Local execs’ confidence fragile amid tech shift

Local execs’ confidence fragile amid tech shift | Daily Tribune

Reinvention an imperative

While CEOs are optimistic, they said they are faced with several challenges.

The survey further revealed that almost three-fourths (71 percent) cite the lack of workforce skills as inhibiting their ability to reinvent their business model to at least a moderate extent, 69 percent point to a lack of technological capabilities in their company, and 75 percent point to competing operational priorities.

As the pressure to adapt rises, the study stressed that more CEOs will prioritize big moves to support business model reinvention.

Although this is necessary, it’s rarely sufficient.

PwC research finds that top companies focus not only on their business model but also on the operating and technology models that enable it — and they do so continuously.

The mindset change and management challenges involved are huge.

To win, leaders must consider a broader range of initiatives — and apply them in combination.

Investing in service partnerships to close operating-model capability gaps and keeping pace with technology advancements allow the company to focus on what it does best.

Despite the Philippines-based CEOs’ concern about their long-term business viability, the proportion who believe global economic growth will improve over the next 12 months has grown to more than half (57 percent), slightly higher than the Asia Pacific average (40 percent).

They consider the US and China as critical for their growth prospects in 2024.

PwC Philippines Deals and Corporate Finance managing partner Mary Jade Roxas-Divinagracia said: “In the years leading up to the survey period, the country achieved consistent GDP growth rates of around 6–7 percent annually. And in the first quarter of 2024, we saw a year-on-year growth of 5.7 percent. The Philippines has undertaken efforts to improve its investment climate and attract foreign direct investment. This sustained growth and the positive investment climate could have promoted optimism among CEOs regarding both local and global economies.”

Tech presents opportunity

CEOs overwhelmingly see Generative AI as a catalyst for reinvention that will power efficiency, innovation and transformational change.

At least 60 percent of Philippines-based CEOs anticipate impacts within three years — including impacts to the workforce (vs. at least 57 percent in Asia Pacific).

Moreover, they also expect better outcomes for their business — 57 percent expect GenAI to positively impact revenue and profitability (versus 49 percent in Asia Pacific).

PwC Philippines chairman and senior partner Roderick Danao shares: “Just this month, we’ve seen the heightened interest of business leaders in GenAI during the Manila speaking tour of Scott McLiver, Partner and Asia Pacific Leader in GenAI. Their enthusiasm over the opportunities for growth and innovation that GenAI brings demonstrates their understanding of the need for fundamental reinvention of their businesses.”

But while CEOs are increasingly looking to the transformative benefits of GenAI, the great majority say it will require workforce upskilling (80 percent).

They have also expressed concern about an associated rise in cybersecurity risk (69 percent versus 49 percent in Asia Pacific) and misinformation (57 percent versus 44 percent in Asia Pacific).

CEOs report climate progress

Meanwhile, Philippines-based CEOs are making progress in turning their commitments into action.

Three-fourths (75 percent) have either begun or completed steps to improve energy efficiency, while 74 percent report having made similar strides when it comes to innovating new, climate-friendly products, services, or technologies.

On the other hand, 68 percent note having made progress on or completed initiatives to protect their physical assets and/or workforce from the physical impacts of climate risk. However, 26–31 percent noted no plans to pursue other types of action related to just transition and nature.

Philippines-based CEOs cite regulatory complexity (54 percent versus 63 percent in Asia Pacific) and lack of climate-friendly technologies for their sectors (54 percent versus 59 percent in Asia Pacific) as the biggest barriers to be overcome. CEOs are beginning to take on the economic barrier, with four in ten reporting that they have accepted lower hurdle rates for climate-friendly investments than for other investments (43 percent versus 51 percent in Asia Pacific).

Roderick Danao concludes: “The impetus to reinvent is intensifying. Many of our country’s business leaders are now working on accelerating the transformation of their business models, investing in technology and their workforce, and managing the risks and opportunities related to climate change. In this era of continuous reinvention, CEOs have vast opportunities to reshape their organizations, and themselves, to thrive on disruption, and transform aspirations into realities.”