www.pwc.com 2014 CEO Pulse Survey Presentation to the Dublin Chamber of Commerce Ann O’Connell, Partner, PwC 2014 CEO Pulse Survey • 9th year of the Survey • 256 Irish CEOs participated PwC 2 2014 CEO Pulse Survey • Business confidence higher than 2007 and pre-recessionary times PwC 3 2014 CEO Pulse Survey 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 PwC 4 2014 CEO Pulse Survey Some of the economic and policy threats… PwC 5 2014 CEO Pulse Survey Some of the business threats… PwC 6 2014 CEO Pulse Survey Business growth opportunities – sticking to what they know best 60% to target existing markets PwC 7 2014 CEO Pulse Survey 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% PwC 8 2014 CEO Pulse Survey Focus on exports PwC 9 2014 CEO Pulse Survey FDI • 92% confirmed their investment in Ireland is a success • 88% will increase or maintain investment in Ireland, up from 84% last year; PwC 10 2014 CEO Pulse Survey Factors critical to maintaining and/or increasing Ireland’s attractiveness as a location of choice for FDI PwC 11 2014 CEO Pulse Survey Talent – 69% said availability of key skills is an issue for growth, up from 60% last year PwC 12 2014 CEO Pulse Survey Over a quarter reported talent constraints significantly impacted their company’s performance over the last year PwC 13 2014 CEO Pulse Survey Room for improvement regarding certain talent related benchmarks PwC 14 2014 CEO Pulse Survey Government priorities PwC 15 2014 CEO Pulse Survey Managing global change – the megatrends and Ireland’s opportunity PwC 16 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. Asia Pac Asia Pac 2009 $21.3 trillion Annual population growth rate 2010 – 2050 (medium variant) Source: UN Department of Economic and Social Affairs PwC 2030 $55.7 trillion Spending of the Global Middle Class in 2005 US$ PPP Source: Data taken from OECD Development Centre Working Paper number 285, “The Emerging Middle Class in Developing Countries, January 2010. Proportion of the world population aged 60 years or more Source: UN report World Population Ageing 1950 - 2050 17 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. Economic centre of gravity; 1965 – 2050 GDP, market exchange rates Note: 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. Western economic dominance is a recent development GDP of G7 and E7 countries at US$ PPP Source: PwC Analysis PwC Source: PwC Analysis 18 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 by major region Source: World Urbanization Prospects: 2011 Revision, Produced by the UN Department of Economic and Social Affairs 2010 $3.8 billion 2030 $4.9 billion Percentage of population in urban areas, 2030 World urban population Source: UN Department of Economic and Social Affairs Source: World Urbanization Prospects: 2011 Revision, Produced by the UN Department of Economic and Social Affairs PwC 19 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%. The Food/ Water/Energy Nexus It takes 1,200 l of water to produce 1 kg of grain Water 7% of global energy consumption is used for delivering water. Food Energy 1-2% of cropland is needed to produce biofuels With a population of 8.3 billion people by 2030 we’ll need… Projected water scarcity in 2025 Source: International Water Management Institute 50% 40% 35% more energy more water more food Note: Orange indicates earlier years, Maroon indicates later years. Source: OECD; Dan Hammer, Center for Global Development PwC 20 Megatrend 5: Technological breakthroughs Breakthroughs in nanotechnology and other frontiers of research and development are increasing productive potential and opening up new investment opportunities. Venture capital and private equity attractiveness index Source: The Global Venture Capital and Private Equity Country Attractiveness Index, IESE Business School, 2013 The beginning of the “internet of things” Source: Cisco Internet Business Solutions Group, April 2011 “SMAC” PwC 21 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 PwC 22 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.