Generative AI (Gen AI) is becoming a focal point for investment among Australian and global CEOs despite economic uncertainties, according to KPMG International's annual CEO Outlook survey.
The survey, which included 1,325 CEOs from 11 leading economies, revealed 58% of Australian CEOs and 64% of global CEOs see Gen AI as a top priority for investment.
The report highlights that CEOs remain confident about company growth over the next three years, even as economic concerns loom. 86% of Australian CEOs are optimistic about their growth prospects, with some predicting business expansion of up to 20%. However, 64% of Australian CEOs feel increased pressure from the previous year to ensure their companies' long-term prosperity.
"Our research indicates a strong commitment to Generative AI, with most CEOs expecting a return on investment within three to five years. They cite increased efficiency and productivity from automating tasks as key benefits," stated Andrew Yates, CEO of KPMG Australia.
Despite these optimistic views on AI, only 42% of Australian and 35% of global CEOs believe their organisations' data are ready for safe and effective Gen AI integration. Moreover, 60% of Australian and 63% of global CEOs are concerned about the ethical implications of AI implementation.
The survey also finds that CEOs do not anticipate Gen AI causing job reductions. Instead, 72% of Australian and 76% of global leaders expect no impact on staff levels, viewing the technology as a means to boost job productivity rather than a replacement for human roles. However, only 40% of Australian CEOs believe their employees currently have the necessary skills to benefit from Gen AI, prompting half of the respondents to reconsider workforce training and development.
In terms of economic outlook, 88% of Australian CEOs remain confident in the national economy, a sentiment slightly higher than the 78% of global leaders who share optimism about their own countries' economic conditions. A strong 78% of Australian and 74% of global CEOs are also positive about their industry sectors.
Workplace dynamics are also shifting, with 82% of Australian CEOs predicting a return to traditional office settings for white-collar roles within the next three years. This is a significant increase from 66% in the previous year. Only 27% foresee hybrid roles, and none predict a fully remote workforce. Additionally, 78% of Australian CEOs are likely to reward staff who regularly attend the office.
Environmental, social, and governance (ESG) issues have also seen increased focus, with 82% of Australian CEOs indicating a willingness to divest profitable business segments if they damage company reputation, up from 54% last year. Meanwhile, 26% of Australian CEOs expressed concerns that failing to meet ESG expectations could threaten their job security.
Confidence in meeting sustainability goals is high, with 70% of Australian CEOs believing their companies will achieve net zero emissions by 2030. The primary obstacles include decarbonising supply chains and a lack of necessary skills and expertise for implementation.
On the issue of social responsibility, 62% of Australian CEOs agreed that businesses are expected to take the lead on inclusion, diversity, and equity as trust in government declines. There is also agreement on the importance of developing skills within local communities to ensure a talent pipeline for the future.
In summary, the 2024 KPMG Global CEO Outlook reveals a landscape of cautious optimism balanced with significant investment in technology, particularly Gen AI, and a focused approach towards ESG and workforce development. CEOs are navigating complexities but remain hopeful about future growth and the broader economic environment.
