Geopolitics, Political Uncertainty Now Top Potential Hazards for Senior Executives - KPMG 2023 India CEO Outlook
Geopolitics and political uncertainty, which did not even rank in the top three of the five threats in 2022, are now the top potential hazards for senior executives, according to the KPMG 2023 India CEO Outlook.
Despite this, CEO confidence in the prospects for global economic growth over the next three years has significantly grown in India, rising from 57 percent in 2022 to 69 percent in 2023, indicating optimism and a strong commitment to a long-term growth trajectory.
In contrast to the declining confidence of CEOs globally (77 percent in 2023 compared to 85 percent in 2022), the level of confidence of CEOs in India in their own company's growth prospects has also remained largely unchanged from the previous year (71 percent in 2023 compared to 72 percent), indicating their resilience in weathering the storms of uncertainty.
CEOs in India predict a modest slowdown in the nation's growth from 2022 levels in 2023, but they are resilient enough to bounce back quickly.
Although higher interest rates and monetary tightening could prove a benefit for consumers, the erratic nature of geopolitics and trade patterns may be a disadvantage for businesses.
“CEOs in India are facing challenges and obstacles to growth on multiple fronts – from geopolitical uncertainty and politicization to increased stakeholder expectations in the ESG space and the adoption of generative AI. Even though leaders in India are having to deal with macroeconomic and geopolitical challenges right now, they are fairly positive on the growth prospects of the global economy as well as their organization, which is very reassuring. There’s general optimism that we can, in time, gradually return to long-term sustainable growth.” said Yezdi Nagporewalla, Chief Executive Officer, KPMG in India.
“Today, the opportunity to move towards a fair, equitable and successful planet is huge and leaders should look to make the most of it.The key to success would hinge on steadfast focus on seeing the bigger picture, strategic planning, and determination to tackle the challenges in the short-term with agility” added Nagporewalla.
ESG
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54 percent of CEOs in India, compared to 69 percent CEOs globally, have fully embedded ESG into their business as a means to value creation.
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38 percent of CEOs in India and a little over 35 per cent CEOs globally are prioritizing addressing environmental challenges such as achieving net zero.
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42 per cent CEOs in India, compared to 50 per cent CEOs globally, are expecting a significant rate of return in three to five years. Despite the increasing polarization of discussions around the term ‘ESG’, CEOs both globally and in India are continuing to invest and adopt a more outcome-focused approach to their business strategies, while maintaining a pragmatic perspective on the external environment.
Disruptive Technology
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Emerging/disruptive technology has emerged as a primary risk and one of the greatest threats to organizational growth for CEOs in India as well as globally.
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CEOs in India and globally are prioritizing investments in generative AI as a key competitive advantage for the future, with 66 percent of CEOs in India compared to and 70 percent of CEOs globally considering it as a top investment priority for their organization.
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58 percent of CEOs in India compared to 57 percent CEOs globally agree that ethical challenges are a significant obstacle to adopting generative AI within their organizations, while 56 per cent CEOs in India compared to 55 per cent CEOs globally cite implementation cost as a major barrier.
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77 percent of CEOs in India compared to 82 percent CEOs globally view generative AI as a double-edged sword, as it can both enhance cybersecurity efforts and create new vulnerabilities for adversaries to exploit.
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Despite these concerns, a higher number of CEOs in India at 61 per cent compared to 52 per cent CEOs globally feel confident in their organization's preparedness for potential cyber-attacks.
Talent
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89 per cent CEOs in India compared to 87 per cent CEOs globally are likely to reward employees who try to come to office with raises, promotions, and favorable assignments.
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54 percent of CEOs in India compared to 64 percent CEOs globally envision the working environment for employees to be an in-office model in three years.
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52 percent of CEOs in India compared to 66 percent CEOs globally agree that the progress on diversity and inclusion has moved slowly in the business world.