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      Top CEOs see through global turbulence by betting big on AI

      Navigating a decade of disruption: Ten years of the KPMG CEO Outlook research shows CEO confidence in their organization’s future, despite geopolitical and economic volatility.

      From the race to embrace artificial intelligence (AI) to ever-mounting geopolitical concerns, the challenges faced by the CEOs of today are vast and complex. Alongside these external pressures, internal challenges such as upskilling the workforce and hybrid working are pushing CEOs to be agile and adaptable in their stakeholder management while also keeping an eye on long-term growth.

      First launched globally 10 years ago, the KPMG CEO Outlook surveys more than 1,300 global business leaders overseeing companies with revenues of at least US$500M from some of the world’s biggest economies and key industries.

      The last 10 years have been defined by volatility, ranging from the economic and social shockwaves of the COVID-19 pandemic to the resurgence of inflation and geopolitical tensions. In the face of this, leaders have had to adapt to an unprecedented array of challenges that have not only placed greater pressure on CEOs’ shoulders but driven a waning of confidence in the global economy.

      Yet, global leaders remain resilient, leading their businesses on a path to sustainable growth. Global leaders continue to create a solid foundation by betting big on AI and bolstering their workforce to adapt to evolving business needs. This year’s survey shows that CEOs are optimistic about their organization’s future, with 92 percent of leaders looking to increase the overall headcount of their workforce, but also recognizing they need to future proof the skillsets of their people and demonstrate increased employee value proposition to attract and retain talent. Balancing ambition and appropriate caution will be key when it comes to ESG issues if CEOs want to avoid stakeholder criticism and, more importantly, do the right thing.

      “The last ten years has been framed by a backdrop of volatility and change, from a global pandemic to surging inflation and the rise of AI. In the face of such pressures, CEOs are steadfast about the need to invest in the future. Turbulence calls for leaders to be more resilient, agile and innovative than ever before. As we look ahead to the next ten years, CEOs who set bold strategies to adapt to our fast-changing world and invest in the right technologies and talent to make their plans a reality, can deliver sustainable, long-term growth.”

      Bill Thomas

      Global Chairman & CEO

      KPMG International

      Bill thomas

      Economic outlook

      Business growth challenged by the pace of technology
      man on tablet

      Over the past decade, the confidence of CEOs in the global economy has waned, reflecting the growing complexities of the environment they face. While confidence has remained relatively stable over the past three years, with 72 percent of CEOs optimistic about the economy, this marks a significant shift from the robust 93 percent seen in 2015 when the survey first launched. 

      CEO confidence in the global economy (2015-2024)

      The growing complexity and variety of demands of leading a large organization are being felt keenly by CEOs, with almost three quarters (72 percent) confessing they feel under more pressure to ensure the long-term prosperity of their business.

      This additional pressure felt by CEOs could be attributed to an evolving list of threats to business growth with this year’s survey showing that CEOs are the most concerned about the impact of supply chain disruption, and operational issues on their business’ growth in the next three years, coming in above cyber security and even last year’s number one threat – geopolitics and political uncertainty.

      How 2024’s top threats to growth have evolved over the last ten years

      *Note 1 equals the top risk.

      Top risks over the last ten years

      • Cyber security
      • Operational issues
      • Emerging/disruptive technology
      • Geopolitics/political uncertainty
      • Environmental/climate change
      • Supply chain
      • Regulatory concerns
      • Strategic risk
      • Reputational/brand

      Ten years of survey data demonstrates how leaders have sought to create confidence in business growth, from increased investment in innovation and tech, to placing a fresh focus on the employee value proposition and renewing their commitment to ESG and sustainability as a source of value creation. Looking more closely at the next three years, respondents identified their top operational priorities as advancing digitization and connectivity across their business (18 percent), understanding and implementing generative AI across the business and upskilling their workforce (13 percent), and execution of ESG initiatives (13 percent). By futureproofing their business for a digital world and focusing on fostering and retaining great talent, CEOs not only address their immediate operational needs but also position their organizations for sustainable, organic growth.

      man on tablet
      "When KPMG first launched CEO Outlook ten years ago, AI technologies simply weren’t something people were talking about. Fast forward to today, and it’s now front and center for business leaders, with workforces eager to embrace the seemingly endless possibilities the technology creates. While I’m encouraged that the CEOs surveyed are taking AI so seriously and investing in innovation and technology, it’s important that the rush to adopt doesn’t come at the cost of genuine, ethical and transformative implementation. AI can add value to every aspect of business, but all employees need to be part of that journey. With the right upskilling and a focus on unlocking the true potential of AI, there’s an opportunity for the business community to play a major role in shifting the world’s economies back toward a trajectory of long-term, sustainable growth.”

      David Rowlands

      Global Head of AI, KPMG International

      david-rowlands

      Talent

      CEOs doubling-down on the return-to-office debate
      man on tablet
      “This year’s findings highlight a widening gap between the expectations of CEOs and their employees. The world is changing at pace and the employee-value-proposition is changing with it. The successful leaders of tomorrow will be those who understand that their talent dilemma can only be solved by investing in, nurturing and supporting talent through a ‘social contract’ that understands today’s employees don’t just desire, but expect a more agile, flexible working environment and a better work-life balance – especially in the midst of a pervasive cost of living crisis.”

      Nhlamu Dlomu

      Global Head of People

      KPMG International

      Nhlamu Dlomu

      ESG

      Navigating an increasingly politicized landscape
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      This year’s findings expose the reality of navigating environmental, social and governance priorities in today’s climate. Alongside a growing awareness of ESG’s impact on trust and reputation, the increasingly politicized nature of the ESG agenda is heightening the pressure felt by today’s leaders.

      In 2015, CEOs ranked environmental risk as their least concerning priority risk; fast-forward to 2024 and almost a quarter (24 percent) acknowledged that the principal downside of failing to meet ESG expectations would be giving their competitors an edge, coming out ahead of threat to their own tenure (21 percent) and recruitment challenges (16 percent).

      It’s clear that leaders are willing to take action when it comes to ESG, with three quarters (76 percent) of CEOs saying they would be willing to divest a profitable part of the business that was damaging their reputation. More tellingly, a majority (68 percent) indicate that they would take a stance on a politically or socially contentious issue, even if the Board raised concerns with them doing so. The survey also shows that today’s CEOs recognize just how vital ESG is to value creation — just under a quarter (24 percent) cite giving their competitors an edge as the principal downside of failing to meet ESG expectations.

      Two-thirds of CEOs admit they aren’t prepared to withstand the potential scrutiny and expectations of shareholders when it comes to ESG, suggesting they will take action to mitigate this. Interestingly, there are emerging generational differences among CEOs, with 43 percent of younger leaders (aged between 40 and 49) feeling more confident they can take on scrutiny around ESG compared to 33 percent of CEOs aged 50-59 and 30 percent of those aged 60 to 69.

      We’re also seeing a growing level of politicization and polarization of issues such as social mobility and climate change, and it’s creating challenges for CEOs who are already under pressure to meet or reassess established targets. As a result, some global CEOs are shifting how they communicate their ESG efforts. In this year’s survey, 69 percent reveal that while they’ve retained the same climate related strategies over the last 12 months, they’ve adapted the language and terminology they use internally and externally to meet changing stakeholder needs. For example, political and social forces have pushed some businesses to change the language they use, with some organizations preferring to use general terminology such as “sustainability” over the more encompassing term of “ESG.” 

      CEOs' perspectives on ESG

      Finally, 30 percent say the greatest barrier to achieving their climate ambitions is the complexity presented by the decarbonization of their supply chain — an issue further compounded by current geopolitical tensions around the world and activities impacting major global trade routes. As we head into 2025, it will be interesting to see how this impacts opinions and organizations overall, as ESG reporting begins to take hold across the globe. 

      Sector outlooks

      This report highlights key insights from the KPMG 2024 Asset Management CEO Outlook survey.
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      This year’s KPMG 2024 Banking CEO Outlook examines how today’s business leaders within the sector are facing multifaceted and relentless challenges
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      Consumer and retail CEOs share their views on economic outlook, ESG and generative AI.
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      Explore the issues that matter most to private companies.
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      Explore how leaders in Energy, Natural Resources, and Chemicals are navigating a turbulent landscape with confidence and strategic clarity.
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      Industrial manufacturing and Automotive CEOs share their views on economic outlook, return-to-office, ESG and generative AI.

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      This report highlights key insights from the KPMG 2024 Infrastructure and Transport CEO Outlook survey.
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      Insurance CEOs share their views on economic outlook, return-to-office, ESG and generative AI.
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      Exploring CEO views on economic growth, technology investments, ESG and workforce
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      Cautious optimism backed by strategic planning
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      Methodology

      About the KPMG 2024 CEO Outlook

      The 10th edition of the KPMG CEO Outlook, conducted with 1,325 CEOs between 25 July and 29 August 2024, provides unique insight into the mindset, strategies and planning tactics of CEOs.

      All respondents have annual revenues over US$500M and one-third of the companies surveyed have more than US$10B in annual revenue. The survey included leaders from 11 markets (Australia, Canada, China, France, Germany, India, Italy, Japan, Spain, the United Kingdom and the United States) and 11 key industry sectors (asset management, automotive, banking, consumer and retail, energy, infrastructure, insurance, life sciences, manufacturing, technology and telecommunications).

      NOTE: Some figures may not add up to 100 percent due to rounding.