Introduction from Evgenios C Evgeniou

This year’s CEO global survey by PwC marks its 20th anniversary. Over the past 20 years, PwC has through this study given business leaders across the world a platform to share their views, concerns and plans for the future.

This year’s survey examines fluctuations in CEOs’ confidence levels over the past 20 years, their evolving views concerning the threats they face as well as the trends which have influenced the past two decades.

But what do they predict will happen in the next 20 years? We asked the CEOs what they think about the prospects and dangers of globalisation and the role of technological developments, and recorded both their views and ways of managing these issues.

Within the framework of the global survey, we present the sixth consecutive local survey which examines the views of CEOs in Cyprus and depicts the picture they have as regards the prospects for the economy and the business environment, at the end of another crucial year for the Cyprus economy.

This year’s local survey saw the largest participation so far, with 89 CEOs of companies operating in Cyprus saying they are confident about their companies’ growth prospects and revealing their plans to drive corporate growth and profitability in the forthcoming year.

The most important development for the Cyprus economy last year was undoubtedly the successful completion of the economic adjustment programme which was accompanied by one of the highest rates of growth in Europe. This makes the economy more stable and strong compared to previous years, with positive prospects also anticipated for the business environment, as confirmed by the CEOs.

A valuable contribution to developing a comprehensive picture of the business environment in Cyprus was the in-depth interview with Bank of Cyprus Chief Executive Officer John Patrick Hourican who answered a wide range of questions for the purposes of the survey.

Six years after Cyprus’ first participation in the survey, we are convinced that it is both useful and necessary, since it gives the CEOs of Cyprus the unique opportunity to present their views and thereby contribute to the formulation of decisions which affect our economy.

We would like to thank all the CEOs who took part in the survey as well as Mr Hourican for their valuable time and contribution to its successful conclusion. I would like to make special reference to all the CEOs of Cyprus for making this survey a success. The ever-increasing number of participating CEOs from Cyprus has made it an annual platform for dialogue. I assure you that we are by your side and will continue to support you in any way we can, because together we can make a difference.

We hope the survey’s results will give food for thought and generate constructive discussion with a view to the continuous improvement of our country’s economic and business environment. I hope you enjoy the report!

Explore the Survey

Interview Transcript

I think technology has been the big change in business, and it has taken centre stage over the last 20 years. That will continue into the next 20 years. Processing power increases as the use of the data that the technology has allowed us access to changes, and that will give rise to significant changes in how businesses are run. I think that's the challenge for governments, the challenge for business, and indeed the challenge for society, as we have a ubiquity of information and ubiquitous access to how information can be analysed. So I think this is going to be the big continuing challenge for business.

There are many stresses and challenges in the global economy, as we look into the next 12 months. Global growth has been gently slowing during the course of the last few years, and while individual countries within that are doing better or worse depending on where they are in the world, I think there are significant challenges to growth, as we saw with the bond market selloffs recently. We see equity markets being quite volatile. I think that there are confidence issues across the world. So I think it will be a challenging 12 months.

Our business is very local, and is in two markets in the European Union. We don't really grow very much across borders. So, our challenges are very idiosyncratic to the economies we find ourselves in. Our economy, Cyprus, is recovering well, and we expect to recover with it.

We’ve retrenched from what I would describe as a lot of ‘managerial tourism’ over the past decade, and we have focused on where we can add actual value to our customers by focusing on national boundaries, which will be contrary to much of what the Davos Summit is going to be discussing. But actually I think businesses need to focus on their customers, and they need to serve their customers where those customers are. The nature of my business is that my customers exist inside a geographic boundary, rather than necessarily across geographic boundaries. So we'll be focusing very much on Cyprus, its business, and very much on our small but growing UK business, where we see significant opportunities.

Unquestionably. There are more threats to the business model, although our business went through a very serious disruption three years ago because it was effectively recapitalised. But the business sector in which it exists is challenged by FinTech. It's challenged by the disaggregation of data. It's challenged by people horizontally disaggregating our business, and we have to react to that. We have an old sort of historic technology that suffers, and uncompetitive positioning against modern disruptive technologies, and we have to get ahead of that.

We are looking at the core of what we do and how we operate. We are re-examining the basis on which we gather and organise our data. We are reorganising the complexity versus simplicity of how we organise our business. We are examining what the customer needs and wants. And we are trying to educate our customers into working with us in a way that both makes them feel like they're getting good service, but also makes us feel like we can actually afford to service them and actually provide a return to our shareholders. The paradigm of business is changing. You know, big, expensive bureaucratic businesses will die, whereas nimble, capable, disaggregative businesses will survive.

In terms of technology, when I started work with Price Waterhouse in 1990, we did not have computers on our desks, and we shared a terminal in the corner of the office. Over the last 20 years we have gone through a revolution in how technology has impacted our lives. There is a CPU in almost everything we touch now. Our cars are full of computers. Our offices are full of computers. We are connected, even while we are flying, to the data that surrounds us. Technology has absolutely changed the way people interact. There is no private time. There is no privacy. There is no space, and this is something that we in the business community have to acknowledge and adopt. And we have to figure out what that means for our customers who in the end of the day pay our bills as we look into the future.

Yes, organisations will change dramatically. The arrival of artificial intelligence, the arrival of robotics, the arrival of big data, the arrival of the interrogation techniques that are now capable of being deployed on data, all give sort of a new challenge but also a new tool to businesses across the world. We have to embrace them. We have to recognise that they're here to stay and it will only get worse. So, we have to redesign the new paradigm, and figure out how we change the existing paradigm into the new paradigm by being smart. That's probably about simplicity. I have a view that simplicity becomes complex because people start to misunderstand it, whereas complexity is just lots of layers of simple things. So, let's go back to being simple. Let's go back to serving our customers, and let's reinvent our business models to make sure that happens quickly. The time-to- market today in the business world is much shorter than it was when I started work, and I think people who lead businesses need to recognise that the manner in which we deploy our products has to change in line with customer expectations, which have become of immediate service and immediate change. They are much more impatient than the consumers of 10, 20 years ago.

Well, banks have historically been very automated in a business context, and very digital. We've gone to the back of the queue in terms of our technology versus other industries, and I think we have to get back to the front of the queue. That involves not just providing a sexy front-end for our consumers, but also then reinventing the back-end of the bank. So, our industry today is full of a lot of what I would call inefficient organised processes that can be made simpler through good data organisation and good process reinvention. That will have consequences for staff numbers across the industry. It will have consequences for the way the business is organised across the industry. It will have consequences for how the customer interfaces with the industry, and that's highly likely to give rise to much more significant automation and digitisation as we go forward. So, I think we're going to see, sadly, across our industry, a significant reduction in the number of people employed and a significant increase in the powered technology part of the business.

The world has seen too many instances where people's data has been able to be accessed by criminals, and we have an obligation to protect our customers' data and an obligation to ensure we stay ahead of those that would wish to abuse that data. A bank has a person's financial life on its systems, and we have to ensure that the firewalls and the protections around that data are strong. Now, we have not had any instances where we have had any significant loss of customer data, but there are examples in our industry where we have had that. So we, in the leadership of the banking industry, have to continue to upgrade and spend money and time on getting ahead of and protecting the data that we are the stewards of. It is wholly unacceptable for us to have reasonable data protocols. We have to have excellent data protocols, and we have to have huge investment in cyber-security. We have to keep looking at new technologies. Blockchain is a new technology. It's not yet particularly scalable, but it suggests that it could be. We have to examine it, understand it, and invest in making sure that we stay ahead or stay with the pack in terms of the use of that technology. So, I think this is going to be a rapid journey. And we will constantly be looking at the next technology and trying to figure out how we deploy it, both to the benefit of our customer, to excite them, and to the benefit of our shareholders, to reward them for an ever-increasingly complex and difficult-to- make-a- return business environment.

I think there are challenges for global organisations, but equally I think there are opportunities for global organisations. Globalisation has been the theme of the last two decades. We have seen companies ignore the boundaries that exist naturally in countries, but we have also seen a number of crises occur that have had to be coped with by national governments, not international enterprises, and that means there is a real challenge and friction between a national agenda and the globalisation agenda. I think businesses have to respond to that. I think we have to recognise that our customers, in certain parts of what they do, would ignore the boundaries of the countries they live in, and in other aspects of what they do they're very conscious and completely conscious of the national boundaries in which they operate. They want the protections their government can offer them in the regulated space and they want that nationally, whereas when they come to the consumption of simple goods they are agnostic as to where those goods come from, and they would naturally embrace a more globalised agenda.

I think it would be a foolish CEO who does not consider the context in which their business operates. I think we should observe and be clear that the world has fragmented over the course of the last, particularly 10 but certainly 20 years, where we've had more extreme political views causing the dislocation in the natural order in parliament. We have seen the change in energy resources across the world give rise to a changing stage of geopolitics and sort of geostrategic influence. These things matter to business, and we have to understand that that is the context in which we plan our businesses over the next decade. I think the world is more fragile politically, more fragile economically, and therefore more fragile from a safety perspective than it has been for some time. This gives us a huge obligation to understand it and a huge obligation to engage with it, to try and make it simpler and less fractious.

Business leaders need to be completely conscious of the context in which they operate. They need to engage with governments. We need to engage with policymakers. We need to engage with think tanks and opinion formers, and we need to form our own views and have them heard. We need more bravery from people with opinions to express them, and we need that bravery to be repeated, not occasional. So, I'm a real proponent of ‘if you think it, say it,’ provided you've thought about it properly, and indeed contribute to the debate. It’s not reasonable to sit quietly in a corner, knowing that something is not quite right or needs attention, and not to raise your voice. If the business leadership across the world is to recover its position as an important opinion former, we need to actually engage.

There is a real movement of dissatisfaction across the world. We have seen various votes for various people or various actions across the world, Brexit and others, which have in my mind been more about a vote for change and a vote of dissatisfaction than necessarily a vote on the issue. That should cause politicians, policymakers and businesspeople to wake up a little and to recognise that the societies in which we operate and the societies which give us the right to operate have a level of dissatisfaction that is rising. We saw it with the Arab Spring. We saw it with lots of things across the whole of our agenda and that means we have to be careful, be careful to address the real issues in the societies we serve, and be careful to address the real long-term issues such as pension holes, such as the avoidance and evasion of tax across the world, such as the sort of trade and whether it is fairly organised. You know, protectionism, tariffs, all these things need to be in our consciousness, and all these things need to be addressed conscious of the societal reaction that at the moment is breaking away from mainstream.

There are enormous and increasing tensions between business and society as businesses seek to change their business models with greater use of technology, which naturally means less use of people. We also have a desire from people post-crisis to want to get back to a level of consumption and a level of earnings that is commensurate with their own ambitions for themselves. Now, those are not naturally easy to combine. People don't want to pay for service, yet they want great service. The cost of great service is expensive. The increase in globalisation, the increasing use of ubiquity and the reduction in brand loyalty across the world, all of these things contradict each other in terms of their objectives. So, businesses have to recognise that the loyalty of the consumer is becoming much less than it would have been in the past, particularly in the services industry rather than in consumable goods. That gives us a challenge. People don't want to pay too much for something but they want high-quality service, and we are challenged by the fact that our business models are likely to employ less people. So, we'll become the bête noire of a discussion with society because we're not contributing to that society's wellbeing by giving people security of tenure of their jobs. All these challenges are ahead of us and they're going to get worse, so we need to engage in a really serious dialogue about what a modern economy is going to look like.

I think we face a very dislocated next 20 years. I think we'll see a reversal of some of the globalisation that has occurred. I think we'll see the emergence of nationalism, economic nationalism, in a much more fundamental way than we've seen over the last 20. But at the same time, we'll see the creation of business models that are much more ubiquitous in the use of their data and their information, much more technologically core- driven. But actually, that's going to change the nature of the type of jobs that are available in society, which I think will in the beginning increase the tension between business and society, policymakers and business people. So I think we have some dangerous waters ahead – which is why we need to be honest about them, and to engage in the dialogue so that we can all navigate them.


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Looking to
the future

Q: Do you believe global economic growth will improve, stay the same, or decline over the next 12 months?


Q: How confident are you about your company's prospects for revenue growth over the next 12 months?


Q: How confident are you about your company's prospects for revenue growth over the next 3 years?


Q: Which of the following activities, if any, are you planning in the coming 12 months in order to drive corporate growth or profitability?


Q: How concerned are you about the following economic, policy, social and environmental threats to your organisation's growth prospects?


Q: Do you expect headcount at your company to increase, decrease or stay the same over the next 12 months?


Q: To what extent has globalisation helped with the following areas?


Q: To what extent has technology changed competition in your industry over the past 20 years/5 years?

Q: To what extent do you think technology will chang competition in your industry over the next 5 years?