Canadian CEOs remain optimistic about domestic growth opportunities and their own businesses despite challenges tied to the Covid-19 pandemic, geopolitical trade tensions and disruptive technologies, says a new report from Toronto-based KPMG LLP.
Forty percent of surveyed CEOs in Canada remained as optimistic about their businesses after the recent fallout from the pandemic as they did at the start of the year, compared with 12% who felt less confident than they did in January, according to the firm’s Global CEO Outlook.
This is marked difference from global CEOs, 26% of whom said they remained just as confident about their business growth opportunities today as they did in January. Further, a larger sample of that group (29%) felt less confident than they did prior to the onset of the pandemic.
“The actions taken in Canada to flatten the Covid-19 curve and keep cases fairly subdued means that CEOs here feel more assured than their global peers that our national economy will not collapse,” said Stephanie Terrill, business unit leader, management consulting, KPMG in Canada, in a release.
KPMG’s annual outlook was conducted in two parts: an initial survey in January 2020, followed by a “pulse check” in July and August.
The optimism of Canadian CEOs revealed in these surveys is based on a medium-term view. Specifically, 48% of that cohort felt much more or moderately more confident about the country’s three-year growth prospects, compared with 45% globally.
That domestic confidence extended to the industries in which the CEOs operated, with 56% of Canadians CEOs saying they felt confident. Meanwhile, a strong 84% felt confident about the prospects of their companies, as opposed to 67% of global CEOs who felt the same.
But CEOs are not completely rosy-eyed about their growth prospects: among their top concerns are emerging technologies, talent risk, cyber attacks, territorialism and climate risks, according to the survey.
One way to counteract those threats is to embrace technology, respondents indicated, with 76% of Canadian CEOs saying that investing in disruptive technologies such as artificial intelligence and automation is crucial to sustainable long-term growth, said the report.
Indeed, the pandemic has highlighted just how important technology is to the growth prospects of a company. For instance, 84% of surveyed Canadian CEOs said they plan to prioritize technology investments to help them meet growth and transformation objectives, said KPMG, while 92% said Covid-19 has accelerated the digitization of operations.
“Covid-19 is accelerating digital strategies, with many leaders having to drastically rethink operations, ramp up technology, redefine supply chains, and innovate to make sure they can keep employees safe and working, and deliver goods and services to their customers,” said Terrill. “But Canadian companies may not be moving fast enough.”
The KPMG survey found that only 16% of domestic CEOs felt they’ve made years of progress in digitizing their operations in the last few months, as opposed to the 30% of global CEOs who said they had made such progress.
As well, only 4% of homegrown CEOs said they’ve accomplished years of progress in the last few months in the development of new business models and revenues streams, compared with 17% of global CEOs who made such a claim.
KMPG initially surveyed 75 Canadian CEOs and 1,300 CEOs globally in January and February of this year for the report. The company then followed-up with 315 CEOs globally, including Canadians, between July 6 and Aug. 5.
Nearly 40% of Canadian CEOs who responded in the initial survey reported annual revenues of between $1 billion and $9.99 billion, while 51% reported revenues of between $500 million and $900 million. In the follow-up survey, 16% reported annual revenues of between $500 million and $999 million, 40% reported between $1 billion and $9.99 billion, and 44% reported $10 billion or more.
The top three Canadian industries represented in the survey were energy, banking, and consumer and retail. Other industries represented included insurance, asset management, infrastructure, automotive, telecommunications, life sciences, and manufacturing and technology.