Geopolitics and political uncertainty top the list of most pressing concerns for CEOs in India
58 per cent CEOs in India, 57 per cent CEOs globally cite ethical challenges as the number one concern when it comes to implementing generative AI
54 per cent CEOs in India, 69 per cent CEOs globally have fully embedded ESG into their business as a means of value creation
CEOs in India are increasingly weighing up the return-to-work dilemma, with 89 per cent CEOs in India and 87 per cent CEOs globally considering linking rewards, raises or promotions with office attendance
Geopolitics and broader political uncertainty are now the greatest risk to business growth, according to a survey of more than 1,300 CEOs of the world’s largest businesses of which 125 CEOs were from India.
The KPMG 2023 India CEO Outlook reveals geopolitics and political uncertainty have become the leading perceived risk this year for senior executives – concerns that didn’t even make the top three of the fives risks in 2022.That said, the confidence of CEOs in India in terms of growth prospects for the global economy over the next three years has considerably increased to 69 per cent in 2023 from 57 per cent in 2022, demonstrating optimism and a strong resilience towards a long-term growth trajectory.
The level of confidence of CEOs in India in their own company’s growth prospects too has remained mostly unchanged from the past year (71 per cent in 2023 compared to 72 per cent in 2022), contrary to the declining confidence of CEOs globally (77 percent in 2023 compared to 85 per cent in 2022), indicating their resilience in weathering the storms of uncertainty. Even though CEOs in India see a slight decline in growth prospects for the country in 2023 from 2022 levels, they exhibit enough resilience to recover in the short-term.
However, the volatile nature of geopolitics and trade patterns, combined with rising interest rates and monetary tightening could act as a headwind for companies. Interestingly, only a small fraction of CEOs in India compared to their global counterparts share this viewpoint, which reflects positively on India.
“CEOs in India are facing challenges and obstacles to growth on multiple fronts – from geopolitical uncertainty and politicisation 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 positive on the growth prospects of the global economy as well as their organisation, 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
CEOs in India as well as globally are starting to see ESG as an essential component of their corporate strategy that helps generate long term growth
54 per cent of CEOs in India, compared to 69 per cent CEOs globally, have fully embedded ESG into their business as a means to value creation
38 per cent of CEOs in India and a little over 35 per cent CEOs globally are prioritising addressing environmental challenges such as achieving net zero
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 polarisation 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.
When asked where CEOs in India see ESG strategy having the greatest impact over the next three years, building customer relationships came in at the top spot with 26 per cent
Emerging/disruptive technology has emerged as a primary risk and one of the greatest threats to organisational growth for CEOs in India as well as globally
CEOs in India and globally are prioritising investments in generative AI as a key competitive advantage for the future, with 66 per cent of CEOs in India compared to and 70 per cent of CEOs globally considering it as a top investment priority for their organisation
58 per cent of CEOs in India compared to 57 per cent CEOs globally agree that ethical challenges are a significant obstacle to adopting generative AI within their organisations, while 56 per cent CEOs in India compared to 55 per cent CEOs globally cite implementation cost as a major barrier
While CEOs in India and globally recognise the potential benefits of generative AI in detecting cyber-attacks, they also acknowledge the potential risks associated with its use. 77 per cent of CEOs in India compared to 82 per cent 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
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 organisation’s preparedness for potential cyber-attacks.
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 favourable assignments.
54 per cent of CEOs in India compared to 64 per cent CEOs globally envision the working environment for employees to be an in-office model in three years. This is despite a conflicting debate about hybrid working that has great support, especially among millennials
That said, leaders should have a long-term perspective that incorporates employee value proposition and considers the concerns and wants of employees as firms continue to roll out their return-to-office plans in order to ensure that talent is nurtured and maintained
52 per cent of CEOs in India compared to 66 per cent CEOs globally agree that the progress on diversity and inclusion has moved slowly in the business world. 56 per cent of CEOs in India compared to 71 per cent of CEOs globally agree that scrutiny of an organisation’s diversity performance will continue to increase over the next three years.
For more detailed insights please refer to the attached document.
The report includes comments from:
Industry experts :
Puneet Chandok, CVP & President, Microsoft India, and South Asia
Nithin Kamath, Founder & CEO, Zerodha
Rishad Premji, Chairman, Wipro Limited
KPMG views :
Akhilesh Tuteja, Partner and Head, Clients and Markets, KPMG in India
Vishalli Dongrie, Partner and Head, People and Change, KPMG in India
Namrata Rana, National Head, ESG, KPMG in India