The rapid pace of technological advancement and digital disruption is both a boon and a bane for business leaders. CEOs must navigate the complexities of digital transformation, cybersecurity threats, and the integration of advanced technologies like AI.
While CEOs in the Middle East are optimistic about revenue growth, nearly half of them doubt the long-term economic viability of their businesses in the face of technological disruptions and climate change, according to PwC’s 27th Annual CEO survey, which gathered insights from 4,702 executives across 105 countries.
Well ahead of the 44% of CEOs globally, approximately 73% of the Middle East and 81% of CEOs in the Gulf Cooperation Council (GCC) anticipate an improvement in regional economic growth in the upcoming year.
This positive outlook has translated into 66% of Middle Eastern CEOs expecting substantial revenue increases over the next three years and 65% planning to expand their workforce in 2024.
“This year’s Middle East findings from PwC’s 27th CEO Survey reveal a significant shift from last year’s cautious outlook, with regional leaders expressing increased confidence in local and global economic growth,” says Stephen Anderson, Strategy Leader, PwC Middle East.
Anderson attributes this surge to solid macroeconomic conditions and a robust transformation agenda. “They anticipate better economic conditions in their home countries over the next 12 months.”
The International Monetary Fund (IMF) reinforces the macroeconomic conditions, which predicts a substantial 3.7% economic growth in the GCC this year. This positive outlook is further underpinned by stable and strong oil prices, growth in non-oil-related GDP, and promising inflation levels. Ambitious national strategies like Saudi Arabia’s Vision 2030 and the UAE’s We the UAE 2031 are drivers of this optimism wave.
Despite the optimism, the region’s CEOs acknowledge the challenges ahead. Inflation, geopolitical conflicts, and cyber risks are identified as key threats. Interestingly, these concerns are not unique to the Middle East; global peers also share the unease, with inflation recognized as a common threat.
“Geopolitical risk, particularly influenced by the war in Gaza, is on the risk agenda for 71% of regional CEOs, with 35% indicating they feel ‘highly’ or ‘extremely’ exposed. Additionally, 30% of CEOs in the Middle East view cyber risks as a major threat due to increased digital vulnerabilities in emerging digital economies,” says Anderson.
“As always in our region, resilience is key. Some of the harsh lessons businesses learned through the pandemic are ensuring better organizational muscle memory and agility to adapt quickly to market changes,” adds Anderson.
REINVENTION FOR LONG TERM SUCCESS
Anderson says almost half of CEOs don’t believe their business would be economically viable a decade from now if they do not evolve, up from 35% last year.
The Middle East is witnessing a monumental transformation. “CEOs recognize these trends and are actively prioritizing innovation and reinvention,” he says.
The survey indicates that technology transformation is leading the agenda for businesses in the region, with almost two-thirds (61%) of CEOs seeing it as a priority for how their business will reinvent going forward, compared with 46% globally. Over half of regional CEOs are diversifying products and services, showcasing a dynamic response to changing market dynamics.
“CEOs in the Middle East are increasingly vocal about GenAI’s potential to reshape how their companies create, deliver, and capture value. The survey reveals that 73% of regional CEOs expect GenAI to significantly impact their business in the next three years.”
Furthermore, Anderson sheds light on another critical aspect of business reinvention — climate action. “Disappointingly, in our survey, only 12% of global CEOs and a slightly higher 15% of regional CEOs recognized climate as a major concern. In our region, 38% of CEOs recognized that climate would be a key driver of transformation, 66% said they are already embarking on energy efficiency programs, and half said that they are tailoring their products and services to a more climate-conscious customer base.”
UPSKILLING THE WORKFORCE
Meanwhile, as Gen AI continues to evolve, Anderson emphasizes the importance of adapting technology strategies and upskilling the workforce.
“CEOs are driving Gen AI top down through the organization but also recognize that upskilling their workforce will be key. About 72% of regional CEOs said introducing Gen AI will require their workforce to develop new skills urgently.”
As per the survey, CEOs in the region have a favorable view of the impact of Gen AI, with 77% believing that it will improve work efficiency and 63% anticipating increased revenue on its adoption.
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