South Africa’s CEOs are more optimistic about global growth than they were a year ago and the proportion that thinks the global economy will improve has increased by 35% since 2011.
However, while their views on the global economy may be positive, South Africa’s CEOs show less confidence about their own company’s short-term prospects.
Tom Winterboer, PwC Financial Services Leader for Africa, says, “Global CEOs feel more positive about their ability to increase their revenue growth and about prospects for the economy now that they are emerging from the global recession. However, CEOs also acknowledge that sustaining growth in the post-crisis economy remains a challenge.”
“Worries also continue to loom for many South Africa CEOs as they continue to contend with concerns such as over-regulation, exchange rate volatility, the slowdown in high-growth markets and inadequate basic infrastructure.”
The global survey results, based on interviews with 1,334 CEOs from 68 countries, were released at the World Economic Forum annual meeting in Davos yesterday. In South Africa, interviews were held with 105 CEOs from a broad spectrum of listed and privately-owned companies.
“CEOs are coming out of survival mode but the search for growth is getting increasingly complicated as the global economy gradually rebalances itself,” says Winterboer.
The advanced economies are mending, while some emerging economies are slowing down. Global CEOs are turning back to certain advanced economies for growth opportunities. China and the US top the list of markets most important for overall growth prospects, followed by Germany, Brazil and the UK. Beyond Brazil, Russia, India, China and South Africa, CEOs believe Indonesia, Mexico, Turkey, Thailand and Vietnam offer the best growth prospects in the next three to five years (after the US).
Nearly half of CEOs (43%) named other African countries as most important for their prospects for growth in the next 12 months, 29% named China and 23% the US.
Trends that will transform business
Globally a large number of CEOs identified three mega trends that will transform their businesses in the next three to five years:
- 81% technological advances
- 60% demographic changes
- 50% a shift in global economic power
Local CEOs (60%) also mention urbanisation as a mega trend. “These trends aren’t new. What has changed is the pace at which they are unfolding,” adds Winterboer.
Just as technological advances, demographic changes, urbanistion and economic shifts will create new opportunities for innovation and growth, they will also raise many new challenges.
This year, 77% of South African CEOs say they have implemented cost cutting measures and 49% expect to do so in the coming year. This appears to be in line with global norms.
Winterboer concludes, “Global trends are challenging companies to have a hybrid set of leadership skills.Today’s CEOs must be hybrid leaders capable of running the business of today while looking into the near and far distance, combining the best of the old with the new, and piloting their organisations through enormous changes to make them fit for the future.”
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