Investors seem optimistic about the outlook for the global economy, with 51% of respondents to the PwC 2024 Global Investor Survey expecting growth next year. Cyber risks and geopolitical conflicts top the list of threats perceived by investors in this edition, compared to the previous survey where they referred mostly to inflation and macroeconomic volatility. Considering these risks, nearly nine out of ten of the participants say that a company's ability to weather a downturn is an important factor in investment decisions.
"While macroeconomic volatility is no longer a major challenge for investors globally, concerns about stability and predictability remain at the forefront in Romania. This is partly due to the deterioration of macroeconomic indicators, i.e. lower than expected economic growth this year and a widening current account and budget deficit, and partly due to the recent political turmoil, which led to the postponement of the presidential elections and uncertainty about the formation of a new government. Investors expect that the economic programme to be implemented by the next government starting in 2025 will rebalance the economy, revive growth and, implicitly, reduce investment risks," said Daniel Anghel, Country Managing Partner, PwC Romania.
Reinventing business models remains a top priority for investors
The majority of global investors believe it is crucial for companies to rethink their business models and increase their investment in risk mitigation strategies and solutions.
Approximately three in ten investors indicate that they perceive companies to be highly susceptible to technological disruption and that they face a constrained supply of workers with essential skills. Furthermore, nearly two-thirds of investors indicate that it is very or extremely important for companies to innovate in response to government regulations, changes in customer preferences, and supply chain instability. Half or more of respondents indicated that they view the actions of competitors, geopolitical developments, and changing demographics in a similar manner.
Artificial intelligence (AI) vs. employees
Investors believe there should be no trade-off between the use of AI and employees. A significant majority of respondents—nearly three-quarters—urge companies they invest in or have control of to focus on modernizing their workforce. Furthermore, a third of respondents anticipate that AI will lead to an increase in employee headcount of 5% or more, which is on par with the proportion of those who expect little or no change in headcount.
The majority of investors are optimistic about the benefits of generative AI, particularly in terms of scalability, return on investment (ROI) metrics, workforce impact, stakeholder perception, and capital expenditure. Furthermore, nearly three-quarters of respondents indicate that companies would need to moderately (42%) or significantly (31%) increase their investments to deploy AI at scale.
Investors are poised to ramp up their investments in companies that are taking proactive steps to combat climate change.
Nearly a third of investors anticipate that the companies they invest in will face significant exposure to climate change threats over the next 12 months. Furthermore, three-quarters of the survey respondents indicate that they will moderately or significantly increase their investments in companies that are taking a range of climate-related actions, particularly in creating sustainable supply chains (80%). When evaluating companies' plans to achieve a "net-zero transition", investors consider governance (72%) and associated capital or operating expenses (68%) to be of paramount importance. Additionally, 71% believe that companies should integrate ESG/sustainability directly into their corporate strategies.
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