Canadian CEOs optimistic about economic future, wary of global outlook
KPMG study shows most top executives see disruption as an opportunity, not a threat.
TORONTO — Canadian CEOs appear to be unfazed by the uncertainties driven by economic turbulence, geopolitical instability and technology, and they embrace disruption as an opportunity for growth, according to a KPMG study.
Most of the 51 Canadians, part of a global survey that looks at how they view their opportunities for growth over the next 12 months, are more optimistic than their 1,300 global counterparts.
Three-quarters of Canada’s CEOs see disruption as an opportunity, not a threat, and 86% are not waiting to be disrupted by competitors, but are actively disrupting their sectors. Almost all of the Canadians (98% compared to 74% of global CEOs) believe in three years they’ll be much the same company they are today.
KPMG reports strategic priorities have shifted significantly from 2016. Business digitization tops the Canadians’ lists, moving up from sixth place last year. It’s tied with limiting brand risk in an age of transparency, rising from fourth place.
Greater speed to market was second and stronger client focus, talent development and becoming more data driven tied for third.
Innovation, part of the government of Canada’s strategic economic agenda, is not among the top priorities.
To drive growth, 41% are prioritizing increased penetration in existing markets, 20% are vertically integrating their supply chains while only 16% are focusing on innovation.
Their global peers plan to drive growth by increasing penetration in existing markets (53%), focusing on innovation (47%), penetrating new verticals (32%) and expanding into new geographical markets (21%).
Confidence in global markets has declined to 43% from 81% last year, but 75% of CEOs are confident about Canada’s economic prospects and 83% believe their companies will grow over the next three years. But confidence in their industries is down (55% compared to 85% last year).
Sixty-three per cent are focusing on Central and South America, 31% are focusing on Canada and 24% see growth opportunities in the US.
With protectionist policies on the rise globally, 86% are bolstering their management teams to better understand geopolitical risk and 84% are spending more time on scenario planning.
Globally, 52% of CEOs believe the political landscape has had a greater impact on their organization than they have seen for many years and 31% think protectionist policies in their country will rise in the next three years.
Most of the Canadians (96%) believe tax rates will rise, 90% say inflation will rise and 80% expect interest rates to rise over the next three years; yet they’re confident their companies will experience top-line growth over the next 12 months.
Many are making headway preparing for cyber threats: 37% say they’re fully prepared for a cyber event, compared to their global counterparts at 42 percent. This is an improvement from 13% and 25% (respectively). But 63% of Canadian CEOs are only somewhat prepared for social media hacking and 59% are only somewhat prepared for a ransomware attack, an employee-led breach or a distributed denial of service attack.
Download the survey here.