Almost half (45%) of CEOs believe that technological disruption will make their businesses invalid within the next decade, according to the PwC’s Annual Global CEO Survey.
They said their current business models will not be feasible in 10 years’ time if artificial intelligence continues to develop at its current rate, creating new hurdles for existing companies.
However, many of the 4,702 global CEOs interviewed expect their businesses to transform even sooner – 70% of respondents said their companies will be fundamentally altered within the next three years as they adapt to these new challenges.
The majority (69%) of CEOs surveyed said they will need to upskill their current workforce if they stand any chance of competing against AI, while many expressed concerns about the cybersecurity (64%), misinformation (52%) and legal risks (46%) associated with the technology.
But it wasn’t all doom and gloom – almost three-fifths (58%) of CEOs think AI will improve the quality of their products and services over the next 12 months, with 46% saying it should positively impact profitability.
Indeed, the general outlook over the short term was more positive, with 38% of CEOs optimistic about global economic growth over the next year, up significantly from 18% in 2023.
Despite a brighter short-term outlook, PwC global chair Bob Moritz said this latest report highlights the need for businesses to rethink their long-term structure.
“As business leaders are becoming less concerned about macroeconomic challenges, they are becoming more focused on disruptive forces within their industries,” he added.
“Despite rising optimism about the global economy, they are actually less optimistic than last year about their own revenue prospects, and more acutely aware of the need for fundamental reinvention of their business.”
CEOs also highlighted the energy transition as a major disruptor that will bring new pressures down on companies throughout the coming decade.
A third of respondents anticipate that climate needs will have a significant impact on how they run their business over the next three years, with many citing regulatory complexity (54%) and low returns for climate-friendly investments (51%) as the biggest barriers to overcome.
Three-quarters (76%) of respondents have already taken steps to improve energy efficiency, but Mortiz said much more is needed if companies are to be prepared.
“This year’s data suggests a high degree of CEO uncertainty ahead, but CEOs are taking action,” he explained. “They are transforming their business models, investing in technology and their people, and managing the risks and opportunities presented by the climate transition.
“If businesses are to thrive over the short and long-term, build trust, and deliver sustained and long-term value, they must accelerate the pace of reinvention.”