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Contents
Foreword
Overview
10
11
Transforming business
12
12
13
16
18
Hybrid leadership
19
20
22
Hani Ashkar
PwC Middle East Senior Partner
Overview
Middle East CEOs lead the way amongst their
global peers in being upbeat about the
economic future. Thats the very encouraging
headline from the 2014 PwC Middle East CEO
Survey. After a long period of just getting by,
CEOs in the region are now looking ahead
enthusiastically to sustained economic growth
over the next 12 months. At the same time, they
are making plans for a future that will offer
opportunities to those leaders who are prepared
to innovate and embrace technology-driven
change.
There remains a
marked difference
in the optimism
voiced by those
CEOs in the GCC
and those in the
Levant.
PercentageofCEOsstatingtheyareveryconfidentabouttheircompanysrevenue
growthprospectsoverthenextthreeyears
Figure 3 Revenuegrowth-Confidencelevelsaroundtheworld
PercentageofMiddleEastCEOsstatingtheyareveryconfidentabouttheir
companysrevenuegrowthprospectsoverthenext12months
Building business
close to home
Finding growth in a
rebalancing global
economy
New business
growth
opportunities
Globally, 35% of CEOs believe innovation in
new products and services will be the main
driver of business growth for their
companies over the coming 12 months. The
situation is a little different in the Middle
East where just 30% of CEOs share that
point of view (though thats a big jump
from last year when just 9% were prepared
to put their faith in new products and
services). Instead, regional CEOs see the
quick wins coming from increasing their
share of business in existing markets.
Its not all about inward investment though.
17% of Middle East CEOs (compared to 14%
globally) are looking to new geographic
markets for growth while 13% (compared
to 9% globally) see the potential in new
joint ventures or strategic alliances. Indeed,
there seems to be a growing commitment
from GCC companies to explore strategic
partnerships to help win bigger contracts,
improve pricing and take new products to
market.
Figure 4 Ofthesepotentialopportunitiesforbusinessgrowth,whichoneisthemain
opportunitytogrowyourbusinessinthenext12months?
Barriers to business
growth
Middle East CEOs hold a more upbeat view of
economic growth than the glass is half
empty consensus of their global peers but
risks do remain.
The CEOs we talked to identified three
potential economic and policy threats to
business growth in 2014. The biggest was a
lack of stability in capital markets according
to 72% of the executives surveyed. A majority,
70% also expressed concern about
Governments response to fiscal deficit and
debt burden, while 66% cited the threat of a
slowdown in high-growth markets.
policythreatstoyourorganisation?
Integrity and
compliance risks
In a globally-connected marketplace all
companies face a growing threat from the
most prevalent integrity risk. Chief amongst
these are risks related to bribery, corruption
and cybercrime. In PwCs new Global
Economic Crime survey, 53% of respondents
listed bribery and corruption as the greatest
future risk of doing business worldwide.
Figure 8 Howconcernedareyouaboutthefollowingpotentialbusinessthreatstoyourorganisation?
Government respone to
fiscal deficit and debt
burden
Slowdown in high-growth
markets
Figure 7 Global CEOs are turning back to certain advanced economies for growth
Q:Whichthreecountries,excludingthecountryinwhichyouarebased,doyouconsidermostimportantforyouroverallgrowth
prospectsoverthenext12months?
Availability of key
skills
Bribery &
corruption
Cybercrime
The role of
Government
Figure 9 ThinkingabouttheroleoftheGovernmentinrelationtoanumberofoutcomes,whichthreeareas
shouldbetheGovernmentspriorities?
Improving
infrastructure
Ensuring financial
sector stability
Creating
a skilled workforce
Developing
tomorrows
workforce
Transforming
Business
Figure 11
Understanding global
trends
Our world is changing and evolving at a rapid
pace and the Middle East is no exception.
Regional CEOs identified four major global
trends that look set to transform their business
over the next five years. Over 80% told us that
technological advances such as the online
economy, social media, mobile devices and big
data would have a major impact. 68% identified
a shift in global economic power, 57%
highlighted demographic shifts while 51% also
pointed to the effect resource scarcity and
climate change will have on the region and the
world.
Q:Which,ifanyofthesenationaloutcomesisyourorganisationfocusingonasapriorityoverthenext3years?
Creating
a skilled workforce
Creating
jobs for young people
Ensuring financial
sector stability
Figure 12 MiddleEastCEOsmarkthehighestfigurewhenaskedaboutincreasingheadcount
Q:Whatdoyouexpecttohappentotheheadcountinyourcompanyoverthenext12months?
The takeaway
Education and training remains the key to creating a skilled regional workforce but a
cultural shift also is necessary for Middle East youth to fulfil their true potential in
powering the regions economic growth.
Figure 13 Thenumberofconnecteddevicesisincreasingdramatically
The takeaway
Innovation isnt just about products. It involves adjusting and adapting your entire
operation and looking outside of the company for effective collaboration as well as
creating a culture within that can foster and encourage innovation.
The demands of a
new type of
customer
Customer growth and retention strategies are
equally as important to Middle East CEOs as
technology and innovation. Perhaps thats
because in tomorrows world they will be
impossible to separate.
Trying to forecast what the future looks like
for any business is notoriously difficult, yet in
the Middle East and other regions of high
economic growth demographic shifts offer
some indication about how future customers
will act and behave.
Customers in high growth and developing
markets are much younger - the average age
is just 26 - than those in the worlds advanced
economies. Whats more these customers are
more technologically sophisticated than ever
before and, moving forward, they will have
greater access to information about products,
services and corporate reputations than
companies have been used to dealing with.
Hybrid leadership
Q:Whatisyourcurrentplanninghorizon?
The takeaway
CEOs need to embrace the fact that a new, younger, type of consumer is emerging
a digital native with expectations about products, customer service and trust very
different from just 10 years ago.
Figure 14 ManyCEOswanttochangetheirplanninghorizon
Q:Ideally,whatwouldyoulikeyourplanninghorizontobe?
Measuring total
impact
Becoming fit for the future means more than
simply exploring new routes to market.
Increasingly companies realise they need to
measure their total impact as a business on
the societies they depend on for new
customers and the planet they depend on for
the resources they need to make their
products.
The takeaway
The realities of resource scarcity will be a business risk for many companies but also a
business opportunity in a region that will succeed economically through the necessity
of adapting.
Figure 15 Measuringanorganisationstotalimpacthelpstoshowthebestrouteforward
PwC17thAnnualMiddleEastCEOSurvey 23
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