Kevin Ellis

This is according to PwC’s 26th annual CEO Survey published at the World Economic Forum in Davos.

However, almost a a quarter (22%) of UK CEOs believe their business will not be economically viable within a decade if they do not make significant interventions to change course. The survey of 4,410 CEOs in 105 countries also finds that 10% of UK CEOs believe they have less than three years to make these vital changes.

Globally, the picture is starker, with 39% of CEOs believing their business will not be economically viable within a decade on current trajectories. As such, both UK and global CEOs recognise the need to safeguard their companies and place people and technology at the heart of their plans.

Currently, 40% of UK CEOs believe their company’s tech capabilities lag behind the demands of their strategic objectives, and the gap will only widen without urgent action.

Consequently, 86% of UK CEOs are automating processes and systems, whilst 77% are deploying technology and 74% are upskilling their company’s workforce in priority areas. Encouragingly, UK CEOs are confident that measures such as these will put them in a stronger position both in the short and long term - only 4% say they are not confident about their revenue growth prospects in the next three years.

Kevin Ellis, chairman and senior partner, PwC UK, said: “Businesses have already undergone massive change this decade, with hybrid working and cloud computing among the big shifts. But this is the tip of the iceberg - many CEOs believe their current business models are unsustainable and this means more change ahead.

“This isn’t about tinkering but fundamental changes requiring big investment in people, skills and technology. It’s positive businesses are focused on making the changes needed, despite challenges including inflation and skills shortages which could be overwhelming.”

“CEOs recognise that future success is very much contingent on their people and they need to protect this commodity, particularly in a tight labour market. As such, 59% say they won’t reduce headcount and 86% won’t reduce employee pay.”

Encouragingly, the UK has moved up one place and is now the third most important country for growth among global CEOs, joint with Germany, and behind only the US and China. Over the last couple of years the UK has become increasingly important to global CEOs looking to grow their revenue - in 2020 only 9% selected the UK compared to 18% who selected it in 2023.

Mr Ellis added: “CEOs don’t expand and invest on a whim - they’re choosing the UK as that’s where they expect to see returns. That choice will be based on sector strengths in areas like AI and biotech, alongside our people-first, business-friendly environment.

“To keep the UK attractive, we need renewed focus on skills and regional growth - both of which will help unlock productivity.”

Over a quarter (26%) of UK CEOs say they are moderately or extremely exposed to the threat of climate change over the next 12 months. Globally, 39% of CEOs say the same, with CEOs in China feeling particularly exposed (59%).

When thinking about climate risks over the next five years, it ranks fourth for UK CEOs above health risks, whereas over the next 12 months health ranks higher. Given the longer-term focus on climate, 34% of UK CEOs are progressing and 31% have implemented a measurable data-driven strategy to reduce emissions and mitigate climate risks.