For both UK and global CEOs, cyber security threats and access to appropriate skills were the top two business concerns. In the UK, cyber security is now number one on the boardroom agenda, with 87% of CEOs making it a key focus area. 83% of UK CEOs are concerned about availability of key skills, nearly the same figure as the global average of 80%, which reflects an upward trend over the past few years. In 2013, for example, the figure was only 64% in the UK.
These responses may reflect a growing emphasis on digital technology as a fundamental part of business strategy. Concerns about cyber security and specialised skills have reached the boardroom because all businesses are now digital businesses, showing that UK CEOs are alive to the game-changing potential of Intelligent Digital for their organisations.
"The security breaches in 2017 have really heightened awareness amongst UK CEOs to the devastating impacts of a cyber attack. The challenge of protecting organisations today requires CEOs to lead the way in redesigning how they are structured and operated, to be securable."
UK CEOs understand the importance of technology for their own business outcomes in the near future, with 69% of them believing that emerging technologies, such as Artificial Intelligence, Blockchain and Robotics will disrupt their current business models in the next five years. Interestingly, this figure is actually a little higher than the global average, which stands at 64%.
70% of UK CEOs also believe that changes to customer behaviours will be disruptive to their businesses over the next five years, which is slightly higher than the global norm of 68% (though again lower than the figures for China and the US, which are 85% and 83% respectively). CEOs clearly understand that emerging technologies will be disruptive, but that they also open up many new opportunities. PwC’s research shows that Artificial Intelligence could add £232 billion to the UK economy by 2030, through gains to productivity and product enhancements which will stimulate customer demand.
Businesses worldwide are confident about their own growth prospects, irrespective of their concerns about the rise of disruptive technologies. In the UK, for example, 88% of CEOs expect their own businesses to grow this year, while China and the US beat even this very positive figure, with responses of 94% and 95% respectively. Views on long-term prospects for individual businesses are even more positive, with 96% of UK CEOs confident of growth for their own companies over the next three years. This is even higher than the global average and reflects growing optimism within UK businesses.
UK CEOs are distinctly optimistic about the short to medium term growth prospects for their own businesses, and it is interesting to see how this positive view of the future translates into the strategic actions needed to turn optimism into results.
A higher proportion of UK CEOs see organic growth as the key driver for success than the global average (87% against 79%). Cost reduction is also an area where UK CEOs appear to be more strongly focused than their global peers. 67% of UK respondents make this a high priority, slightly higher than the global average (62%). As the pace of disruption increases, the capabilities required for success also transform, and the pressure to free up resources through cost-cutting follows. We would expect a strong focus on cost within such a context, all the more so with the pressure that sterling depreciation puts on imported inputs.
Real differences can be seen in other areas of activity. UK businesses seem less likely to collaborate with a start-up or entrepreneur (just 20% of CEOs rate this as a likely driver for growth, as opposed to 33% globally), while UK CEOs are slightly less likely to drive growth through M&A activity or from outsourcing (though this last factor may reflect the fact that the UK outsourcing market is now very mature).
In markets that are extremely fast-moving or with very aggressive growth agendas (such as China and in some industry sectors the US), there appears to be a higher appetite for collaborating with innovative start-ups and looking into the prospects of new strategic partnerships (in this last area, 67% of Chinese companies expect to achieve growth through strategic partnerships, as opposed to 42% of UK businesses).
In summary, CEOs know disruption from technology is inevitable. To stay one step ahead, business need to look beyond the obvious and disrupt themselves before they are disrupted. Those that can balance business understanding with technological innovation and the right human skills and insight, will be the ones to thrive in the digital revolution
Source: PwC's 21st CEO Survey