KPMG Survey: AI Adoption and Talent Strategy Shape Philadelphia’s Path to Growth

NEW YORK  - Philadelphia business leaders are betting on technology and talent in 2026, channeling internal optimism and confidence into investments in AI capabilities and workforce development, according to a new study released today by KPMG LLP, the U.S. audit, tax, and advisory firm.

The KPMG 2026 Perspectives: Local Insights from Philadelphia report finds a region preparing for growth through strategic investment, even amid broader economic uncertainty. With 84% of leaders confident in their company's prospects, businesses are translating optimism into action. AI transformation is driving regional strategy, with 91% of leaders planning to increase AI usage in 2026 and 80% simultaneously investing in upskilling their workforce to support this shift. Additionally, nearly half of respondents report a strong acquisition appetite, signaling confidence in strategic growth opportunities.

“Broader economic dynamics are prompting patience without halting execution,” said Dave Greed, Managing Partner, Philadelphia, KPMG LLP. “Organizations are investing in AI, upskilling talent, and aligning transaction timing to conditions to keep progress on track.”

The KPMG 2026 Perspectives: Local Insights from Philadelphia report surveyed 56 business leaders (45% C-suite; all VP-level and above) at companies with annual revenues of more than $50 million on the key challenges and opportunities in driving business growth in the city. Key findings are highlighted below.

Philadelphia business leaders see opportunity for growth despite broader economic uncertainty; confidence propelling strategic decisions.

GREED: “Philadelphia’s business outlook is optimistic, and leaders are backing this optimism with action. Companies are investing in technology despite economic uncertainty, policy gridlock and questions relative to measurable AI return on investment.”

• Philadelphia business leaders are confident in the growth prospects for their company (84%), their city (77%), industry (77%), state (73%), and country (71%) in 2026.
• 77% say AI will be a top investment priority for their organization in 2026 despite economic uncertainty.
• Issues top of mind for their businesses reflect emerging risks and the need for resilience in a rapidly changing environment.
  • The top three issues included: cybersecurity (70%), macroeconomic and market conditions (45%), and AI integration (43%).
• 58% of business leaders plan to increase their headcount, while 23% expect no change and 20% anticipate some type of reduction in 2026.
• Leaders expect technology and software (32%), financial services and insurance (27%), and healthcare and life sciences (20%) to drive the most economic growth over the next 12-18 months.

AI is a top investment priority as Philadelphia business leaders accelerate adoption while investing in their current workforce to drive transformation.

GREED: “The next wave of innovation is taking shape, and it’s driven by the combined power of both technology and talent. As businesses integrate AI and other emerging tools, they’re upskilling their people to ensure that progress enhances both performance and the human experience.”

• 91% plan to increase AI usage in 2026, and 80% are upskilling their current employees in AI to prepare for this transformation.
• 84% are providing AI education and training across their entire workforce.
• AI agent adoption is at varying stages: 46% are in the exploration phase, 29% are piloting, and 21% plan to deploy—reflecting organizations moving through implementation at different speeds.
• 88% agree that AI will automate specific tasks but will not replace roles entirely.
• 71% believe agentic AI will have a transformational impact on their organization.
• Despite this momentum, 66% anticipate some workforce reductions because of AI adoption and are planning accordingly.

Philadelphia businesses are doubling down on upskilling and regional advantages as AI reshapes roles and hiring strategies.

GREED: “Leaders are pursuing a practical path to workforce readiness in the region. Companies are offering growth pathways, flexible work and collaborative environments, while elevating AI competencies across job requirements.”

• 50% of business leaders agree that Philadelphia’s proximity to major Northeast hubs without the premium costs is a top competitive advantage for businesses.
  • Yet, 36% felt that retaining talent against higher-paying markets like New York City and Boston or attracting talent from other regions (25%) were among their the most critical workforce challenges.
• 70% of organizations prioritize hiring workers with AI skills, and 73% use AI tools in candidate screening.
• 55% are reducing entry-level hiring due to automation, while 73% are revising job descriptions to include AI-related competencies.
• Retention strategies emphasize career growth opportunities (36%), flexible work options (21%), and competitive pay (20%).
• 80% are creating spaces for connection and collaboration, while 75% encourage non-work events to strengthen relationships.

Deal activity remains steady for Philadelphia business leaders, with most planning to move in the second half of 2026 as they assess conditions.

GREED: “Deal appetite is healthy, but timing is deliberate. Most businesses are targeting the second half of the year as they weigh economic factors.”

• 41% describe their M&A appetite as high, planning acquisitions that will significantly impact their overall organization, while 32% anticipate moderate deal activity.
• 18% expect little to no M&A activity, and 9% are exploring being acquired, signaling some consolidation pressure in the market.
• 46% plan deals in the latter half of 2026 versus 27% early in the year—suggesting leaders are watching economic conditions.

Nation’s 250th Anniversary celebration expected to drive local economic growth.

• Leaders are bullish on Philadelphia’s economic boost from America’s 250th celebration – 50% expect the local economy to grow due to the festivities by 6-10%. Another 18% expect growth anywhere from 3-5%, while 16% expect 11-15% growth and 11% of respondents expect 16-20% growth.   

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