67% of Thai CEOs fear their business won't be viable in a decade amid climate change and GenAI pressures, PwC reveals

Friday 29 March 2024 09:02
Less than a third of Thai CEOs are confident in revenue growth
67% of Thai CEOs fear their business won't be viable in a decade amid climate change and GenAI pressures, PwC reveals

PwC Thailand has released its '27th Annual Global CEO Survey - Thailand' report, which reveals divided views among Thai CEOs on the global economy. The report shows that 45% of CEOs expect improvement while another 45% expect decline.

Additionally, only 27% of CEOs are confident in revenue growth for 2024. The survey also highlights growing concerns over business survival in the face of climate change and pressures from GenAI.

However, when asked about the country's economic outlook, more than half of Thai CEOs (52%) believe that the country's economy will improve compared to last year. Meanwhile, key threats to their business prospects in the next 12 months include inflation (30%), cyber risks (24%) and geopolitical conflicts (21%).

Two-thirds of Thai CEOs (67%) don't think their business will be economically viable in the next ten years if they continue on their current path.

Pisit Thangtanagul, CEO of PwC Thailand, commented on the '27th Annual Global CEO Survey - Thailand: Leading through accelerated reinvention' stating, "Despite Thai CEOs being confident in the growth of the local economy this year, they remain uncertain about their companies' growth prospects. This reflects the need for Thai CEOs to reinvent their business models, products and services and to discover new growth opportunities as they continuously face emerging threats and challenges."

"Technology disruption and climate change are two global megatrends that will exert increasing pressure on doing business for Thai CEOs. Our views align with the majority of Thai CEOs, who believe that without business reinvention for the future, there is a high possibility that many Thai businesses may not survive in the next ten years," he said.

The Thailand report is part of the 'PwC's 27th Annual Global CEO Survey', which surveyed 4,702 CEOs, including 33 from Thailand, from 2 October to 10 November 2023. The survey highlights the growing unease among business leaders and their perspectives on challenges. 

Pisit said that positive factors which are expected to support the Thai economy's expansion in 2024 should come from exports, which are likely to improve as global trade begins to recover. Meanwhile, the tourism sector has witnessed an increase in foreign arrivals due to travel promotions, such as visa exemptions for tourists in many countries. However, the delay in the 2024 budget disbursement and the slowdown in domestic demand, including high levels of household debt, are significant factors that need to be monitored.

Moreover, 73% of Thai CEOs reported that, from a moderate to a large extent, a lack of technological capabilities is a barrier to reinvention. This was followed by challenges related to the regulatory environment, competing operational priorities and a lack of skills in the company's workforce as reported by 57% of Thai CEOs. 

Climate change and GenAI progress

The survey indicates that in the past years, Thai CEOs have made progress in various areas to mitigate the effects of climate change, which is also true for global and Asia Pacific CEOs.

While 79% of Thai CEOs reported being in the process of improving or having completed actions on energy efficiency, there are still areas in which CEOs have no plans to take action. For instance, 36% state that they don't plan to invest in nature-based climate solutions and 36% don't plan to incorporate climate risks into financial planning.

Furthermore, more than half of Thai CEOs (58%) have also said that they haven't accepted lower returns on climate-friendly investments. This suggests that there's a gap in policymaking or measures to promote investments in climate technology, which would encourage the reduction of carbon emissions in the country.

Regarding the increasing popularity of GenAI in the business sector, the PwC survey revealed that 36% of Thai CEOs have adopted GenAI across their companies, while 24% have changed their company strategy due to GenAI. These findings align with the global averages of 32% and 31% as well as the Asia Pacific region at 33% and 28%, respectively.

Thai CEOs have a positive sentiment towards GenAI, with 52% agreeing that GenAI will improve the quality of products and services in the next 12 months. At the same time, 61% said that GenAI will significantly change the way their business creates, delivers and captures value in the next three years. Furthermore, 58% agreed that GenAI will require most of their workforce to develop new skills to effectively maximise the technology.

"It's time for Thai CEOs to lead business reinvention to address challenges and prioritise investments and transformation for the future. They will need to incorporate sustainability into work processes across their organisations and, most importantly, take advantage of technology along with effective risk management and implement a 'responsible AI' framework in their strategies," said Pisit. 

Source: PwC Thailand