KPMG 2024 India CEO Outlook

The KPMG 2024 CEO Outlook surveyed CEOs globally and in India on their three-year outlook on the business and economic landscapes. The confidence of CEOs in India in terms of growth prospects for the global economy over the next three years has considerably increased to 80 per cent in 2024 from 69 per cent in 2023. This substantial increase highlights a renewed optimism and determination in navigating long-term growth trajectories. Conversely, the level of confidence of CEOs in India in their own company’s growth prospects has declined to 68 per cent from 71 per cent in 2023, mirroring a slight decline of 76 per cent observed, when it comes to CEOs globally in comparison to 77 per cent in 2023. This indicates while overall economic recovery continues, executives remain cautious due to lingering uncertainties stemming from geopolitical complexities, economic instability, and rapid technological advancements.

The confidence of CEOs in India and globally in growth prospects for the country remains unchanged in 2024 from 2023 levels. This stability supports business confidence of CEOs in India and globally to pursue both organic and inorganic growth opportunities.

While external threats like geopolitical tensions and political instability have receded, CEOs now face a new set of internal challenges, including operational difficulties with the constant emergence of new and disruptive technologies. The evolving risk landscape has also shifted the perception of CEOs, with 16 per cent CEOs in India (in comparison to 10 per cent of CEOs in India in 2023) and 14 per cent CEOs globally considering operational issues as the greatest threat to their organisations' growth. Furthermore, reputational risk, including misalignment with customer and public sentiment, has emerged as one of the top three threats for CEOs in India, alongside cybersecurity, emerging/disruptive technologies, and environmental/climate change. 70 or higher percent of CEOs in India believe that factors such as the cost of living, trade regulations, cybercrime and cyber insecurity, and talent shortages would negatively impact their organisation’s prosperity over the next three years.

There is growing commitment towards generative AI among CEOs in India as well as globally, with majority of them expressing their intention to invest in the technology to drive the change.

CEOs in India believe that generative AI will increasingly be utilised to drive productivity gains and value creation across the workforce, with 18 percent CEOs in India compared to 16 per cent CEOs globally agreeing with the statement.

Additional key benefits that CEOs in India view as major advantage of implementing generative AI technologies include, new product and market growth opportunities (12 per cent), fraud detection and cyber-attack response (12 per cent), increased profitability (12 per cent), increased innovation (11 per cent), and upskilling the workforce for future readiness (11 per cent).

71 per cent CEOs in India compared to 76 per cent CEOs globally report having a solid understanding of the ways in which generative AI can enhance their organisations' performance and secure a competitive edge. At the same time, they are also apprehensive about the pace of progress on generative AI regulations, with 77 percent of CEOs in India as opposed to 69 per cent globally agreeing with this sentiment.

CEOs in India find are finding themselves at crossroads, grappling with the challenge of deploying AI to drive growth and shareholder return, while ensuring that the ethical human impact of the technology is not compromised. Therefore, ethical challenges are a major concern, with 64 percent CEOs in India compared to 61 percent CEOs globally tagging it as a significant obstacle to adopting generative AI in their organisations'.

CEOs exhibit a neutral stance regarding their readiness to implement generative AI, especially when it comes to data security. 56 percent CEOs in India compared to 58 percent of global CEOs cited that they neither agree or disagree that they are confident of being data ready to deploy generative AI safely and efficiently.

Half of the surveyed CEOs in India and around 56 percent of the CEOs globally neither agree nor disagree that their employees possess the right skills to fully leverage the benefits of generative AI, while 86 percent CEOs in India compared to 76 percent of the CEOs globally believe that generative AI will not impact the number of jobs, but will require upskilling and existing resources to be redeployed.

Moreover, 66 percent CEOs in India compared to 58 percent CEOs globally concur that the integration of generative AI has necessitated a reassessment of the skills required for entry-level roles.

CEOs in India are increasing investment in cybersecurity to protect their organisations' from potential threats posed by AI. Around 58 percent of the CEOs in India compared to 55 percent CEOs globally expressed confidence that their company's cybersecurity measures are capable of keeping pace with the rapid AI advancements. However, around 49 per cent CEOs in India compared to 59 percent of CEOs globally were uncertain about their organisations' capacity to secure suitable cybersecurity talent and solutions to defend against AI threats.

In the face of shifting workforce dynamics and challenges posed by both internal and external factors, growth-focused business leaders are recalibrating their social contracts to meet the changing expectations of current and future talent, while keeping long-term organisational growth in mind. According to the KPMG 2024 CEO Outlook survey, CEOs in India are taking a firm stance on returning to pre-pandemic, in-office work models. 78 per cent CEOs in India, compared to 83 per cent CEOs globally, envision a return to an in-office working environment for their employees within the next three years.

To facilitate this, 91 per cent of CEOs in India compared to 87 per cent CEOs globally are prepared to reward employees who consistently come into the office with promotions, raises, and more favorable assignments. In 2024, 22 per cent of CEOs in India, compared to 20 per cent in 2023, have emphasized that enhancing the employee value proposition to attract and retain top talent will be their primary operational priority for achieving long-term growth objectives.

This trend underscores the commitment of CEOs in India and around the world to support a smooth transition back to traditional work models, ensuring seamless integration for their employees while aligning with their growth strategies.

59 per cent of the CEOs globally are focusing on investing in new technologies and only 41 per cent are placing more capital investment in developing their workforce's skills and capabilities to drive growth and transformation within their organisations’. On the contrary, CEOs in India are equally emphasising on the importance of developing workforce skills and capabilities alongside technological investments.

The KPMG 2024 CEO Outlook survey indicates that 83 per cent CEOs in India perceive labor market shifts, particularly an aging workforce, as having a moderate impact on their organisations' employee recruitment, retention, and overall culture. Conversely, only 64 per cent of CEOs globally share this view, with 13 per cent believing the impact will be minimal.

CEOs have started considering ESG as an integral part of their corporate strategy, particularly in the context of enhancing customer relationships and bolstering brand reputation. 30 percent of CEOs in India compared to 34 percent globally have cited building customer relationships and positive brand association as the top area where ESG would have the most impact, followed by shaping capital allocation, partnerships, alliances and M&A strategy, and attracting next generation of talent.

Further, it is evident that leaders are prepared to undertake measures in response to ESG concerns. A significant majority, 66 percent of CEOs in India compared to 76 percent CEOs globally, have indicated they would be willing to divest a profitable part of the business that was damaging their reputation.

More than half of the CEOs in India (54 per cent) compared to CEOs globally (60 per cent) agree that there is strong public expectation on businesses to address societal challenges, including inclusion, diversity, equity, social justice and climate change.

However, there remains a degree of uncertainty among CEOs regarding their ability to achieve their Net Zero objectives by 2030. A mere 36 percent of CEOs in India compared to 51 percent of CEOs globally concur that they possess the confidence to meet these goals.

CEOs in India ( 56 per cent) as well as globally (55 per cent) perceive that their stakeholders' expectations with regard to ESG change faster than they are able to adapt their strategy, which is a major obstacle in achieving their ESG objectives.
 

About KPMG’s CEO Outlook

The tenth edition of KPMG CEO Outlook, conducted with 1,325 CEOs of which 125 were from India, between 25 July and 29 August 2024, provides unique insights into the mindset, strategies, and planning tactics of CEOs.

All respondents have annual revenues of over USD500 million and one third of the companies surveyed have more than USD10 billion in annual revenue. The survey included leaders from eleven markets (Australia, Canada, China, France, Germany, India, Italy, Japan, Spain, UK, and US) and eleven key industry sectors (asset management, automotive, banking, consumer and retail, energy, infrastructure, insurance, life sciences, manufacturing, technology, and telecommunications).

NOTE: some figures may not add up to one hundred per cent due to rounding.