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CEOs are seeking resilience in a disrupted age

Despite the political uncertainty around them, UK CEOs are surprisingly upbeat about the domestic economy. Increasingly, their mission is to control disruption in all its forms – particularly to manage the impact of emerging technologies. Our survey suggests they are embracing the challenge. 

A conflicting global outlook

Despite continuing uncertainty over Brexit, this year our survey shows CEOs in a surprisingly optimistic mood about the UK’s growth prospects over the next three years – after falling for the previous three.

Yael Selfin, Chief Economist at KPMG in the UK, agrees that despite respondents pointing to confidence edging up since the start of the year we are currently living through an unprecedented period of flux. 

“Agility and resilience are extremely valuable right now,” she says. “Businesses need to be prepared to act whenever there's a sharp change of direction.” 

Chart: Confidence in the domestic economy has revived sharply among UK CEOs

% of UK and global CEOs who are confident about the prospects for the UK and global economies over the next three years

In contrast to positivity around the UK, confidence in the global economy over the next three years is plummeting among both UK CEOs and those in most of the 11 countries taking part in KPMG’s global CEO Outlook survey.

While US CEOs were more confident about the global economy than last year (along with Italian, Dutch and Spanish CEOs), our survey pointed to a marked loss of confidence from CEOs in seven of the 11 countries surveyed. 

Chart: Confidence in the global economy is falling in most countries

% of CEOs who are confident about prospects for the global economy in the next three years

Key
2018
2019

Anybody that is seeing climate change as a risk hasn't really understood climate change. It's not a risk, it's a reality

Matthew Wright
Managing Director
Ørsted

Dynamic risk landscape

CEOs face an external risk landscape that is more dynamic than at any time in recent corporate history. However, as in 2018, this year the same big three issues dominate the risk radars of both UK and global CEOs: risks from emerging technology, climate change and a return to territorialism. 

Watching the evolution of climate change in the minds of UK CEOs has been particularly interesting. Two years’ ago not one UK CEO identified it as their top risk to growth, but it has clearly now established itself on the leadership agenda. 

In fact, we found that 71 percent of CEOs believe their organisation’s growth will depend on their ability to navigate the shift to a low-carbon, clean-technology economy – not only benefitting society, but unlocking growth by creating new markets and making operations more efficient.

Brexit: living with uncertainty

Brexit's end state remains unclear, yet despite almost three years of uncertainty, our survey shows that significant proportion of global CEOs still view the UK as an attractive investment destination. Chief executives in United States, India, Japan, China and Australia are more likely to invest in the UK post-Brexit. Looking towards Europe, the picture is less positive with CEOs across all the European countries surveyed saying that they are now less likely to invest in the UK.

Clearly Brexit has made our clients think harder about where their future sources of growth are coming from.

Louise Ainswoth
CEO EMEA
Kantar, Media Division

Disruptor or disrupted?

CEOs recognise disruption has become an intrinsic part of their growth strategy. Over 90% told us this year, like last, that it represented more of an opportunity than a threat for them - consolidating the surge of positivity around disruption seen in last years’ survey. CEOs are not only dealing with disruption; they are embracing it.

At the same time, CEOs are only too well aware that new digital entrants – and traditional rivals with new digital capabilities – pose a major disruptive threat. 

UK CEOs are embracing disruption and putting it into practice UK CEOs are embracing disruption and putting it into practice