CEOs fear threat to globalism and struggle with millennial customers
CHIEF executives regard a return to 'territorialism' as the biggest threat to growth facing their companies in 2018.
This is according to the latest 'Global CEO Outlook' from international consulting firm KPMG.
The fears of CEOs come as a looming trade war between the United States and China threatens what had been many years of widespread international consensus on globalisation.
Just last Friday, Washington imposed $34bn (€29bn) of tariffs on Chinese imports into the US.
Beijing responded by saying that it would retaliate with a similar amount of tariffs on products from the US into China.
Interestingly, in the survey of 1,300 CEOs, a geographical difference in perceptions of risks has emerged.
In the US, where organisations continue to plough ahead with digital agendas, cyber security is ranked as the biggest risk when it comes to business growth.
In comparison, as China undergoes massive changes to tackle issues around pollution, it is no surprise that CEOs in the Asian economic giant have ranked environmental and climate change issues as their biggest concern.
Other concerns highlighted by CEOs include the risk posed by disruptive technology and operational risks.
Gary Reader, global head of clients and markets at KPMG, said that the increased political uncertainty around the world has to be factored into decision-making at boardroom level.
"Geopolitics now has to be seen on par with other strategic challenges and CEOs need to manage in an increasingly uncertain environment," Mr Reader said.
Meanwhile, in order to ensure their long-term growth, organisations need to appeal to the customer markets of the future, with millennials (those born between 1980 and 2000), in particular, seen as representing significant spending power. When questioned about the key challenges of meeting the expectations of this generation, almost half of the CEOs surveyed said that they are struggling to understand how their needs differ from previous generations.
More than a third said that they would need to reposition their business to respond to the changing needs.
Interestingly, the report finds a very definite geographical difference in CEOs understanding of how millennials differ from older consumers. In the Netherlands, companies are more likely to be focused on the challenge of understanding how millennials' needs differ from other generations, whereas companies in Japan view it as less of a challenge, the report finds.
In order to respond to the needs of the millennial generation, KPMG suggests that listening to the needs of the new generations will be "critical" as organisations appeal to a generation that has had access to the internet from a young age and is up-to-date with technology. "Organisations that listen to millennials will see that they respond well," said Carmen Bekker, brand and marketing partner at KPMG.
"They want to feel that what's important to them is also important to the organisation they're dealing with."
Among those taking part in the survey were CEOs from Australia, China, France, Germany, India, Italy, Japan, the Netherlands, Spain, the UK, and the US.