​Who dares wins - Bullish Aussie CEOs target tech investment

​Who dares wins - Bullish Aussie CEOs target tech investment

Innovation, transformation and technology key strategic drivers.

Australian CEOs have stronger optimism about future growth prospects compared to global counterparts, with innovation, transformation and technology cited as key strategic drivers.

Findings from the 2016 KPMG Global CEO Outlook Study reveal such optimism, despite 15 percent of Australian CEOs confirming that business has experienced either flat or negative growth over the past three years compared to global.

Locally, 92 percent of leaders across the country remain upbeat on the world economic growth outlook, compared to 80 percent globally.

According to KPMG, corporate leaders recognise that to achieve growth, they must focus more clearly on the increasingly competitive landscape, with global CEOs characterising the short to medium term as a time that will bring unprecedented change.

While a majority of global CEOs see challenges ahead, with expected moderate economic growth, they are optimistic they can successfully manage through the environment - the next three years are seen by 72 percent to be more critical than the previous 50 years.

Closer to home, Australian leaders (75 percent) are more concerned about the critical three-year outlook than global counterparts, but also express greater confidence with a more bullish attitude.

“The motto ‘who dares wins’ could be adopted for Australian CEOs,” KPMG Australia Chairman, Peter Nash, said.

“They are taking on more risk than their global counterparts but they are also more confident about the medium term outlook.”

Growth outlook

On the operational side, KPMG Australia CEO, Gary Wingrove, pointed to the survey result showing almost half of global CEOs (48 percent) and a significant number of Australian CEOs (43 percent) expect to achieve top line growth of 2-5 percent in the next three years.

“It’s significant that both global and Australian CEOs are more confident about the growth outlook expressed in top line terms, but that Australian CEOs say they will depend far more on new markets to drive growth than their global counterparts,” he said.

A third of Australian CEOs (36 percent) say new markets will be the most important source of growth (compared to 25 percent globally). Locally, new customers rank second as a growth driver (28 percent); new channels third (19 percent) and new products last (17 percent).

Focus on innovation

The focus on innovation was a key highlight of the report findings, with Wingrove noting that for Australia, Prime Minister Malcolm Turnbull’s ‘National Innovation and Science Agenda’ appeared to have struck a chord with the local CEOs surveyed.

“The trend of support for innovation expressed in the 2015 global CEO Study continues this year,” he added.

“Twenty-eight percent of Australian CEOs nominated ‘fostering innovation’ as one of their top three strategic priorities - compared to 21 percent globally. Only Chinese CEOs nominated this as a greater priority area (43 percent).”

Wingrove noted that for Australian CEOs the competitive market and technology, rather than economic conditions, were now top of mind.

“Strategically, innovation has come to the fore,” he said. “It is significant that 45 percent of Australian CEOs say they are taking an ‘accelerated’ approach to innovation compared to 35 percent globally.”

Wingrove said it was also interesting that Australia was more concerned about implementing disruptive technology (28 percent) than global (18 percent), but that both local and global leaders had named a stronger client focus as a top growth priority (19 percent / 17 percent).

Key strategic drivers

Looking globally, Nash said that with volatility in world markets and the increasing speed of change, CEOs across the world were reshaping their strategies.

“We are in a time of transformation and it’s a positive finding that an increasing number of both global and Australian CEOs are addressing disruptive change,” he said.

“Global CEOs particularly have recognised the pace and nature of change but say they are still optimistic about growth prospects for their company, their industry and the global economy.”

Nash noted that last year, the 2015 KPMG Global CEO Outlook Study showed CEOs were ‘somewhat confident’ about growth, but had concerns around short-term uncertainties.

“They had widespread plans to focus on hiring staff, while navigating the challenges of disruption and innovation - but the speed of transformation had intensified around the world since then,” he added.

Top concerns

Nash said global leaders recognised the demands of the increasingly competitive business environment with 70 percent expressing concern about ‘mission critical’ issues compared to only 64 percent of Australian CEOs.

On the global front, the top concerns for CEOs were customer loyalty (global 88 percent / Australia 79 percent) and the impact of the global economy (Global 88 percent / Australia 87 percent).

In addition, time pressure was the third most significant concern for global leaders with 86 percent saying they lacked time to think strategically about disruption and innovation.

Meanwhile, Australian CEOs were even more time pressured, with 94 percent squeezed for the personal time needed to consider these drivers.

“Both global and Australian CEOs named innovation, digital transformation and disruption as their key strategic drivers,” Nash added.

Nash added that the impact of millennials (global 86 percent / Australia 79 percent), integrating automation such as artificial intelligence and cognitive (global/ Australia both 85 percent), and keeping abreast of product and services developments (global 85 percent / Australia 81 percent) were amongst the top CEO concerns in this space.

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