CEOs worldwide see growth opportunities beyond adversity

06 March 2023 5 min. read
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Despite current economic challenges and the mixed geopolitical landscape, CEOs worldwide are relatively optimistic of future business opportunities, according to the Global CEO Study 2023 by global strategy and management consulting firm Arthur D. Little.

Optimism on economic growth in the next 3-5 years varies between regions. In the Big Five economies of Europe (Germany, France, UK, Italy, Spain), nearly 4 in 10 CEOs are expecting global growth.

CEOs in the United States are more cautious, with over half predicting no growth over the same time period. Notably, just 10% of CEOs in Asia – which is considered by many CEOs as the world’s epicenter for growth – expect a positive economic outlook over the 3-5 year time frame. In the Middle East, 20% of CEOs expect a stable or positive worldwide economic outlook between today and 2028.

How do you expect the global economic outlook to evolve in the next 3-5 years?

Of the CEOs that anticipate growth, 30% plan to grow faster than the market; nearly three-quarters of whom will increase their investment in growth. About 1 in 5 CEOs plan a defensive approach to growth, wary of the balancing act they need to strike between growth and short term resilience and profitability.

From a sector perspective, there are notable differences in why CEOs are chasing growth.

Why is growth important for your organization

For example, in the manufacturing sector, nearly a quarter of CEOs (23%) believe growth will help them attract, retain, and motivate top talent – higher than in all other sectors. Growth is also seen as critical to securing the long-term health of the organisation, particularly in energy and utilities (cited by 48% of CEOs).

Growth. But how?

Asked how they forecast to achieve growth, half of all CEOs surveyed point at geographic expansion into greenfield markets, highlighting the continued potential for globalization.

Next in line on the growth agenda are expanding client segments, cost optimisation (which can unlock funding to drive growth investments) and building on the core areas of business. Turning to deals for vertical integrations is deemed a considerably more popular strategy going forward, in part as innovation ecosystems open up to corporate venturing and lower prices now offer a “perfect opportunity” to add programmatic deals to the CEO agenda.

What are the most important growth strategies you are adopting for your organization?

10% of CEOs are prioritising environmental and climate change as a factor in future growth in the Middle East this number is slightly lower (7%).

Cyber risk is viewed as a key, urgent factor by 15 percent of CEOs in Africa, 14 percent in Asia, and 13 percent in Middle East and Africa (MEA)/South America, ahead of their peers in Europe and North America.

Getting it right

Driving growth is notorious for its challenges, and Arthur D. Little’s CEO survey reconfirms that leaders are very well aware of the pitfalls, and success factors.

What are the most critical factors to your company’s future growth

Across the board, technology is considered the critical factors to future company growth, with its stake ranging from 19% in Asia and Africa to 34% in South America. Raw material prices, which have been in the spotlight more than ever amid the global raw materials crisis unleashed by the Russia-Ukraine war and geopolitical tensions, ranks second, with supply chain disruption rounding off the top three.

Talent is another area of concern, with the ‘war for talent’ raging across countries and sectors. According to Arthur D. Little, CEOs struggle to organically attract new capabilities and talents and are focused on acquiring them either via headhunters, corporate venture capital, or direct acquisition. Less than a quarter (21%) of key employees are developed internally, with headhunters the favoured option for companies (29%).

A greater focus on diversity, equity, and inclusion (DEI) is likely to help attract and retain talent over the long term.

What are your plans to source new capabilities & talents needed for growth

The key role of technology

Zooming in on the technology success factor, CEOs expect to increasingly expand their technology remit from supercharging the IT department to ensuring large-scale adoption of technology across the entire organisation. CEOs want new technology to underpin theirentire growth agendas, with artificial intelligence, cloud, data analytics, automation and robotics considered as fundamental technologies relevant in practically all sectors.

Commenting on the report’s key finding, Arthur D. Little CEO Ignacio García Alves said: “Despite current challenges and many dark macroeconomic previsions for 2023, most CEOs are optimistic for the future. They see opportunity in adversity, looking beyond the current crisis to embrace a more positive future for their companies and wider society.”

For its study, Arthur D. Little surveyed nearly 250 CEOs from companies worldwide with a combined turnover of more than $1 billion.