Almost half of business leaders believe their enterprises will not be viable in 10 years as a result of AI-led technological disruption and as climate pressures accelerate, according to a new survey released by PwC on the eve of the World Economic Forum (WEF) in Davos.
The impact of technologies such as generative AI and the ongoing climate transition are expected to get top billing at the 54th annual WEF gathering in the Swiss ski resort, which takes place over the next four days under the theme of “rebuilding trust” and against a backdrop of deteriorating geopolitics and widening global divisions.
Almost half (45 per cent) of the 4,702 chief executives surveyed by PwC in 105 countries, including Ireland, said they do not believe their current business would be viable or relevant in a decade if it continues on its current path, up from 39 per cent in 2023.
“While the trajectory is positive, confidence is fragile as megatrends including technological disruption – exemplified by generative AI — and the climate transition converge,” according to the consultancy’s annual chief executive survey.
While an overwhelming number of chief executives see generative AI “as a catalyst for reinvention that will power efficiency, innovation, and transformational change”, a majority (69 per cent) said it will require workforce upskilling.
A significant number also expressed concern about an associated rise in cybersecurity risk (64 per cent), misinformation (52 per cent), legal liabilities and reputation risks (46 per cent).
On a positive note, the proportion of chief executives optimistic about global growth doubled from 18 to 38 per cent as the perceived threat from inflation and macroeconomic volatility receded. Similarly, expectations that the global economy would nosedive into recession tumbled from a record high in last year’s survey (73 per cent) to 45 per cent.
And despite ongoing conflicts in Ukraine and Gaza, the proportion of chief executives who felt their company was moderately or highly exposed to geopolitical conflict risk fell 7 percentage points (to 18 per cent).
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While business leaders in most regions were more likely to be optimistic about domestic economic prospects than pessimistic, those in western Europe and North America bucked the trend. In western Europe, 32 per cent said they expected their domestic economies to improve, while 48 per cent predicted a decline. In North America, 31 per cent were optimistic while 52 per cent were pessimistic.
“As business leaders are becoming less concerned about macroeconomic challenges, they are becoming more focused on disruptive forces within their industries,” said Bob Moritz, PwC’s global chair.
“Despite rising optimism about the global economy, they are actually less optimistic than last year about their own revenue prospects, and more acutely aware of the need for fundamental reinvention of their business,” he said.
“Whether it is accelerating the rollout of generative AI or building their business to address the challenges and opportunities of the climate transition, this is a year of transformation,” he said.
About 3,000 politicians, business leaders and others, including French president Emmanuel Macron; European Commission president Ursula von der Leyen; Chinese premier Li Qiang; Ukrainian president Volodymyr Zelenskiy; OpenAI chief executive Sam Altman are scheduled to attend this year’s “super elite” gathering in Davos.
Joe Biden has not attended since he became US president but this year he sends secretary of state Antony Blinken and national security advisor Jake Sullivan.
Taoiseach Leo Varadkar, Minister for Finance Michael McGrath and Minister for Public Expenditure Paschal Donohoe will lead the Irish contingent at the four-day event.
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