Nearly three-quarters (78%) of Indian CEOs believe global economic growth will decline over the next 12 months.
However, almost six in ten Indian CEOs (57%) express optimism about India’s economy over the next 12 months. In comparison, only 37% of Asia Pacific CEOs and 29% of global CEOs expect economic growth to improve in their countries or regions over the next 12 months.
41% of India CEOs think their organisations will not be economically viable in a decade
In addition to a challenging environment, 41% of CEOs think their organisations will not be economically viable in a decade if they continue on their current path.
62% of Indian CEOs, in particular, believe that changing customer demand will impact profitability in their industry over the next ten years to a large or very large extent, while 54% are concerned about changes in regulations.
Globally, business confidence around economic growth varies starkly, with G7 economies – all weighed down by an ongoing energy crisis – more pessimistic about their domestic growth prospects than they are about global growth: France (70% vs 63%), Germany (94% vs 82%) and the UK (84% vs 71%).
Inflation, macroeconomic volatility, climate change, and geopolitical conflict are top CEOs’ concerns
While cyber and health risks were the top concerns a year ago, the impact of the economic downturn is top of mind for India CEOs this year, with inflation (35%) and macroeconomic volatility (28%) leading the risks weighing on CEOs’ minds in the short term – the next 12 months – and over the next five years.
Climate change is close behind (24%), followed by financial exposure to geopolitical conflict risks (22%) and cyber risks (18%).
CEOs are cutting costs but not headcount or compensation
While cost cuts are high on the priority list globally, 85% of India CEOs do not plan to reduce headcount, and 96% do not plan to reduce compensation – demonstrating their resolve to retain talent.
Managing climate risk is a growing priority for businesses
Climate change gains prominence as a cause of concern for India CEOs over the next five years, with 31% voicing that they believe their companies will be extremely/highly exposed to it. They also see climate risk impacting their cost profiles and supply chains over the next 12 months. Indian companies are therefore trying to innovate, decarbonise and craft their climate strategy.
Many companies are embarking on the journey to address climate risks and decarbonisation without the information provided by an internal pricing mechanism for carbon.
In India, 34% of companies (more than 50% globally, which includes 38% of the biggest companies globally) say that they have no plans to apply an internal carbon price to decision-making.
This could be a strong lever to account for considerations such as taxes and incentives, and leverage strategic trade-offs. 72% (60% global) have implemented or are implementing initiatives to reduce their company’s emissions and 60% (61% global) are innovating new, climate-friendly products and processes.
The continued importance of trust and transformation in generating long-term value
73% (54% global) of Indian CEOs collaborate with non-business entities to address sustainable development. while 57% (49% global) of CEOs collaborate on education. 31% of Indian companies are more likely to collaborate with industry consortia to create new sources of value, while only 22% work with industry consortia to address societal issues.
22% (23% global) of India CEOs say leaders in their company often/usually make strategic decisions for their function without consulting the CEO. Only 51% (46% global ) of India CEOs say leaders in their company tolerate small-scale failures often/usually. However, more optimistically, nearly 93% (85% global) of respondents say the behaviours of employees are often or usually aligned with their companies’ values and direction.
The survey highlights the need for CEOs and their leadership teams to drive change and business reinvention from top to down in the years ahead.
According to PwC’s 26th Annual Global CEO Survey, which polled 4,410 CEOs in 105 countries and territories, including 68 from India between October and November 2022.