As technology’s tentacles increasingly affect every business, technology CEOs around the globe are notably more optimistic about growth prospects than CEOs from other industries.
According to PwC’s 19th Annual Global CEO Survey: 90% of tech CEOs expect to increase company sales this year, while 94% of tech respondents anticipate that revenues will rise in the next three years. Responses from the 167 global tech CEOs surveyed gave way to four overarching themes that can help explain the mindset behind the CEOs’ optimism.
Growth in complicated times
“Despite some discomfort about the global economy, tech CEOs are clearly bullish about their own growth prospects,” said Raman Chitkara, PwC Global Technology Industry Leader. “While historically sensitive to managing costs, the number of tech CEOs highlighting cost management as a top priority has come down—consistent with their increased confidence in future growth.”
Only 50% of tech CEOs are focused on cost reduction this year, compared with 60% in last year’s survey. Cost reduction is also a lower priority for tech CEOs than it is for CEOs across other industries, where 68% are focused on cost reduction.
Overall, tech CEOs’ optimism about growth opportunities outweighs their worry about threats, and they are significantly more optimistic about opportunities than CEOs in other industries (72% vs. 60%). But tech CEOs remain aware of major business threats. Topping the list of threats, 80% of respondents are concerned about the availability of key skills—up from just 58% in 2010. Cyber security was second on the list of concerns, followed by the threat of being unable to keep up with accelerating technological change.
Cyber security moved from sixth on tech CEOs’ list of top threats to second this year, and tech CEOs are notably more concerned about cyber security than CEOs from other industries (76% of tech respondents vs. 61% in other industries).
Addressing greater expectations
The majority of tech CEOs believe top talent prefers to work for organisations with social values that are aligned to their own, with 65% of tech CEOs saying that corporate responsibility is core to everything their businesses do. So, not surprisingly, 75% of tech CEOs are making changes to their values, ethics and codes of conduct. Eighty-three percent of tech CEOs say that in five years’ time, successful companies will be guided by a purpose centred on creating value for wider stakeholders. A full 95% of tech CEOs name customers and clients as the wider stakeholders with the highest impact on their organisations’ strategies.
Transforming: Technology, innovation and talent
Indeed, technology is transforming relationships with customers and other stakeholders. An impressive 92% of tech CEOs agree that technological advances will most likely transform wider stakeholder expectations of technology businesses over the next five years. As a result, 86% of tech CEOs are changing how they use technology to access and deliver on wider stakeholder expectations.
“Consistent with their focus in previous years, tech CEOs believe data and analytics, R&D and innovation, and customer relationship management systems will generate the greatest return in terms of engagement with wider stakeholders,” said Chitkara. “This is one area where tech CEOs and their counterparts from other industries are in alignment.”
Two-thirds (67%) of tech CEOs plan to hire this year, a 12% increase from last year and the highest number in the past six years. As a result, they’re increasingly concerned about finding the right talent, in part because more than three-quarters of tech CEOs (78%) believe a skilled, educated and adaptable workforce is the most important outcome for society today.