- Around the globe, CEO optimism over the rate of GDP growth has fallen dramatically.
- The tech sector, with its large platform monopolies and unregulated content and data practices, is worrying chief executives.
- The enormous productivity benefits of 4IR technologies will need to be guardrailed by private and public sector organisations to keep society safe.
This year, PwC’s 23rd Annual Global CEO Survey shows record levels of pessimism in the minds of CEOs. In just two years, the script — record optimism regarding worldwide economic growth prospects in 2018 — has flipped, more than half of the 1581 CEOs surveyed globally now believe the rate of global GDP growth will decline in 2020.
Indeed, the number of CEOs who believe global economic growth will ‘improve’ in 2020 dropped by a record share, from 42 percent to 22 percent. In comparison, our 2018 survey found that 57 percent of CEOs believed global GDP growth would improve in the coming year.
Uncertainty is to blame for the lack of confidence — both globally and closer to home. Only 27 percent of CEOs are ‘very confident’ in the prospects for their own company’s revenue growth this year, a worrying fact given CEO revenue confidence has proven a reliable indicator of the direction and level of GDP growth, according to our analysis.
One of four areas that CEOs are concerned about is technology, and the internet itself — that great global connector and democratiser of information — as society confronts the unintended and dangerous consequences of its promise.
With no effective global framework in place to govern practices or control attacks on digital technology, a majority of CEOs surveyed foresee increasing legislation around online content, data privacy and dominant tech platforms. As a result, it is likely that the internet will become more fractured.
The backlash against the internet’s dominant model of one global, all-encompassing and all-knowing platform is not an unexpected development — and may lead to a path forward that is at once more distributed and underpinned by certain common standards. If the global economy is to realise the full promise of the Fourth Industrial Revolution (4IR), a greater level of coordination on these issues will be necessary.
With this new era, comes new data-hungry technologies such as artificial intelligence, robotics and the Internet of Things. So far, the private sector’s implementation of these innovations is outpacing the regulatory systems and standards needed to mitigate their risks.
Organisations interested in global cybersecurity and internet governance are fragmented. No international framework exists that can control attacks on digital technology. And in many areas, digital dominance is increasingly seen as both an economic competitive advantage and a national security imperative.
The debate continues as to whether governments should adapt their existing frameworks to emerging standards, or draw new boundaries on data privacy, content moderation, and the size and reach of dominant platforms (such as Facebook, Google, Amazon, Apple). If those lines are drawn too tightly, they inhibit cross-border data flows, the effectiveness of cybersecurity and, simply put, innovation. The friction between these imperatives sows distrust and division, resulting in the increased fragmentation of societies.
A private or
When asked to consider the future (2022 and beyond) and select from a series of opposing statements regarding government intervention, nearly seven out of ten CEOs see the government increasingly introducing legislation in two areas: to regulate content on the internet (including social media) and to break up dominant tech companies. Interestingly, a majority foresee the government compelling the private sector to financially compensate individuals for the personal data they collect.
In North America and Western Europe, content on platforms such as Facebook, Twitter and YouTube has, with the exception of terrorist threats, largely been self-regulated. But the approach has fallen short. The European Commission is already drafting a new rulebook designed to overhaul how the EU oversees technology companies. It will be the first legislation of its kind to regulate hate speech, other illegal content and political advertising at scale.1
Similarly, data privacy has been headline news and high on regulators’ priority lists. Inspired by the EU’s General Data Protection Regulation (GDPR), now close to two years old, governments are formulating their own guidelines on the use and flow of personal data. For example, the California Consumer Privacy Act (CCPA). National and local governments are contemplating their own legislation.2
The end of the internet
as we know it?
Globally, CEO responses are divided on the subject of whether government legislation on issues such as privacy will exacerbate the splintering of the internet. Not surprisingly, North American CEOs are the most emphatic that it will. US companies pioneered the first global digital platforms and exercised disproportionate influence over its global, free and open culture in the early years. Consequently, they are the most directly and negatively affected by efforts to regulate the internet in large consumer markets.
In this divisive environment, designing regulations that both maintain business competitiveness and bolster consumer trust is a delicate balancing act. And it is one that, to date, has achieved mixed results, at least in the area of data privacy. A clear majority of CEOs in China, Brazil and India believe that governments are successfully striking that balance. But a majority in Germany, the UK, US, Canada and Italy do not share that opinion. The perceived lack of effectiveness in these countries, which have some of the most stringent protections, is worrisome, especially as other nations try to follow in their footsteps.
It is clear that many societies will no longer tolerate self-regulation. CEOs will increasingly need to collaborate with a diverse range of governments to shape appropriate solutions that deploy technology and leverage data in a safe way — one that protects consumers and respects their values while fostering innovation.
Beware the false glitter
of fool’s gold
As the 4IR rolls out and we trust AI to make more decisions with human consequences (eg. decisions involving hiring and admissions, medical treatment, access to financial assistance), this balancing act becomes all the more important.
The way forward will not be as unfettered as in the gold rush days of the internet. But it must be sufficiently enabling to unlock the enormous productivity and other benefits of these technologies.
Technology regulation wasn’t the only area that CEOs were uncertain about. Download the PwC 23rd CEO Survey to find out why upskilling, climate change and growth outlooks are turning executives pessimistic.