New ways to compete
Given the scale of the challenges and uncertainties that today’s CEOs face in global markets, it’s little wonder that the one ‘must-have’ attribute they point to for future success is adaptability.
It’s clear that in 2015, disruptive change will affect all global markets. But while CEOs are less confident overall about the prospects for the global economy, many believe that there are significant opportunities for their own business to grow in the year ahead.
Macroeconomic trends are continuing in the direction we highlighted in last year’s survey. While overall, global growth prospects could best be described as modest, there are pockets of greater dynamism. Mature markets – particularly the US, which for the first time in five years ranks above China as CEOs’ key market for growth – look likely to offer the best prospects in the near term.
The emerging economies – notably the BRICS, which have been such powerful engines of expansion – are now grappling with political and structural challenges. However, underlying drivers of growth, such as youthful populations and a fast-growing middle class, make many emerging economies attractive prospects for the future.
The challenge for CEOs, in such a fast-changing environment, is where to place their bets.
It’s not simply economic fundamentals that worry CEOs.
Over-regulation is cited by 78% as a concern. And these concerns are not limited to industry-specific regulations but go much broader into areas like trade and employment.
Cyber threats have increased markedly and are likely to become even more prominent in the wake of the recent high-profile attacks on entertainment networks.
The rapid pace of technological change – seen as a challenge by 58% of CEOs – is also highlighting a shortage of key skills that could imperil growth.
But CEOs no longer question the pace of technological change, as they learn to deal with it. The majority of CEOs believe that investments in digital technologies have created value for their business, and around 80% say that mobile technologies and data analytics are key strands of their strategy.
The challenges thrown up by these changes are set against a competitive landscape that is also rapidly and radically reshaping.
Competition is now coming from new and previously unseen sources. A wide range of industries is being disrupted by regulatory changes, increasing competition and new patterns of consumer behavior.
With that in mind, one-third of CEOs say they have entered new industries in the last three years, and more than half (56%) believe that organisations will increasingly be competing in new sectors in the next three years.