EY CEO Outlook: AI Being Adopted as a Driver of Efficiency
Business leaders are continuing to adopt AI technologies to drive efficiencies and improve their organisations’ performance, according to the latest EY CEO Outlook Pulse survey.
The quarterly report shows CEOs are optimistic about their ability to drive revenue growth and profitability in 2024 despite global economic headwinds, with a significant majority of CEOs surveyed expecting an increase in revenue growth (64%) and profitability (63%).
This optimism comes despite acknowledgement of a continued challenging macroeconomic environment with three-quarters (76%) of CEOs expecting the global economy to continue to endure low or no growth.
“Even though CEOs expect continued stagnation of the global economy, this hasn’t dampened their drive for profitability,” Andrea Guerzoni, EY Global Vice Chair – Strategy and Transactions, says. “Exhibiting a newfound resilience and confidence, CEOs are on the hunt for opportunities to drive efficiencies and transform their business for growth.”
Transformation plans set to speed up, with CEOs embracing technology as a driver of efficiency
Underpinning the rise in CEO confidence is a rush toward strategic transformation. Over half (58%) of CEOs surveyed said they are accelerating their business transformation agendas – a significant leap, almost tripling from 21% in July 2023. In stark contrast, only 5% now report having no transformation plans, a fall from 37% in July 2023.
CEOs are also embracing technology as an efficient driver, with 41% looking to adopt AI to drive efficiency and bolster business performance. Interestingly, while surveyed CEOs embrace AI to deliver efficiencies, three in four (76%) agree the technology will have little impact on revenue growth.
“If 2023 was the year of transition as organisations grappled with a ‘poly-crisis’, 2024 is shaping up to be the year of action,” add Guerzoni. “With an acceptance that the costs of doing business are unlikely to fall to pre-pandemic levels, we’re seeing a shift in how CEOs approach business transformation, balancing optimism with pragmatism and focusing on efficiency and cost management.”
Geopolitical risks set to take center-stage, with potential AI election misuse a hot topic
With over half of the world’s population going to the voting booth over the next 12 months, CEOs are acutely aware of geopolitical risks and the potential business impact. Over three-quarters of those surveyed (78%) are worried about the potential rise of populist movements to increase geopolitical uncertainty and create business challenges. Three-quarters (76%) of respondents meanwhile were also concerned about the political misuse of AI in major 2024 elections.
While many CEOs feel confident about their organisation’s ability to integrate geopolitical turbulence into their decision-making, nearly half (48%) of respondents believe there is room for improvement in their defined and active processes for managing geopolitical risks. In fact, 98% of CEOs and PE leaders surveyed are having to make alterations to their investment plans including exiting certain businesses (32% of CEO respondents and 38% of PE respondents) or delaying a planned investment (42% of CEO respondents and 32% of PE respondents).
“The influence of the political world on the corporate world is as strong as ever, but this year we’re seeing another risk emerge – the rise of AI in political campaigning and the potential for its misuse,” Guerzoni concludes. “CEOs are well aware of the need to integrate geopolitical turbulence in their strategic plans. But with many still unsure about their risk management processes, now is the time to revisit and refine strategies to navigate through a volatile geopolitical landscape.”
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