ASEAN CEO Confidence in business growth has been on the decline from 2015 to 2017 (2015: 47%; 2016: 38%; 2017: 32%); only 26 percent of CEOs in Singapore are “very confident” of business growth in 2017. These are findings according to PwC’s 20th annual survey of CEOs worldwide.
The ASEAN CEOs surveyed ranked Singapore as the most important city for their organisation’s growth (37 percent). This comes against the backdrop of CEO confidence in growth prospects that are rising slowly around the world but dropping in ASEAN.
Yeoh Oon Jin, Executive Chairman, PwC Singapore, comments: “While regional CEO confidence levels are low, with Singapore being one of the most open economies in the world, any signs of optimism across the globe could lead to positive knock-on effects for us.”
“This is reflected clearly in this year’s survey results which show that Singapore (37 percent) is the most important city named by ASEAN CEOs for their organisation’s overall growth prospects, ahead of Kuala Lumpur (23%), Jakarta (23%), New York (13%), London (12%), Beijing (12%), and Hong Kong (12%).”
Confidence in revenue growth slips
These findings were released at the World Economic Forum in Davos. It shows that while business leaders in most parts of the world are more positive in their outlook, ASEAN CEOs’ confidence in revenue growth on the other hand are at a three-year low (2015: 47%; 2016: 38%; 2017: 32%).
In Singapore, although 50 percent of Singapore CEOs are “somewhat confident” of revenue growth over the next 12 months, only 26 percent are “very confident”. When asked about the longer term of three years, 56 percent of Singapore CEOs are “very confident”.
Globally, CEOs are most concerned about economic uncertainty, over-regulation and geopolitical uncertainty (74%). ASEAN CEOs view uncertain economic growth (83% vs 82% global), exchange rate volatility (82% vs 70% global) and over-regulation (78% vs 80% global) as the top threats.
Singapore CEOs’ top concerns are uncertain economic growth (88%), over-regulation (85%) and terrorism (85%) and protectionism (79%).
Globally, 29 percent of CEOs surveyed believe global economic growth will pick up in 2017 while a worrying 35 percent of ASEAN CEOs and 32 percent of Singapore CEOs think global economic growth will decline.
When asked what drives growth, almost three-quarters (74 percent) of Singapore CEOs indicate organic expansion, followed by cost reduction and strategic joint venture or new alliance will drive growth.
47 percent Singapore CEOs indicate a new M&A. Organic expansion tops the agenda for a high 82 percent of ASEAN CEOs in the coming year, while 67 percent plan a cost reduction. 62 percent of ASEAN CEOs indicate that they are planning a new strategic alliance/joint venture.
Where CEOs will look for growth
PwC’s first global CEO survey showed emerging markets ‑ including China and India ‑ as a sure bet for success. But the changeability of markets, exacerbated by currency volatility, has caused CEOs around the world to turn to a greater mix of countries. This year’s survey shows the US, Germany and the UK have become bigger priorities, while enthusiasm for investing in Brazil, India, Russia and Argentina has lessened from three years ago.
Singapore CEOs’ views on top five most important countries for growth are China, Indonesia, USA, Malaysia and UK. Globally, the top five most important countries for growth identified are USA (1), China (2), Germany (3), the UK (4) and Japan (5).
Singapore emerged as the most important city for an organisation’s growth identified by ASEAN CEOs, followed by Kuala Lumpur (tied 2), Jakarta (tied 2), New York, (4), London and Beijing (tied 5). Globally, New York, London, and Beijing were also identified as the top four cities most important to an organisation’s overall growth prospects over the next 12 months.
See: CEOs in Asia Prioritise Soft Skills over Hard Skills for Businesses in Future
Technology and Trust
Across the world, CEOs tell us that technology is now inseparable from business’ reputation, skills and recruitment, competition and growth. Almost two-thirds or 56 percent of Singapore CEOs believe technology has either completely reshaped or will have a significant impact on competition in their industry over the next five years alone.
In an increasingly digital-driven world, technology has created a new dynamic between business and customers bringing huge benefits for both. However on the flip side 68 percent of Singapore CEOs and 63 percent of ASEAN CEOs cited breaches of data privacy and ethics, 59 percent of Singapore CEOs and 52 percent of ASEAN CEOs cited cyber security breaches. Interestingly, 41 percent of Singapore CEOs also cited risks from use of social media.
50 percent of Singapore CEOs said that they were addressing breaches of data privacy and ethics to a large extent, while 44 percent said they were addressing IT outages and disruptions. 52 percent of ASEAN CEOs said that to a large extent they were addressing breaches of data privacy and ethics, while 48 percent were addressing IT outages and disruptions.
After several high-profile technology and security issues for big companies, CEOs not surprisingly identify cyber security, data privacy breaches and IT disruptions as the top three technology threats
to stakeholder trust at a global level.
“CEOs expect it to become harder to sustain trust in the digital era. We believe competitive advantage will go to those with the greatest capacity to turn technology into their strength when coupled with the ability to connect with their stakeholders in an on-going relationship which is grounded in trust,” added Yeoh Oon Jin added.
Skills and jobs
An impressive 63 percent of ASEAN CEOs expect to increase headcount in the next 12 months, with 13 percent planning to cut their workforce. In Singapore, 56 percent of CEOs expect to increase headcount in the next 12 months, with 18 percent planning to cut their workforce. This is against the muted growth and economic confidence in ASEAN.
When asked about their talent strategy, a high 91 percent of Singapore CEOs said they promote talent diversity and inclusiveness, 88 percent said they use technology to improve their people’s wellbeing, 85 percent said they move talent to where they need it and have changed their people strategy to reflect the skills and employment structures we need for the future. 82 percent said they seek out the best talent regardless of demographics or geography.
88 percent of ASEAN CEOs said they promote talent diversity and inclusiveness, 83 percent said they move talent to where they need it, 82 percent said they have changed their people strategy to reflect the skills and employment structures needed for the future, 80 percent use technology to improve their people’s wellbeing, and 80 percent said they seek out the best talent regardless of demographics or geography.
Skills availability is a concern for over three quarters (77 percent) of business leaders across the globe, and is highest for CEOs in Africa (80 percent), and Asia Pacific (82 percent).
Globally, over half of business leaders interviewed (52 percent) are already exploring the benefits of how humans and machines can work together, and two out of five (39 percent) are considering the impact of artificial intelligence on future skills needs.
Singapore CEOs overall believe that problem solving, adaptability, collaboration and leadership were important to their organisations. This was followed by risk management (94 percent), and creativity and innovation and emotional intelligence indicated by 91 percent of Singapore CEOs.
Yeoh Oon Jin concludes: “Innovation coupled with technology is the way forward. However, in order to innovate effectively, in addition to the technology itself, we cannot discount the human element because creativity cannot be coded or programmed. In Singapore, tech talent are plentiful, however, creativity and innovation together with the additional ingredient of emotional intelligence are keys for success.”
Also read: CEOs Expect Global Hiring to Increase over the Next 3 Years
