Growing recognition for emerging digital technologies to accelerate growth and drive resilience
TORONTO, Aug. 31, 2020 /CNW/ - Amid a highly virulent coronavirus pandemic, rising geopolitical trade tensions, and emerging disruptive technologies, Canadian CEOs are more optimistic about the future than their global counterparts, finds KPMG's latest Global CEO Outlook. In the first study of its kind to get a read on how CEO priorities and concerns have changed during this global crisis, KPMG International conducted two surveys, one at the onset of the pandemic in January and the other, a pulse check from late July into early August.
The report finds that only 12 per cent of Canadian CEOs are significantly or moderately less confident than in January, compared to 29 per cent globally. Further, 40 per cent remain as confident as they did pre-pandemic, versus only a quarter (26 per cent) of global CEOs.
Across the board, Canadian CEOs felt much or moderately more confident in the three-year growth prospects for their country (48 per cent vs. 45 per cent globally), their industry (56 per cent vs. 55 per cent globally), and their company (84 per cent vs. 67 per cent globally).
"The actions taken in Canada to flatten the COVID-19 curve and keep cases fairly subdued means that CEOs here feel more assured than their global peers that our national economy will not collapse, with only 12 per cent feeling the economy is in a worse position today than it was pre-COVID," says Stephanie Terrill, business unit leader, management consulting, KPMG in Canada.
"Canadian CEOs also feel more bullish about the prospects of their own firms and are accelerating their investments in digital technologies, reflecting the need to find new ways of working and problem solving going forward."
Much or moderately more Confident in Domestic Economic Growth |
|||||
2020 - Initial |
2020 - Survey |
2019 |
Jan-Aug 2020 |
YoY - Change |
|
Canadian CEOs |
76% |
48% |
79% |
-28% |
-31% |
Global CEOs |
77% |
45% |
83% |
-32% |
-38% |
Last week, Statistics Canada reported that the Canadian economy grew by 6.5 per cent in June, reflecting the easing of COVID-19 restrictions. For the second quarter, economic output contracted by 38.7 per cent, the largest decline on record.
The recovery though remains fragile. Ms. Terrill notes that Canadian CEOs said the greatest threats to growth are territorialism and climate risks, which are not surprising given the economy's heavy reliance on natural resources and export trade.
Business leaders in Canada also pointed to emerging technologies, talent risk, and cyberattacks as the top threats to growth prospects. Talent risk actually catapulted to No. 3 from the bottom quartile barely eight months earlier. Global CEOs are equally as concerned about losing employees or not being able to hire talent, but unlike in Canada, they called it their greatest threat to growth above all else.
Canada - Pulse |
Canada – |
Global – |
|
Return to territorialism |
1 |
3 |
4 |
Environmental / climate risk |
1 |
1 |
2 |
Emerging / disruptive technology risk |
3 |
4 |
6 |
Talent risk |
3 |
10 |
1 |
Cybersecurity risk |
5 |
2 |
5 |
Supply chain risk |
5 |
8 |
3 |
Accelerating digital adoption
The pandemic has put the spotlight squarely on the importance of technology to drive future growth and strengthen overall enterprise resilience to crises.
Three quarters (76 per cent) of Canadian CEOs agree that investing in disruptive technologies, such as artificial intelligence and automation, is critical to achieve long-term sustainable growth, compared to 72 per cent globally.
Over 4 in 5 (84 per cent) in Canada say they will now be prioritizing their technology investments to meet growth and transformation objectives, and the vast majority (92 per cent) say COVID-19 has accelerated the digitization of their operations.
"COVID-19 is accelerating digital strategies, with many leaders having to drastically rethink operations, ramp up technology, redefine supply chains, and innovate to make sure they can keep employees safe and working and deliver goods and services to their customers," says Ms. Terrill. "But Canadian companies may not be moving fast enough."
The report finds that only 16 per cent of Canadian CEOs feel that in the last few months they've made years of progress in digitizing their operations, compared to 30 per cent globally. Further, when it comes to developing new digital business models and revenue streams, a mere 4 per cent of Canadian CEOs say they've accomplished years of progress in the last few months, compared to nearly 17 per cent globally.
Where global CEOs rethink their supply chains to focus on becoming more agile to address changing customer needs, business leaders in Canada approach it from the perspective of insulating their company against natural disasters.
About KPMG's CEO Outlook
This survey includes perspectives from 75 Canadian CEOs, and is part of a global KPMG study including nearly 1,300 international CEOs on the biggest risks facing their businesses and the strategies they are employing to address them and continue to drive growth.
The survey was initially conducted in January and February, before many key markets were beginning to feel the full impact of the pandemic crisis. A follow-up or pulse survey of 315 chief executives, including those in Canada, was conducted by KPMG International between July 6 and August 5 to understand how CEO thinking has evolved during the crisis.
Nearly 40 per cent of the Canadian CEOs who responded in the initial survey report annual revenues between $1 billion and $9.99 billion (51 per cent, $500 million to $900 million) and 44 per cent who responded in the follow-up survey report annual revenues of $10 billion or more (40 per cent, $1 billion to $9.99 billion; 16 per cent $500 million to $999 million).
The initial and follow-up surveys in Canada included 15 per cent and 8 per cent of female CEOs, respectively.
The study represents CEOs of companies from a wide range of industries, the top three in Canada being energy, banking, and consumer and retail. CEOs from insurance, asset management, infrastructure, automotive, telecommunications, life sciences, manufacturing and technology were also represented.
ABOUT KPMG IN CANADA
KPMG LLP, an Audit, Tax and Advisory firm (home.kpmg.ca) is a limited liability partnership, established under the laws of Ontario, and the Canadian member firm of KPMG International Cooperative ("KPMG International"). KPMG has more than 7,000 professionals/employees in over 40 locations across Canada serving private- and public-sector clients. KPMG is consistently recognized as an employer of choice and one of the best places to work in the country.
The independent member firms of the KPMG network are affiliated with KPMG International, a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
SOURCE KPMG LLP
Kevin Dove, Corporate Communications, KPMG in Canada, (416) 777-8026, [email protected]
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