Indicating that the worst of the global downturn is behind them, 82% of Asia Pacific CEOs are confident of growing revenues during the next 12 months, almost identical to the global average of 81%. This is a stark contrast to 2008 survey results, where only 66% of Asia Pacific CEOs felt this way. Underpinning this optimism is a belief that Asia will be the centre of economic growth in a new world order - issues critical to achieving this status include investing in talent development and combating climate change.
"The sense of optimism is especially keen in Asia, which will undoubtedly be a centre of growth in the new world order. In order to capitalise on this, Asia Pacific CEOs must remain focused on their long-term prospects despite the global changes and challenges that the downturn has brought," said PricewaterhouseCoopers' Global International Chairman Dennis Nally.
Asia: The Region of Choice
Globally, the majority of CEOs (82%) are expecting to grow their businesses in Asia in the next 12 months. Although Western Europe is currently the most popular region for an acquisition at 53% compared to 42% for Asia Pacific, this is expected to change very quickly over the next 12 months. Latin America is the next investment region of choice at 75%.
"The crisis has quickened the change in the economic landscape with emerging nations taking on more economic power than ever. Our prudent nature has left us in better shape than many other regions. Now, Asia's strategic advantage lies in its people and resources, and its ability to deal with crises" said Frank Lyn, China Markets Leader of PricewaterhouseCoopers.
Reflecting a sense of sustained recovery, there is an increasing expectation that bank lending will play an important part toward financing growth (45%), while internally generated cash flows remains the preferred method (78%).
People Critical to Long-Term Growth
Leadership and talent development is a key area (75%) in which Asia Pacific CEOs will focus their long-term investment decisions. However, the crisis has also caused CEOs to be more prudent about their spending with initiatives to realise cost efficiencies coming in highest (84%). Despite the focus on cost savings, almost 50% of CEOs expect to increase headcount over the next 12 months, while only 16% expect to reduce headcount.
"Talent remains a top priority for CEOs. The crisis taught us a few things - one of which is that organisations that are able to balance people retention and development against cost reduction measures will be well positioned for taking on the upswing. With Asia Pacific poised to be an economic powerhouse, having the right people in place is more urgent than ever," said Frank Lyn, China Markets Leader of PricewaterhouseCoopers.
As a result, Asia Pacific CEOs expect to significantly invest in their people's growth, and not through sheer compensation alone. Almost half (47%) will change their training and development programmes to prepare their people for the upswing. The crisis has also reminded CEOs of the importance of engaging their people - 43% will concentrate on staff morale and employee engagement programmes. Only 16% of CEOs expect to make any adjustments to remuneration levels.
Green is In
In spite of a challenging past year, almost half of Asia Pacific organisations recognise that responding to the environment is key - 47% of CEOs indicate that they have in place a strategy to respond to climate change. Only 12% of Asia Pacific CEOs lowered or delayed their investment in climate change strategy over the past 12 months.
However, despite the Copenhagen summit taking centre stage in mid-December last year, only 54% of Asia Pacific CEOs say they are preparing for the impacts of climate-change initiatives. This could be because while 64% agree that their stance on such issues will provide a reputational advantage, only 31% see a benefit to their business.
"Climate change is an issue that can ill afford a delayed response. It affects all of us, no matter where we are, and in the long-term, will affect a business' sustainability. Governments need to encourage business to make this a priority by providing the right infrastructure, tax breaks or financial incentives. As for Asia Pacific organisations, those that recognise that responding to climate change today will ensure their future tomorrow are already a step ahead of the game," says Frank Lyn, China Markets Leader of PricewaterhouseCoopers.