Economy

CEOs optimistic about economic recovery over the next two years: Report

Our Bureau Mumbai | Updated on May 13, 2021

The survey finds 35 per cent of respondents expect to return to or exceed the 2019 revenue levels this year

More CEOs are anticipating an economic boom (60 per cent) than stagnation (40 per cent) in 2021 and 2022, according to a recent survey of CEOs and senior executives by Gartner, Inc.

According to the survey, 35 per cent of respondents anticipate returning to or exceeding the 2019 revenue levels as early as this year.

“CEOs’ top priorities for 2021 show confidence,” said Mark Raskino, distinguished research vice-president at Gartner. “Over half report growth as their primary focus and see opportunity on the other side of the crisis, followed by technology change and corporate action.”

“This year, all leaders will be working hard to decode what the post-pandemic world looks like and redeveloping mid- to long-range business strategies accordingly. In most cases, that will uncover a round of new structural changes to capability, location, products and business models,” Raskino added.

Digital initiatives in focus

Moving forward, CEOs are prioritising digital initiatives.

“Technology-related change was the second-highest priority for CEOs. When asked about their organistion’s top five strategic business priorities for the next two years, respondents gave answers in their own words. CEOs’ responses increasingly included the simple word “digital,” cited by one in five CEOs in this year’s survey. Digital capabilities were also the only category in which CEOs intended to increase investment in 2021,” the report said.

In terms of the technologies that businesses aim to focus on, CEOs see artificial intelligence (AI) as the most industry-impactful technology.

Over 30 per cent of respondents said quantum computing will be relevant to their long-range business plans but are still not quite sure how, the report said.

Corporate action is another strategic business priority for them. Mergers and acquisitions (M&A) were the most mentioned item, rising 75 per cent year-over-year.

“This shows that CEOs and senior executives seeking advantage from a cyclical downturn are going shopping for structural inorganic growth,” Gartner said.

There was also a significant reduction in mentions of “sales revenue” among CEOs within the growth priority category, and a significant increase in mentions of “new markets” across different industries and company sizes, “suggesting that CEOs are finding it hard to obtain simple incremental sales revenue growth using the strategies that have served them well in the past.”

“Techquisitions can bolster digital business progress, while also providing access to potential fast-growth market sectors,” said Raskino.

Apart from this, over 80 per cent of CEOs expect enduring societal behaviour change owing to Covid-19, such as a permanent shift to hybrid work.

Constrained customer demand

Respondents also expect changes in customer behaviour. Constrained customer demand is one of the biggest concerns among CEOs, particularly in industries such as travel, and that consumers and chief financial officers (CFOs) alike will hold back on related expenditures.

“More use of digital technology and the demand for digital channel flexibility are also within the top three anticipated shifts in customer behaviour. This suggests that continuing to improve the way customers are served digitally will be vital,” said Kristin Moyer, distinguished research vice-president at Gartner.

Separately, matters such as sustainability and social justice are also gaining increased focus.

Thirty-nine per cent of CEOs said taking an active social justice stance is good for business and that their employees are mostly of one mind, while 61 per cent of respondents are tentative around such subjects. In addition,45 per cent of CEOs said climate change mitigation is having a significant impact on their businesses.

The annual Gartner 2021 CEO Survey was conducted between July and December 2020 among 465 actively employed CEOs and other senior business executives in North America, EMEA and APAC across different industries, revenue and company sizes.

Published on May 13, 2021

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