pwc global ceo survey: 2013 key findings in the technology industry
DESCRIPTION
This report is a summary of our key findings in the technology sector, based on interviews with 154 technology CEOs in 38 countries, as well as an in-depth interview with Stephen A. Elop, CEO of Nokia. To see the full results of the 16th Annual Global Survey, please visit www.pwc.com/ceosurvey.TRANSCRIPT
Dealing with Disruption:16th Annual GlobalCEO SurveyKey findings in theTechnology industry
www.pwc.com/ceosurvey
January 2013
Welcome
Far-reaching changes are taking place, and they’re taking place faster than ever. In thisnew era of ‘stable instability’, risks that once seemed improbable and even remote havebecome the norm and for CEOs across the world, ‘expect the unexpected’ has become themantra. The only solution is to build organizations that can thrive amidst disorder:organizations that are agile and adaptable, able to cope with disruption and emergestronger than before.
We polled 1,330 CEOs in 68 countries, and talked face-to-face with another 33 CEOs, inour 16th Annual Global CEO Survey, to find out how they’re creating resilient
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our 16th Annual Global CEO Survey, to find out how they’re creating resilientorganizations that can flourish under stress. Dealing with disruption shows that CEOsare focusing on a few carefully selected initiatives to stimulate organic growth; exploringnew ways to attract and keep customers; and balancing efficiency with agility. And tosucceed in these three goals, CEOs are recognizing the role that trust plays, and thatthey’ll have to work hard to repair the bridges between business and society.
This report is a summary of our key findings in the technology sector, based on interviewswith 154 technology CEOs in 38 countries, as well as an in-depth interview with StephenA. Elop, CEO of Nokia. To see the full results of the 16th Annual Global Survey, pleasevisit www.pwc.com/ceosurvey.
2January 201316th Annual Global CEO Survey – Key findings in the technology industry
Technology sector sample demographics
29%
16%
8%
10%
Revenue
32%39%
Geography
37%
8%
8%
5%
15%
Subsector
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36%
$0 to $100M
$101 to $999M
$1 to $10B
Over $10B
Not stated
29%
Americas
Europe
Africa, Asia, Middle East, Australia
January 201316th Annual Global CEO Survey – Key findings in the technology industry3
26%
8%
Computers & Networking
Software/Information Technology
Semiconductor
Electronics Manufacturing/Distributors
Internet
Other
Contents
Page
Introduction 5
CEO confidence 7
What worries CEOs the most 9
How are CEOs responding?
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• Customer focus 15
• Prioritising innovation 18
• Global expansion 20
4January 201316th Annual Global CEO Survey – Key findings in the technology industry
Introduction
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Introduction
Technology CEOs are a lot like their peers across industries. They’re slightly less confidentthis year about the economic outlook.
But there are some key differences too. Competition and industry disruption are more of aconcern due to the fast speed of technological change. At the same time, 58% oftechnology CEOs (an increase of 6% from the prior year) are concerned about governmentover-regulation.
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over-regulation.
Technology CEOs are actively engaged in multiple actions to better prepare theirorganisations to deal with these challenges. They’re focused on customer growth,innovation and new products and services.
Let’s take a look at how.
6January 201316th Annual Global CEO Survey – Key findings in the technology industry
The disruptive decade
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of technology CEOs are confident theycan raise revenues over the coming year,compared to the total sample at 81%.
Even more technology CEOs (96%) areoptimistic about increasing revenue overthe next three years, compared to thetotal sample at 90%.
7January 201316th Annual Global CEO Survey – Key findings in the technology industry
Employment growth
In line with their peers across industries, 44% of Technology CEOs expect to increaseheadcount, and just 16% expect to decrease headcount in contrast to 23% across allindustries.
30
35
40
Q: What do you expect to happen to headcount in your company globally over the next 12 months?
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3 2 11 35 12 13 194
514 28 22 12 11
0
5
10
15
20
25
30
Decreased bymore than 8%
Decreased by5-8%
Decreased byless than 5%
Stayed thesame
Increased byless than 5%
Increased by5-8%
Increased bymore than 8%
Technology Total sample
Base: All respondents (Total sample, 1,330; Sector, 154)
Source: PwC 16th Annual Global CEO Survey 2013
8January 201316th Annual Global CEO Survey – Key findings in the technology industry
What worries CEOs the most?
“The global economic outlook for 2013 and for the next three yearsseems very uncertain to me. Countries would seem to fall into twocategories. The first category concerns mature markets. The US hasan advantage over Europe in that the US economy seems more flexibleand more able to regenerate and kick-start itself. Europe, however, hasa more rigid structure. The second category concerns new economies,
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a more rigid structure. The second category concerns new economies,which have brighter prospects.”
Jean-Pascal Tricoire, President and CEOSchneider Electric SA, France
Technology CEOs continue to battle withpolitical threats against growth...
62%
87%
58%
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2012 Technology: 60%2013 Total Sample: 71%
are concerned aboutgovernment
response to fiscaldeficit & debt
burden
10January 201316th Annual Global CEO Survey – Key findings in the technology industry
are concerned aboutover-regulation
2012 Technology: 46%2013 Total Sample: 69%
58%
are concerned aboutprotectionisttendencies ofnational government
2012 Technology: 39%2013 Total Sample: 51%
45%
...and economic threats against growth
59%
87%
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are concerned aboutlack of stability in
capital markets
2012Technology: 58%2013 Total Sample: 61%
are concerned aboutvolatile economic
growth
2012 Technology: 83%2013 Total Sample: 81%
59%
11January 201316th Annual Global CEO Survey – Key findings in the technology industry
are concerned aboutexchange rate
volatility
2012Technology: 57%2013 Total Sample: 54%
52%
Business threats against growth
Disruptions caused by technological changes, new market entrants and shifting consumerspending and behaviour top the list of market threats to growth.
40
42
62
58
48
57
58
64
New market entrants
Speed of technological change
Increasing tax burden
Availability of key skills
Q: How concerned, if at all, are you about:
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37
35
35
52
34
39
49
40
28
31
38
39
40
46
47
0% 10% 20% 30% 40% 50% 60% 70%
Lack of trust
Inadequacy of basic infrastructure
Security of supply chain
Energy & raw materials costs
IP and customer data protection
Inability to finance growth
Shift in consumer spending and behaviours
Technology Total sampleBase: All respondents (Total sample, 1,330; Sector, 154)
Note: Respondents who stated ‘extremely’ or ‘somewhat’
Source: PwC 16th Annual Global CEO Survey 2013
concerned.
Source: PwC 16th Annual Global CEO Survey 2013
12January 201316th Annual Global CEO Survey – Key findings in the technology industry
So what are technology CEOs doing?
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Change of strategy
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of technology CEOs expect to changecompany strategy over the coming year,compared to the total sample at 68%.
14January 201316th Annual Global CEO Survey – Key findings in the technology industry
Customer growth and investing in R&D andinnovation remain top priorities
38
49
32
51
36
38
48
61
Enhancing customer service
Improving operational effectiveness
R&D and Innovation
Growing your customer base
Q: What are your top 3 investment priorities for 2013?
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9
19
26
27
33
38
3
11
25
30
31
0% 10% 20% 30% 40% 50% 60% 70%
Securing raw materials or components
Manufacturing capacity
Implementing new technology
Filling talent gaps
New M&A/joint ventures/strategic alliances
Enhancing customer service
Technology Total Sample
Base: All respondents (Total sample, 1,330; Sector, 154)
Source: PwC 16th Annual Global CEO Survey 2013
15January 201316th Annual Global CEO Survey – Key findings in the technology industry
Changes ahead for technologycompanies
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of technology CEOs anticipate changesin their customer growth, retention, andloyalty strategies.
16January 201316th Annual Global CEO Survey – Key findings in the technology industry
Increasing engagement and social mediaIn line with CEOs from other industries, 90% of technology CEOs are focused on strength-ening relationships with customers and clients by increasing engagement. In pursuit of newcustomers, 84% of technology CEOs are enhancing their focus on social media.
Q: To what extent are you strengthening your engagement program with the following stakeholders?
77
78
89
80
84
90
Employees (including trade unions & work council)
Users of social media
Customer and clients
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Base: All respondents (Total sample, 1,330; Sector, 154)
Note: This question was asked only to those who stated the above stakeholders have influence their strategy. Respondents who stated ‘some change’ or ‘major change’ areshown above
Source: PwC 16th Annual Global CEO Survey 2013
’ concerned.
Source: PwC 16th Annual Global CEO Survey 2013 17January 201316th Annual Global CEO Survey – Key findings in the technology industry
64
68
67
63
78
77
63
65
66
67
76
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
The media
Providers of capital
Government regulators
Industry competitors and peers
Supply chain partners
Technology Total Sample
Focusing on developing new products or services
New entrants are more of a concern fortechnology CEOs than the total sample.
“On a micro level, the biggest threat for us is always the next disruption around thecorner. Clearly we’re trying to disrupt our competitors, and they’re trying to disrupt us.So we are constantly assessing, preparing and trying to out innovate--but that’s thenature of our competitive and exciting industry.”
Stephen A. Elop of Nokia Corporation
40%Growth Opportunity: New products and
services
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technology CEOs than the total sample.Thus, they are focused on constantlyfinding ways to differentiate their productsby providing unique customer experiences.
New products or services are viewed as themain opportunity for growth by 37% oftechnology CEOs versus 25% of the broadersample of all CEOs.
18January 201316th Annual Global CEO Survey – Key findings in the technology industry
39% 37%28% 25%0%
10%
20%
30%
2012 2013
Technology Total Sample
Q: Which one of these potential opportunities for business growth do you see as the main opportunity to grow your business in the next 12 months?
Base: All respondents (Total sample, 1,330; Sector, 154)
Source: PwC 16th Annual Global CEO Survey 2013
concerned.
Source: PwC 16th Annual Global CEO Survey 2013
Targeting pockets of opportunity
We have one of the most geographically balanced business bases in thesector. In uncertain times like these, this balanced geographicaldiversification enables us to keep the company’s performance on aneven keel and take advantage of growth avenues, wherever they may be.
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even keel and take advantage of growth avenues, wherever they may be.
Jean-Pascal Tricoire, President and CEOSchneider Electric SA, France
Global operations expansionTechnology CEOs continue to view Latin America as the key region for expanding theiroperations, followed by South-East Asia and North America.
74
62
83
81
68
70
76
83
Africa
North America
South-East Asia
Latin America
Q: In 2013 do you expect your key operations in these regions to decline, stay the same or grow?
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33
58
57
77
70
80
74
37
38
46
63
63
64
68
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Western Europe
Australia
Central and Eastern Europe/Central Asia
East Asia
Middle East
South Asia
Africa
Technology Total Sample
Base: All respondents (Total sample, 1,330; Sector, 154)
Note: Respondents who stated ‘grow’’ co
Source: PwC 16th Annual Global CEO Survey 2013
ncerned.
Source: PwC 16th Annual Global CEO Survey 201320
January 201316th Annual Global CEO Survey – Key findings in the technology industry
China still in the lead when it comes to newrevenue opportunities
20
25
30
35
Q: Which countries, excluding the country in which you are based, do you consider most important foryour overall growth prospects in 2013?
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31 23 15 12 10 8 7 6 5 527 25 19 10 14 8 6 6 4 50
5
10
15
20
China US Brazil Germany India Russia Indonesia UK Canada Japan
Technology Total Sample
Base: All respondents (Total sample, 1,330; Sector, 154)
Source: PwC 16th Annual Global CEO Survey 2013
21January 201316th Annual Global CEO Survey – Key findings in the technology industry
What’s next
Deciding which processes and capabilities need to be global, regional and local isn’t just about takingadvantage of growth opportunities; it’s also about developing the flexibility to survive disruptions,wherever they may surface. That’s not an easy balance to strike. We’ve distilled five key questionsfrom the feedback CEOs have given us in this year’s CEO Survey:
• Organizations are increasingly aware that opportunities in growth markets are highly nuanced. Howdo you evaluate the opportunities offered in these diverse and diverging markets, both newer andmore established?
• How can you use digital channels to better communicate with your customers, co-create products,capture customer insights, increase loyalty and measure your impact in all of these areas?
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capture customer insights, increase loyalty and measure your impact in all of these areas?
• How can you innovate more effectively and efficiently – and focus more on the customer in yourinnovation strategy and processes?
• To take advantage of new opportunities before competitors do, how can you create the right degree offlexibility in your organizational structure and processes, which allows you to quickly deployresources across your organization to where they’re most needed?
• How can you create networks of formal and informal trusted relationships which go beyondcontractual terms to target a shared vision, set of values and objectives?
16th Annual Global CEO Survey – Key findings in the technology industry January 2013
For more information, please contact:
Rod Dring – Australia Werner Ballhaus – Germany Yury Pukha – Russia
T: 61 2 8266 7865E: [email protected]
T: 49 211 981 5848E: [email protected]
T: 7 495 223 5177E: [email protected]
Estela Vieira – Brazil Sanjay Dhawan– India Greg Unsworth – Singapore
T: 55 1 3674 3802E: [email protected]
T: 91 80 4079 7003E: [email protected]
T: 65 6236 3738E: [email protected]
Raman ChitkaraGlobal Technology LeaderT: 1 408 817 3746E: [email protected]
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Christopher Dulny– Canada Kenji Katsura– Japan Douglas Mahony – UAE
T: 1 416 869 2355E: [email protected]
T: 81 90 5428 7687E: [email protected]
T: 97 1 43043151E: [email protected]
JianBin Gao – China Hoonsoo Yoon – Korea Jass Sarai – UK
T: 86 21 2323 3362E: [email protected]
T: 82 2 709 0201E: [email protected]
T: 44 0 1895 52 2206E: [email protected]
Xavier Cauchois – France Ilja Linnemeijer– The Netherlands Tom Archer– US
T: 33 1 5657 10 33E: [email protected]
T: 31 88 792 4956E: [email protected]
T: 1 408 817 3836E: [email protected]
Acknowledgements
PwC gratefully acknowledges the contribution to the 16th Annual Global CEO Survey: Key findings in the technologyindustry provided by:
Stephen A. Elop, President and Chief Executive Officer
Nokia Corporation, Finland
Jean-Pascal Tricoire, President and Chief Executive Officer
Schneider Electric SA, France
This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the informationcontained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of theinformation contained in this publication, and, to the extent permitted by law, PwC does do not accept or assume any liability, responsibility or duty of care for any consequencesof you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.
© 2013 PwC. 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 seewww.pwc.com/structure for further details.
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Download the main report, access the results and explore the CEOinterviews from our 16th Annual Global CEO Survey online atwww.pwc.com/ceosurvey.