CEOs Predict Economic Growth and Embrace Reinvention

The global business landscape is entering a phase of renewed optimism and strategic reinvention, as revealed by PwC's 28th Annual Global CEO Survey, launched during the World Economic Forum. Almost 60% of CEOs worldwide expect global economic growth to increase in 2025, a dramatic rise from 38% last year and a mere 18% two years ago. This surge in optimism underscores the resilience and adaptability of global business leaders amidst economic uncertainty.

CEOs are bullish on growth and taking bold action to secure positions for success in the long term. Over 40% of CEOs intend to hire more people in the coming year, according to the survey, with the big four areas-the technology sector, real estate, private equity, and pharmaceuticals-on top. Notably, smaller companies with revenues less than $100 million are particularly optimistic. Indeed, 48 percent of them are planning to expand their teams. Mohamed Kande, PwC's Global Chairman, said, "Business leaders are optimistic about the year ahead but recognize the need to reinvent how they create, deliver, and capture value.

This awareness for renewal reverberates throughout the survey, for 42 percent of the surveyed CEOs believed that a drastic change in their business models is needed in order for these to stay relevant in the next decade. Already today, 63 percent of business leaders have already made concrete steps towards reshaping their operations, and the need for renewal in a rapidly changing market is extremely urgent. The development of new ecosystems and changes in competition open doors for firms ready to make aggressive moves. CEOs entering a new industry said that their initiatives brought meaningful contributions to revenues, though 38% of those CEOs claimed they had some actual results. The most significant obstacle, however, is agility because only a small portion of firms have budget and workforce reallocation greater than 20% each year, hence cannot innovate more.

New ecosystems are forming, transforming competition and value creation," Kande said. "Bold decisions around people, strategy, and supply chains are critical."

Artificial intelligence (AI) is emerging as the cornerstone of this transformation, with 56% of CEOs reporting efficiency gains from generative AI (GenAI). Despite these advances, 34% of leaders report that AI has not yet improved profitability up to now, below the very high expectations for 2024. Nevertheless, there is still cause for optimism: 49% of CEOs expect profitability improvement by 2025 as maturity in AI integration increases. There's much work still to be done, especially in terms of trust in AI systems: only one-third of the CEOs say they have high confidence about embedding AI in critical business processes.

Matt Wood, PwC’s Global & US Chief Technology and Innovation Officer (CTIO), emphasized the need to address these trust concerns. “CEOs are increasingly confident about AI’s potential but see trust as a hurdle,” Wood said. Interestingly, the employment impact of AI has been more positive than negative, with more CEOs reporting headcount growth (17%) than reductions (13%) due to AI adoption.

The survey also reflected an increasing emphasis on climate-related investments. Executives indicated that those efforts are now six times as likely to lead to increased revenues than to be revenue-reducing, further proof that going green is lucrative. Furthermore, a significant two-thirds of the CEOs responding indicated that such climate investments were cost-reducing or had at least a neutral impact on finance. However, regulatory complexity is still one of the most significant barriers to implementing climate projects, with 24% of CEOs citing this as a challenge. Despite these hurdles, the combination of climate transition and AI-driven innovation is reshaping industries and creating new pathways for value creation.

Carol Stubbings, PwC's Global Chief Commercial Officer, stated that climatic and AI convergence is transformative forces. "Megatrends such as climate and AI are driving transformation; only through reinvention can one thrive in the new economy.

This year's survey paints a picture of CEOs who are optimistic about short-term growth but pragmatic about the long-term need for reinvention. The balancing act between leveraging immediate opportunities and preparing for fundamental shifts in technology, competition, and environmental demands is shaping a dynamic global business landscape.

The changes happening in the world under contemporary economic, technological, and environmental pressures underscore that reinvention is not only an option but a matter of strategic survival and success. It will therefore be that willingness to embrace change, foster innovation, and take on other challenges head-on that will characterize leaders and companies thriving in this new era of transformation.