After three years of navigating economic uncertainty and complex challenges, business leaders are increasingly optimistic about the economic and business environment and their companies’ ability to mitigate risk, according to the latest PwC Pulse survey: Focused on reinvention. Only 17% of business leaders strongly agree there will be a recession in the next six months. And while executives are still concerned about cyberattacks, talent, and the U.S. regulatory environment, they view these as less of a risk today than a year ago.
The top-cited risk still on executives’ radar is frequent and/or broader cyber attacks, with 74% saying it is a serious or moderate risk. In addition, while business leaders appear hopeful about a soft landing, the future of what the economy looks like is still a question. More than a quarter (28%) of executives cite margin pressure affecting earnings as a serious risk.
As businesses see external risks ease, they are focusing inward to transform and reinvent their companies for the future. Executives are strategically channeling their investments into technology and transformation with over one in two leaders saying they will invest in new technologies (59%) and 46% saying they will invest in generative AI (GenAI) specifically in the next 12 to 18 months. Given AI has been predicted to contribute a notable amount to the global economy in the near future, there is an opportunity here for even more executives to opt in now and invest in the technology or risk falling behind.
“Business leaders have continued to demonstrate resilience and adaptability while navigating a complex environment in recent years,” said Neil Dhar, Vice Chair – US Consulting Solutions Co-Leader, PwC US. “As worries about the economy ease, executives are increasingly comfortable future-proofing their businesses by pursuing investment alternatives focused on growth and operating model efficiencies — all underpinned by technology and a focus on delivering outcomes for their stakeholders.”
Looking at the next three to five years, embedding new technologies into their business model is the top-ranked strategic priority—but it also creates the most challenges. Business leaders’ top challenges to their companies’ ability to transform largely center around tech, including achieving measurable value from new tech (88%), the cost of adoption (85%), and training talent (84%).
As executives continue to focus on business transformation and growth, they’re shifting their attention toward developing and retaining current talent following past cycles of hiring and subsequent layoffs. Many are prioritizing upskilling initiatives and improving benefits, with more than six in 10 executives saying they have implemented or plan to expand mental health benefits (64%), train employees on new technology (64%), or increase compensation for existing employees (60%).
To view the full report, visit www.PwC.com.