2014 ceo pulse survey presentation to the dublin chamber of commerce ann o’connell, partner, pwc

2014 CEO Pulse Survey

Presentation to the Dublin Chamber of Commerce

www.pwc.com

Ann O’Connell, Partner, PwC

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• 9th year of the Survey

• 256 Irish CEOs participated

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• Business confidence higher than 2007 and pre-recessionary times

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The pendulum has swung

• 77% of business leaders expect revenue growth compared to 71% in 2008

• 69% of business leaders expect profit growth compared to 60% in 2008

• 58% expect to grow the workforce compared to 54% in 2008

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Some of the economic and policy threats…

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Some of the business threats…

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Business growth opportunities – sticking to what they know best

60% to target existing markets

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Focus on exports

66% plan to increase export volumes in the next 3-5 years

Of this, 32% plan to increase export volumes more than 10%

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Focus on exports

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FDI

• 92% confirmed their investment in Ireland is a success

• 88% will increase or maintain investment in Ireland, up from 84% last year;

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Factors critical to maintaining and/or increasing Ireland’s attractiveness as a location of choice for FDI

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Talent – 69% said availability of key skills is an issue for growth, up from 60% last year

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Over a quarter reported talent constraints significantly impacted their company’s performance over the last year

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Room for improvement regarding certain talent related benchmarks

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Government priorities

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Managing global change – the megatrends and Ireland’s opportunity

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Megatrend 1: Demographic shifts

Explosive population growth in some areas against declines in others contributes to everything from shifts

in economic power to resource scarcity to the changes in societal norms.

Spending of the Global Middle Class in 2005 US$ PPP

Asia Pac

Asia Pac

2009 $21.3 trillion

2030$55.7 trillion

Source: Data taken from OECD Development Centre Working Paper number 285, “The Emerging MiddleClass in Developing Countries, January 2010.

Annual population growth rate 2010 – 2050 (medium variant)

Source: UN Department of Economic and Social Affairs

Proportion of the world population aged 60 years or more

Source: UN report World Population Ageing 1950 - 2050

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Megatrend 2: Shift in global economic power

The focus of global growth has shifted. Western economic dominance is a relatively recent phenomenon and the developments we see are essentially a rebalancing of the global economies.

Source: PwC Analysis

Western economic dominance is a recent development

Economic centre of gravity; 1965 – 2050

GDP, market exchange ratesNote: Orange indicates earlier years, Maroon indicates later years. Source: Data taken from OECD Development Centre Working Paper number 285, “The Emerging Middle Class In Developing Countries,” January 2010.

GDP of G7 and E7 countries at US$ PPP

Source: PwC Analysis

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Megatrend 3: Accelerating urbanisation

In the 1950s, less than 30% of the world’s population lived in cities. Currently, that proportion has risen to 50% and, by 2030, the UN projects that some 4.9 billion people will be urban dwellers. By 2015, the UN estimates that there will be 22 mega-cities – those with population of 10 million or more – with 17 located in developing economies. World urban population

Source: World Urbanization Prospects: 2011 Revision, Produced by the UN Department of Economic and Social Affairs

2010 $3.8 billion

2030$4.9 billion

World urban population by major regionSource: World Urbanization Prospects: 2011 Revision, Produced by the UN Department of Economic and Social Affairs

Percentage of population in urban areas, 2030

Source: UN Department of Economic and Social Affairs

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Megatrend 4: Climate change and resource scarcity

Scarcity of resources and the impact of climate change are of growing economic concern. Demand for energy is forecast to increase by as much as 50% by 2030, and water withdrawals by 40%.

35%more food

40%

more water

Projected water scarcity in 2025Source: International Water Management Institute

With a population of 8.3 billion people by 2030 we’ll need…

Food

It takes 1,200 l of water to produce 1 kg of grain

7% of global energy consumption is used for delivering water.

1-2% of cropland is needed to produce biofuels

Energy

The Food/ Water/Energy Nexus

Water

Note: Orange indicates earlier years, Maroon indicates later years. Source: OECD; Dan Hammer, Center for Global Development

50%more

energy

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Megatrend 5: Technological breakthroughs

The beginning of the “internet of things”Source: Cisco Internet Business Solutions Group, April 2011

Venture capital and private equity attractiveness index

Source: The Global Venture Capital and Private Equity Country Attractiveness Index, IESE BusinessSchool, 2013

Breakthroughs in nanotechnology and other frontiers of research and development are increasing productive potential and opening up new investment opportunities.

“SMAC”

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Summary

• Economy is turning the corner

• Confidence is somewhat restored

• Most companies are going for growth (revenues, profits, employment)

• FDI flow continues; Exports on the increase

• But, concerns around talent and increasing cost base

• Ability to attract, retain and reward talent is critical for growth

Thank you

This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

© 2014 PricewaterhouseCoopers. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

2014 ceo pulse survey presentation to the dublin chamber of commerce ann o’connell, partner, pwc

Documents

pwc slide

ceo pulse survey talent

ceo pulse survey focus

ceo pulse survey fdi

ceo pulse survey room

ceo pulse survey presentation

pwc megatrend

focus of global growth