Business leaders are starting 2024 with an increased level of optimism about their organisation’s future growth compared to 12 months ago, according to a report from Capgemini Research Institute.
With data collected in November 2023, the study covers 2,000 respondents from firms with more than $1 billion in annual revenue across 10 industries and 15 countries — the United States, United Kingdom, France, Germany, China, Japan, The Netherlands, Italy, Canada, Brazil, Spain, India, Australia, Sweden and Singapore.
According to the report, 56% of business leaders retain confidence in their organisation’s future growth despite current macroeconomic headwinds, up from 42% 12 months ago.
However, less than a third of them are optimistic about the global operating environment.
“Business leaders are beginning the year with an increased sense of confidence compared to 12 months ago, with technology and AI set to drive the next phase of the transition towards a more digital and sustainable global economy,” said Aiman Ezzat, CEO at Capgemini.
Ezzat deems it as good news that business leaders are increasing investments in a wide array of critical business areas from customer experience and innovation to talent and supply chains, and perhaps even more importantly sustainability.
“We have only scratched the surface of what digital tools and technologies, in particular AI, can achieve to reach these business objectives,” he said.
Digital tools and technologies are the key focus of investment, starting with AI, as business leaders increasingly realise the power of AI and generative AI to drive innovation and unlock revenue growth. Among respondents, 88% plan to focus on that technology.
Business leaders expect that critical decision-making will be assisted by AI in five years from now. The life sciences industry appears to be leading the way, with nearly half of critical decision-making expected to be supported by AI in five years.
However, a majority of business leaders across sectors also emphasise that human judgment is more critical than ever in an AI-driven world.
Cybersecurity remains critical, with 61% of business leaders now considering cybersecurity threats a leading risk to business growth – up considerably from 39% in 2023.
Also, the learnings taken from Covid lockdowns have driven an increase in near-shoring and friend-shoring solutions for procurement, reducing exposure to macro-economic and logistical turbulence.
Just under half (45%) of business leaders say that a significant proportion of their procurement will be friend-shored in the future, and 49% state that they are investing in other emerging economies to reduce reliance on China.
Further, scarcity of talent with the right skills ranks among the top business risks for nearly three in every five organisations (up from a third last year).
As organisations plan and implement their “return-to-office” policies, a quarter also plan to increase investments in office space, up from only 4% last year. However, organisations also believe that flexible and hybrid work engagements are here to stay.
