AI a bright spot for pessimistic Canadian CEOs
By Adam FreillLeadership Risk Management Software
The economic outlook is more pessimistic for Canadian CEOs than their global peers, but generative AI is providing many with hope of opportunity for reinvention, says PwC CEO Survey.
Canadian CEOs are significantly more pessimistic than their global counterparts, according to PwC’s 27th Annual Global CEO Survey. More than half of Canadian CEOs (55 per cent) expect domestic economic growth to decline this year, which is significantly more dour than the 37 per cent of global CEOs who expect economic growth in their respective countries to decline.
The survey, which interviewed 4,702 CEOs across 105 countries and territories, including 114 in Canada, explored the growing need for CEOs to reinvent their organizations. The results, say PwC, reveal opportunities to accelerate the pace of reinvention, leverage generative AI, and overcome barriers to change.
“We are operating in a continued poly-crisis environment, further complicated by tough economic headwinds. Therefore, it is not surprising that Canadian CEOs are more pessimistic than their global counterparts, when it comes to their outlook on economic growth,” said Nicolas Marcoux, CEO of PwC Canada. “While a soft recessionary landing maybe anticipated, CEOs find themselves under increasing pressure to reinvent their organizations.”
Canadian CEOs were ahead of their global counterparts on the adoption of generative Artificial Intelligence (AI) technology, however, with 36 per cent of Canadian companies turning to this emerging technology versus 32 per cent globally. Significantly, for employees in Canada who are eyeing the technology with some trepidation, only 14 per cent of Canadian CEOs believe AI will decrease their headcount in the next 12 months; considerably lower than global respondents, at 25 per cent.
Canadian CEOs say they expect to see quick adoption of generative AI, given the improvements it can make to an organization. Nearly 60 per cent believe it will significantly change the way their company creates, delivers, and captures value in the years to come. Twenty-nine per cent of Canadian CEOs believe it will increase revenue in the next 12 months.
However, Canadian CEOs also believe that AI will increase risk within their business related to cybersecurity (66 per cent), misinformation (52 per cent), legal liabilities and reputational risks (47 per cent), and more than half (55 per cent) agree that AI will require significant upskilling of their workforce in the next three years.
“It is clear that Canadian CEOs are embracing new technologies such as generative AI and see real potential in terms of supporting their workforce and growing revenue. However, it will be important to close the skills gap so that companies can leverage AI to its fullest potential, while ensuring that employees do their part in mitigating the increased risks,” said Marcoux.
The survey also found that 32 per cent of Canadian CEOs are questioning whether their organization will still be viable in 10 years. That’s up from 24 per cent in 2023. In line with global peers, almost all (95 per cent) of Canadian CEOs reported that they have taken some steps to change how they create, deliver and capture value in the last five years.
When asked about barriers holding a company back from reinvention, Canadian CEOs pointed to organizational inefficiencies as a significant concern. CEOs suggested that approximately half the time spent by the company on emails (51 per cent), performance reviews (50 per cent), procurement/contracting (45 per cent), and addressing tech issues (46 per cent) is inefficient.
“Canadian CEOs need to stay ahead of global trends and emerging risks – like geopolitical conflict, macroeconomic volatility, inflation and cyberattacks – as they are increasingly interconnected. Those who do so will be better equipped to accelerate change and reinvent their organizations to be sustainable in the future,” concluded Marcoux.
According to PwC, opportunities for reinvention include reducing inefficiencies with the help of AI, engaging with employees about reinvention, giving them an active role and helping them feel safe and proposing new ways of doing things, and by anticipating emerging risks