Technology continues to significantly impact the board agenda
Irish CEOs see three important threats to growth with cyber security, a return to territorialism worldwide and operational risk as the biggest challenges to their business.
Meanwhile near unanimity (96 percent) amongst Irish CEOs that Artificial Intelligence (AI) will create more jobs than it destroys.
Irish business leaders are confident their companies will grow over the next three years, despite facing challenges from the threat of cyber attack, geopolitics and generational shifts, according to the 2018 KPMG CEO Outlook.
The survey, which garnered insight from Irish CEOs and compares them with 1,300 of their global peers, found a pragmatic group of leaders who are determined to put strategies in place to overcome these ‘growing pains’ and to personally drive digital transformation and the transition of the workforce for the digital age.
Shaun Murphy, Managing Partner at KPMG Ireland said: “Ireland’s CEOs are leading their businesses at a time of great change. Our survey shows they are having to be agile in order to meet the challenges with growing threats such as cybersecurity and potentially valuable tech driven opportunities both firmly on the board agenda."
The report, which surveyed CEOs across many of the world’s largest and most complex businesses, showed that expectations for business growth are relatively modest in Ireland. Most (72 percent) of Irish business leaders predict an uplift of under 2% over the next three years and just 24 percent expect growth of 2-5 percent. Meanwhile, just over two thirds of respondents (68 percent) expect headcount growth of under 5 percent.
Reinforcing the extent to which cyber security is impacting on their thinking, the survey found a third (32 percent) see the issue of a cyber-attack as a case of "when" not "if" with only 48 percent confident in their ability to identify new cyber threats and only 44 percent confident in their levels of preparedness. Meanwhile just over a half (56 percent) feel able to manage external stakeholders in the event of such an attack.
Concerns about a return to territorialism were highlighted in a number of countries and also cited as one of the most important issues for business leaders in the Ireland. According to KPMG’s Shaun Murphy; "Brexit, US tax policy and the threat of protectionism in the form of trade wars have all moved geopolitical issues up the risk agenda for Irish business with international operations."
Disruption is being welcomed as an opportunity by 96 percent of CEOs in Ireland and, encouragingly, only 16 percent believe their organisation is struggling to keep pace with the rate of technical innovation in their sector. In fact, most (84 percent) believe they are actively disrupting the sector rather than waiting to be disrupted by others.
Meanwhile, over three quarters (76 percent) of CEOs are prepared to personally lead their organisation through a radical transformation to maintain competitiveness. However, one in five (20 percent) have concerns about their current leadership team and whether it is fully equipped to oversee the radical transformation their business needs. According to Shaun Murphy "The commitment of CEOs to keeping up with and understanding the implications of technology has become an even greater acid test of leadership and in a shorter time frame then previously imaginable."
Almost half (48 percent) of those surveyed have already begun a limited application of artificial intelligence (AI) in the automation of processes. However 96 percent believe that the most likely impact of artificial intelligence and robotic technologies will be to create more jobs than it eliminates.
Millennials also weigh heavy on Irish CEO minds. A significant number (40 percent) of those surveyed said understanding how the needs of millennials differ from older customers is a challenge - while almost the same percentage (36 percent) said responding to the expectations of millennials is difficult. Other challenges include appointing senior team members who can better relate to millennials and attracting millennials’ attention amidst competing brands.
The survey covers 1,300 CEOs in markets (Ireland, Australia, China, France, Germany, India, Italy, Japan, Netherlands, Spain, UK and US and 11 key industry sectors (asset management, automotive, banking, consumer and retail, energy, infrastructure, insurance, life sciences, manufacturing, technology and telecoms). A third of the companies surveyed have more than US$10B in annual revenue, with no responses from companies under US$500M. The survey was conducted between 22 January and 27 February 2018. NOTE: some figures may not add up to 100 percent due to rounding.
KPMG is a global network of professional services firms providing Audit, Tax and Advisory services. We operate in 154 countries and territories and have 200,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.