Most UK CEOs have had to adapt their strategic investment plans over the past 12 months in response to geopolitical and commerce policy developments. In accordance to EY-Parthenon’s CEO Outlook Survey, a 3rd delayed deliberate investment, with critical impacts on the companies downstream of their provide chain.
Silvia Rindone, managing accomplice for EY-Parthenon in the UK and Irelands, commented, “UK CEOs are recalibrating their strategies, demonstrating outstanding resilience and adaptableness, whereas additionally displaying a willingness to make daring choices in the face of ongoing geopolitical and financial uncertainty. Enterprise leaders should proceed to act purposefully in the 12 months forward by scaling up innovation and investing in their workforce to unlock new alternatives and drive worth creation.”
The survey of 100 UK CEOs discovered that 78% have altered their investment strategies, with 32% delaying a deliberate investment, 31% accelerating a deliberate investment and 9% stopping an investment due to geopolitical or commerce policy developments.
Supply: EY-Parthenon
In distinction, when EY-Parthenon polled world enterprise leaders, many extra appeared upbeat on their outlook. A 40% chunk stated they’d really accelerated a deliberate investment, forward of 31% who had postponed.
Regardless of feeling a extra unsure financial and geopolitical surroundings, nonetheless, 9 in 10 UK CEOs are feeling assured about their firm’s prospects for the following 12 months with 89% anticipating profitability development in 2026, though 47% anticipate will increase in working prices. Partially, this appears to be pushed by optimism over technological developments – one thing that has been powering optimism repeatedly in current years.
To that finish, EY-Parthenon’s survey discovered that 57% of UK respondents have been at present present process a big enterprise-wide transformation initiative, while 41% are planning to begin in the following 12 months. In the meantime, 51% of CEOs have been utilizing a change initiative to enhance their buyer engagement and retention.
Supply: EY-Parthenon
The most important a part of this stays investment in AI and rising know-how, with 96% of UK respondents saying they might be investing in rising know-how in the following 12 months – forward of the 92% assured in AI investments in the worldwide ballot – with 40% believing that investment in AI can be essential for his or her organisation to adapt in a shifting geopolitical and financial surroundings. Respondents have been additionally optimistic about their capability to appeal to and retain expertise, with 62% believing that investments in AI will assist them to keep present ranges of employment or rent new expertise over the approaching 12 months.
Nonetheless, while 9 in 10 stated they consider AI may have both a transformative or important affect on their enterprise mannequin or operations in the following two years, they’re additionally going through challenges when it comes to AI adoption. And 36% stated they’re involved with rising cyber dangers, adopted by excessive up-front operating prices (23%).
Rindone concluded, “Whereas there may be pleasure surrounding the potential of AI, the fact for CEOs is way extra nuanced. It’s important that enterprise leaders undertake a realistic strategy that acknowledges the transformative affect of AI whereas additionally addressing challenges corresponding to cybersecurity dangers, the regulatory panorama, and upskilling their workforce.”
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