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Global CEOs increasingly optimistic

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Global CEOs increasingly optimistic

Growth is expected to be uneven; emerging markets to slow.

A report issued today by global professional firm PricewaterhouseCoopers indicates that CEOs around the world are feeling a little better about the global economy – and their own companies’ prospects – in 2014.

According to the report, the number of CEOs who believe that the global economy will improve over the next 12 months has doubled to 44%, compared to the previous year. Only 7% of CEOs, compared with 28% last year, think that things will get worse in the year ahead. CEOs are also feeling better about their own companies’ prospects, with 39% now very confident of revenue growth in 2014.

CEOs are also challenged to decipher some very mixed signals about the global economy.The report indicates, however, that CEOs are also challenged to decipher some very mixed signals about the global economy. Last year, the advanced economies were struggling, while the emerging economies surged. This year, the advanced economies are mending, while growth in some of the emerging economies is decelerating.

“Our findings show that nearly a third of [CEOs] are focusing on opportunities for growth in the countries where they already do business, with just 14% planning to explore new geographic markets,” said Dennis Nally, Chairman of PricewaterhouseCoopers Internation, in commenting on the findings. “Many are also revising the portfolio of overseas markets where they will concentrate their efforts. As well as turning to the US to a greater extent than last year, they believe Germany and the UK now look more promising than some of the BRICS economies.”

The report also identifies three global trends – technological advances, demographic changes and shifts in economic power – that CEOs expect to have a significant impact on their businesses over the next five years.

“Quite simply, everything is now in flux – from where and how people live and work, to the wider social and political contexts in which companies interact with their stakeholders,” Nally said. “These developments will create many new opportunities for innovation and growth. But to seize these opportunities, companies must be ready to radically reassess how they function. In this new world, the very purpose of business – not just its practices – will come into question.

“We believe organisations must overcome three particular challenges in their race to become fit for the future. They’ll need to harness technology to create value in totally new ways; capitalize on demographic shifts to develop tomorrow’s workforce; and, just as important, understand how to serve increasingly demanding consumers across the new economic landscape.

“CEOs recognise that as these trends unfold, the demands placed on them will increase exponentially. They will have to encourage innovation that’s both radical and methodical; connect with employees and consumers who don’t look, think or act like them; experiment with new operating models while preserving existing efficiencies; and deliver value without compromising on quality or integrity. In short, CEOs will have to become hybrid leaders who are comfortable straddling two worlds – drawing on the best of the old while operating at the frontiers of the new.”

To read the full report, click here.

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