the next three to five years, against just 25 per cent of those in North America and 10 per cent in Asia.
CEOs see technology innovation as the most critical factor to company growth, and are moving beyond digitalisation to embrace technologies such as AI, robotics and automation. They are also looking forward – 60 per cent want to explore new technologies, and 27 per cent believe the metaverse and virtual reality will impact their business.
Hearteningly, ADL writes, 80 per cent of CEOs believe focusing on ESG delivers competitive advantage, rather than simply being a compliance cost. In fact, 41 per cent of CEOs rank it as a higher priority than all other initiatives.
Francesco Marsella, Managing Partner and Global Practice Leader, Strategy & Organization at Arthur D. Little, comments: “In a downturn, conventional business wisdom is to cut costs and focus on survival. Despite current challenges and many dark macroeconomic predictions for 2023, most CEOs we spoke to are optimistic for the future, working with passion, entrepreneurship, and creativity to manage performance today while building for the future. They see opportunity in adversity, looking beyond the current crisis to embrace a more positive future for their companies and wider society.”