PwC survey shows Irish CEOs are seizing opportunities to re-invent for future growth
David McGee, ESG Leader, PwC Ireland, says: “Irish CEOs are consistently more confident in outlook than their global counterparts, and while they are much more optimistic about economic growth than they were a year ago, they remain conscious of the risks.”
Almost three-quarters of Irish CEOs expect Ireland’s economic growth to improve over the next 12 months, up from 50% last year. At the same time, 62% of Irish business leaders believe global economic growth will improve, up from 35% last year.
The 28th Annual PwC Global CEO Survey reveals an overwhelming majority (93%) are confident about their company’s revenue prospects for the year ahead, up from 86% last year. The figures represent a stark comparison to the recent all-time lows in 2020 — when just 16% of Irish CEOs expected the economy to grow.
“Irish CEOs are consistently more confident in outlook than their global counterparts, and while they are much more optimistic about economic growth than they were a year ago, they remain conscious of the risks,” observes David McGee, ESG Leader, PwC Ireland.
There are high levels of concern about a number of threats as the global landscape shifts at an unprecedented rate: with macro-economic volatility the top risk (93%), followed by lower availability of workers with key skills (91%). Other significant challenges include inflation, geopolitical conflict, cyber threats and technology disruption.
“The smart CEOs are saying: “I need to re-invent my business model, because if I don’t, some start-up or spin-out is going to do it for me.”
Irish CEOs are seizing the opportunity to reinvent, with 84% having taken at least one significant action — including developing innovative products/services, targeting a new customer base, implementing new pricing models — to change how their company creates, delivers and captures value over the past five years.
McGee notes: “This optimism is also reflected in strong revenue growth expectations for their own businesses, indicating continued capital investment.”
Irish businesses expect a surge in AI related innovation activity in the near future, but building trust is essential to unlocking its full potential. While the PwC survey predicts large-scale AI and GenAI adoption into key business areas over the next three years, McGee says there is a focus on realising operational efficiencies, rather than using AI or GenAI as a catalyst for fundamental business model transformation.
“We are seeing Irish organisations embrace reinvention, with significant actions to embed AI and climate actions into the DNA of their businesses. However, there is more work to do. We need a change of mindset to link these actions to innovative growth strategies and bottom-line improvements. For example, less than one in six Irish CEOs said that they planned to integrate AI/GenAI into core business strategy to a large or very large extent in the next three years. While sustainability can be a strategic advantage, more action is needed as 29% have made no climate-friendly investments in the past year.”
Amongst the actions business leaders can take to make the most of the opportunities presented with AI and the need to promote sustainable practices, he points to the need for upskilling: “Upskill your people — 73% of participants in PwC’s GenAI business leaders survey said that GenAI will require most of the workforce to develop new skills. Define the use cases and plan for integration — testing and controls, policies and procedures.”
McGee underlines the need for putting governance structures in place to make AI safe and secure: “Just a fifth of respondents in the recent PwC GenAI Business Leaders said that their organisation has an AI and/or GenAI governance structure in place. Good governance, grounded in an organisation's risk appetite, provides clarity and a safe environment for the business to innovate and explore AI uses. The business can then focus on faster adoption of AI without exposing it to unnecessary or unforeseen risks.”
The survey highlights that trust in AI remains a hurdle for more widespread adoption, with less than three in ten Irish CEOs having a high degree of trust in embedding AI and GenAI technology into key processes in their company. He says: “Building trust in AI is essential to unlocking its full potential. And compliance with the EU AI Act and other AI-focused regulations will provide a supportive framework for safe and responsible AI use.”
Irish companies are reinventing their business models, but the pace needs to quicken. Nearly three out of ten Irish CEOs believe that their company will not be viable beyond the next decade if it continues on its current path, up from 21% two years ago.
Irish CEOs, in common with their global counterparts, are taking action — with 84% having taken at least one significant action to change how their company creates, delivers and captures value in the last five years.
Globally, there is a clear link between the number of reinvention actions taken and higher profit margins. Dynamic resource reallocation is crucial for strategic reinvention.
“While much is happening, the survey suggests that they can quicken the pace of reinvention,” says McGee. “They can do more on integrating AI, as well as making climate-friendly investments — given that almost a third say that they have not made any climate change investments in the last year. They can look to do more reallocating of resources across business units — currently over half reallocate 10% or less of their finance and HR resources. With only 32% having begun competing in sectors or industries that are not their own, they can do more of this,” he notes.
To ensure their teams engage with change in a way that is optimistic yet realistic, emphasising resilience and strategic foresight, McGee cites the need for ongoing education and training, using AI on the job, bringing your people on the journey and involving them in the decision making, and celebrating the wins.
“Irish CEOs are almost invariably more positive and optimistic, much of which comes from our need to be globally connected and the economic agility that comes with it,” McGee concludes. Unlike their counterparts in countries like Germany or the US, Irish CEOs operate in a small open economy where being internationally agile is key to operating successfully. “Irish CEOs have proven to be resilient and are taking actions head-on while navigating a landscape where optimism and caution coexist.”
As shifts in geopolitics, emerging technologies and climate transition reshape markets locally and globally, Irish business leaders are investing in and reinventing their operations and business models to create value in innovative ways.
McGee highlights: “We have come through economic shocks, Brexit and a global pandemic, and are currently waiting to see what happens on possible US tariffs — yet businesses remain extremely adaptable to whatever changes and challenges they encounter.”
