Geopolitical Risk Now Top Concern for CEOs, According to KPMG’s CEO Survey
In India, 58% of CEOs compared to 57% globally agree that ethical challenges hinder the adoption of generative AI within their organizations, while 56% of Indian CEOs compared to 55% globally cite implementation cost as a major barrier. Additionally, 89% of Indian CEOs compared to 87% globally are likely to reward employees who come to the office with raises, promotions, and favorable assignments.
The challenges continue for corporate leaders as broader political uncertainty and geopolitical tensions are now identified as the greatest risk to business growth, according to KPMG’s CEO survey. This survey collected inputs from 1,300 CEOs of the world’s largest businesses, including 125 CEOs from India. The survey also reveals that disruptive technologies and the return of employees to the office are among the challenges faced CEOs.
Disruptive technology, particularly generative AI, is considered a primary risk and threat to organizational growth CEOs in India and worldwide. 66% of Indian CEOs and 70% of global CEOs consider investing in generative AI as a top priority for future competitiveness. However, ethical challenges and implementation costs continue to be significant obstacles in India, with 58% of Indian CEOs citing ethics as a barrier and 56% citing implementation cost.
The KPMG 2023 India CEO Outlook further highlights the rising concerns of geopolitical risks and political uncertainty among senior executives. These risks have surpassed other concerns and have become the leading perceived risks in 2023, even though they didn’t make the top three risks in 2022.
Despite these challenges, CEOs in India demonstrate optimism and resilience toward long-term growth. The confidence of Indian CEOs in the growth prospects of the global economy over the next three years has significantly increased to 69% in 2023 from 57% in 2022. Moreover, the confidence in their own company’s growth prospects remains stable at 71% in 2023, compared to 72% in 2022. In contrast, global CEOs express declining confidence with 77% in 2023 compared to 85% in 2022.
While Indian CEOs slightly perceive a decline in the country’s growth prospects in 2023, they exhibit resilience and the potential for short-term recovery. However, volatile geopolitics, trade patterns, rising interest rates, and monetary tightening may pose challenges for companies. Interestingly, a small fraction of Indian CEOs share this viewpoint, reflecting positively on India.
Yezdi Nagporewalla, Chief Executive Officer of KPMG in India, affirms that Indian CEOs face multiple challenges but remain positive about the growth prospects of the global economy and their organizations. Nagporewalla emphasizes the importance of strategic planning, agility, and a broader perspective to overcome the challenges and achieve long-term sustainable growth.