‘Indian CEOs bullish on outlook for 5 yrs’

There is optimism among Indian CEOs about the economy over the next three to five years, and they are willing to expand aggressively into new businesses, invest in technology, make acquisitions, and hire talent.

“Nearly two-thirds (62%) of Indian company CEOs anticipate a steady or positive global economic outlook over the next three to five years, despite present challenges and sombre macroeconomic projections for 2023,” according to a study by consulting firm Arthur D. Little.

Of the total, 33% are positive and 29% expect steady outlook. This compares with just 22% of global CEOs who expect a positive economic outlook.

The ‘Arthur D. Little’s 2023 CEO Insights research’ report studied 250 CEOs of businesses with annual sales of at least $1 billion. It included 21 CEOs of Indian companies. CEOs from manufacturing , financial services, telecom and technology, energy , healthcare and travel were interviewed for the study. However, 38% of Indian CEOs are pessimistic and cautious about the economy.

“The Indian CEOs said they will up their spending on new businesses and geographies; invest in technology as a differentiator and not just overcome covid induced challenges,” Barnik Chitran Maitra, managing partner at Arthur D. Little India and South Asia said.

With the economy set to sustain its growth momentum, 60% of Indian CEOs intend to boost spending while 33% aim to maintain spending levels. About 75% of the CEOs aim to beat or meet market growth.

Maitra said the company heads were keen on environmental, social, and governance (ESG)-led businesses and wanted to enter areas like green hydrogen and recycling. “It is now offensive and not defensive spending,” he said.

The report noted that the CEOs were simultaneously developing “true ambidextrousness by integrating this innovation with a laser-like focus on cost efficiency”.

Company leaders using artificial intelligence (AI) and robotics to overhaul businesses comprise a majority 60% who want to explore new technologies, while 27% believe the metaverse and virtual reality will impact their businesses.

Maitra said supply chain remains a challenge along with inflation and high input costs. Getting the right talent for new businesses is a hurdle and CEOs are trying to strike a balance between lateral hires and internal upskilling.

Companies are looking at external sources, including startups for picking up leadership talent.

About 80% of CEOs believe focusing on ESG delivers a competitive advantage, rather than simply being a compliance cost. In fact, 41% of CEOs rank it as a higher priority than all other initiatives.

However, the company heads are not looking at dramatic reorganization of their firms and are focussing on agile workplaces where teams work across functions.

Compared to just 25% of CEOs in North America and 10% in Asia, 38% of CEOs in Europe’s top 5 economies—France, Germany, Italy, Spain, and the UK—expect to see a positive economic outlook over the next 3–5 years. About half of global CEOs who are keen on growth despite global recessionary conditions believe they will expand into new regions, while 30% anticipate growing faster than the overall market. Even cautious CEOs anticipate increasing growth investments, with 40% planning to raise spending and 55% holding expenditures steady.