According to the 27th Annual CEO survey by PwC, as much as 73 percent of CEOs in the region believe Generative artificial intelligence (GenAI) will significantly change the way their company creates, delivers, and captures value in the next three years.
A quarter of the regional CEOs expect that GenAI will result in job creation in the next 12 months, while 77 percent believe that it will improve work efficiency, and 63 percent anticipate increased revenue on the back of its adoption. Also, 38 percent of our CEOs believe embracing GenAI will give them a significant competitive edge, and almost half indicated they have already changed their tech strategy to leverage its opportunities.
The launch of advanced large language models, such as Falcon and Jais in the UAE, positions the Middle East at the forefront of developing and harnessing Generative AI, and regional CEOs are embracing the technology.
Optimism about revenue growth
Middle East CEOs are expressing optimism about revenue growth. However, almost half of these CEOs believe that their businesses may not remain economically viable in the next ten years if they fail to adapt to the disruptions caused by technology and climate change. The survey collected insights from 4,702 executives across 105 countries.
In the Middle East, 73 percent of CEOs, and 81 percent of CEOs from the Gulf Cooperation Council (GCC) countries, anticipate an improvement in regional economic growth in the upcoming year. These figures significantly surpass the global average of 44 percent among CEOs. As a result, 66 percent of Middle East CEOs expect substantial increases in their revenues over the next three years, and 65 percent of them plan to expand their workforce in 2024.
Top threats on CEOs’ risk agendas
The survey also highlights the top threats on the regional CEOs’ risk agendas, including geopolitical conflicts, inflation, and cyber risks. Nonetheless, the region is experiencing a rapid and extensive transformation as it focuses on digitization, decarbonization, localization, privatization, and modernization. Middle East CEOs are aware of the challenges associated with this transformation, with 48 percent expressing skepticism about their company’s future economic viability if they do not evolve.
In response to these challenges, CEOs are reinventing their businesses. More than half of them are prioritizing diversification of their products and services, and two-thirds consider tech innovation as a crucial area of focus for the next three years.
Read more: 61 percent of CEOs anticipate improved regional economic growth
Reflecting on the survey conducted this year, Hani Ashkar, senior partner, PwC Middle East, remarked that the previous year acted as a period of transition for the world economy. Despite a decrease in global growth rates, the Middle East has demonstrated resilience by embracing digital transformation and bolstering non-oil industries, leading to the creation of job opportunities.
Furthermore, Ashkar highlighted that businesses in the Middle East are actively adapting through the adoption of advanced technologies, including GenAI, and demonstrating a heightened awareness of issues such as climate change. This demonstrates a significant level of confidence and a dedicated commitment to reshaping the region for sustainable outcomes, he added.
Climate change
This year, leaders in the region have demonstrated a revitalized determination to tackle the climate crisis, with 36 percent recognizing climate change as a pivotal factor driving corporate change within the next three years. In terms of climate action progress, CEOs in the Middle East are generally aligned with their global counterparts. A significant 67 percent of leaders stated that their companies had ongoing or completed energy efficiency programs. Additionally, slightly over half of the CEOs reported that they were actively innovating climate-friendly products or services.
When asked about the obstacles to decarbonization, CEOs highlighted several challenges, including insufficient returns on investments in climate-friendly initiatives, regulatory complexities, and insufficient demand from stakeholders. These factors were identified as significant hurdles in the journey towards reducing carbon emissions and transitioning to more sustainable practices.
Seizing emerging opportunities
Stephen Anderson, Middle East Strategy leader at PwC Middle East, further commented: “Our survey results clearly indicate that leaders in our region are projecting greater optimism and confidence. CEOs must take advantage of emerging opportunities as they reinvent themselves with transformative technologies. As the world transitions towards clean energy, the Middle East will play an important role and it will be crucial to see how businesses lead the charge against climate change in a post-COP28 world.”
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