Embrace new tech or go under: CEOs
Half of global CEOs surveyed by audit and consulting firm PwC believe their firms will not be in business in 10 years’ time unless they adapt to technological change and new customer preferences.
The PwC 27th Annual Global CEO Survey asked more than 4,700 CEOs in 105 countries about their expectations for economic growth, climate change, technology and supply chains.
CEOs from SA were included in the survey.
The survey found 45% did not believe their businesses would be viable in a decade if they remained on their current trajectories up from 39% in 2023. CEOs from smaller firms were more likely to feel their firm’s existence was threatened.
The biggest driver of the need to reinvent was technology.
The survey found other factors pushing change include customer demands, government regulations, competitors and climate change.
The survey focused on the effect of generative artificial intelligence (AI), saying it “has all the hallmarks of a technology that could significantly change how companies operate”.
“It’s also approaching a critical juncture, seemingly poised to transform business models, redefine work processes and overhaul entire industries.”
The development of AI has been swift since large language model ChatGPT was launched in November 2022 and racked up 1-million users within five days as people generated text, recipes and poetry online.
In 2023, Silicon Valley firms, US regulators and well-known tech pioneers such as Elon Musk debated whether AI would transform companies or decimate jobs and damage society and should be reined in.
However, many CEOs surveyed were positive about its potential effect on their companies. They expect increased revenue, better product quality and improved customer trust because of AI.
“This trend is consistent with PwC’s Global Risk Survey 2023, which found that 60% of respondents see generative AI as mostly or fully an opportunity rather than a risk,” the survey report read.
Nearly 70% of CEOs expect that, in response, employees will need to develop new skills within the next three years.
A third of CEOs reported having adopted generative AI and they were the most likely to expect it to transform businesses in the next year.
Dean McCoubrey, who founded an educational start-up for tackling AI, called MySociaLife told Business Day it is obvious that AI is going to transform businesses. But, he said, “artificial intelligence is moving so fast it is incredibly difficult to predict what’s going to happen beyond a year”.
“I don’t think we can expect that [US] regulators are going to do anything useful [to limit AI tech], which means the pace and the trajectory of change [are] going to be stratospheric.”
He said businesses will still be viable, as machine learning could generate data and analysis far faster than humans.
“I think that businesses are going to generate more money, because of what’s possible.”
The question is, what are we going to look like as a society if humans are replaced, McCoubrey asked.
Arthur Goldstuck, owner of technology research firm World Wide Worx, said the use of AI in SA firms is widespread, but primarily as a support tool for existing employees rather than to replace them.
But the CEOs surveyed by PwC expect to cut jobs 5% or more this year due to the application of generative AI.
The survey report noted employees may be concerned about using AI to innovate as they fear losing their jobs.
“Ultimately, CEOs must embrace this as a new facet of their role: understanding, explaining and managing the inevitable tension between short-term job losses and longterm job creation potential from AI,” the survey said.