PricewaterhouseCoopers timed the release of its 14th annual Global CEO Survey results to coincide with the opening of the World Economic Forum at Davos yesterday. Despite an anemic recovery in the US, the results show that CEO confidence has rebounded to pre-crisis levels, with corporate leadership eager to hit the ground running in 2011.
56 percent of American CEOs consider themselves "very confident" about their company's business prospects in the next three years, the study reveals. That marks a significant shift from recent years; in 2008, for example, only 15 percent of CEOs expressed confidence. International business leaders expressed as much, if not more confidence than their American counterparts, though shaky Western Europe presented a high-profile exception.
Worldwide, CEOs unsurprisingly deemed China, the US and India (in that order) the most important engines of growth for the world economy.
PwC researchers note three major trends that have emerged as major shapers of the economic recovery. First up is the ever-sticky relationship between governments and businesses. The firm asserts that both have "become allies in many economies around the world, especially as countries tackle structural weaknesses exposed by the recession." This sort of constructive relationship is key to growth prospects and, crucially, jobs; in the US, CEOs were less confident that the federal government was actively enabling job growth than those surveyed in other countries. "We cannot overstate the importance of shaping a constructive working relationship between US business and government to help drive growth and create jobs," said Bob Moritz, Chairman of PwC US. "Tangible actions and ongoing collaboration are needed to serve the short- and long-term interest of the economy."
Jobs growth is the focus of the second major trend. 55 percent of US CEOs "plan to increase their headcount" in 2011, better than the 51 percent of international CEOs who plan to do the same. While that optimism is certainly a good sign for jobseekers, it comes with a caveat; 56 percent of international CEOs worry that they won't be able to find the ideal talent they're seeking in new hires. According to the firm, many CEOs "cite issues such as integrating young employees and forecasting talent availability in emerging markets as challenges they and their leadership teams need to address." In the event of a possible talent shortage, both US (76 percent) and international (82 percent) CEOs plan to invest internally to "create and foster a skilled workforce" of their own.
Finally, a majority of surveyed business leaders are reshaping their companies' strategies to give better attention to risk management. 86 percent of American CEOs say that they plan to "allocate more senior management attention to risk management" in an effort to avoid—or at least plan for the possibility of—unforeseen crises of the future. Further, 82 percent of US CEOs say they are "incorporating risk scenarios into strategic planning," a trend that would make the consultants at McKinsey and Roland Berger proud.
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