Artificial intelligence (AI) is the top technology CEOs believe will impact their business, according to a recent survey from Gartner

The most recent survey of CEOs and senior executives, 2023 CEO Survey – The Pause and Pivot Year, carried out by American technological research and consulting firm Gartner – revealed the concerns of over 400 business leaders from North America, Europe, Asia/Pacific, Latin America, the Middle East and South Africa, across a number of industries and company sizes.

Conducted between July and December, 2022, the research demonstrates that technology remains a top strategic focus for senior executives with over one third of the respondents confirming this.

According to Gartner, automation rose noticeably as a key initiative as opposed to the 2022 survey, whereas digitalisation and digital transformation remain firmly on the surveyed executive’s radar.

Impact of AI

One tech area that particularly stands out among the survey results is artificial intelligence with 21% of the survey respondents pinpointing it as the technology that will have the most impact on their industry over the next three years.

“Generative AI will profoundly impact business and operating models,” said Mark Raskino, Distinguished VP Analyst at Gartner.

“However, fear of missing out is a powerful driver of technology markets. AI is reaching the tipping point where CEOs who are not yet invested become concerned that they are missing something competitively important.”

Optimism and growth

Apart from the importance of tech, a perhaps surprising survey finding is business leaders’ relative optimism.

Despite the impact of current economic headwinds, more than half of the executives surveyed feel the current situation will be short-lived.

In addition, half of the executives surveyed cited growth as the top strategic business priority for the next two years.

“When determining business priorities, CEOs are hesitant, but not frozen,” said Kristin Moyer, Distinguished VP Analyst at Gartner.

“More than half of CEOs believe an economic downturn or recession in 2023 will be shallow and short, and the survey showed only a modest rise in cash flow, capital and fundraising concerns.”

Impact of inflation

In spite of CEOs’ moderate confidence, inflation is still a major concern and was cited as the most damaging business risk by 22% of the respondents. In addition, almost 25% named increased price sensitivity as the biggest shift in customer expectations they expect to see this year.

In order to deal with inflation, among the top steps surveyed executives say they are taking are price increases (44%), followed by cost optimisation (36%) and productivity, efficiency and automation (21%).

“It’s concerning that CEOs do not yet seem to be focused on productivity as much as they should be in an inflationary period,” claimed Moyer.

“This may be due to wishful thinking that inflation will not become a persistent feature of the economic landscape. CEOs must embrace automation to redesign methods, processes and products for efficiency, rather than pushing cost increases onto customers.”

In light of the survey results, Raskino further encouraged companies to improve their productivity using technology and artificial intelligence in particular:

“Given budget constraints and the need to improve margins and profitability, we urge targeted productivity improvement programs aimed at high-impact roles/activities — in particular, using AI and robot automation. But don’t just automate old, redundant ways of doing things. Be prepared to reinvent methods, processes and even products,” he said.

Talent crunch

With respect to human resources priorities, for 26% of the CEOs surveyed, a lack of talent is the most damaging risk for their organisation, making attracting and retaining employees their number one workforce priority.

Moreover, business leaders expect compensation to be the biggest shift in employee and prospective employee behaviour, followed by employees’ desire for greater work flexibility with remote and hybrid options.

“The emphasis on pay is not surprising in an inflationary environment, but in prior economic cycles, unemployment would typically be undermining labor market power,” said Raskino.

For more IFA Global Market  news, click here.