Business Leaders’ Biggest Concern In 2020 Is Risk Of Recession
A new survey reveals that the world’s chief executives view the risk of a recession as their biggest external concern in 2020. Attracting and retaining talent ranks as their top internal concern. They also feel unsettled by trade uncertainty, political instability and more intense competition from disruptive technologies. However, they plan to counter such forces by developing more innovative cultures and new business models.
Conducted annually since 1999 by The Conference Board, this year’s survey gauged nearly 750 CEOs and nearly 800 other C-Suite executives from mainly four regions: Europe, Latin America, Asia and the United States. As part of the survey, participants weighed in on which external and internal issues warrant the most immediate attention in 2020.
Recession fears top the list:
- Global: For the second consecutive year, CEOs and other C-Suite executives globally rank a recession as their top external worry in the year ahead.
- U.S.: For U.S. CEOs, a recession rose from being their third biggest concern in 2019 to their top one in 2020. The issue surpassed cybersecurity, their top concern in 2019.
- Elsewhere: A recession also tops the list of concerns for Chinese and European CEOs and ranks as the runner-up for Latin American and Japanese CEOs.
Widespread concern over trade uncertainty:
- Global: CEOs globally rank uncertainty about global trade as their second-biggest external worry in 2020.
- U.S.: It ranks as the fourth-biggest worry of U.S. CEOs, tied with its affiliate issue: global political instability.
- China: Chinese CEOs rank trade uncertainty as their top worry, tied with their fear of a recession.
- Latin America and Europe: CEOs there rank it first and third, respectively.
Chinese CEOs are feeling the effects of economic sanctions:
- China: Chinese CEOs rank the effects of economic sanctions as their fifth-biggest external worry, tied with the issue of more demanding customers. Their concern about sanctions is the highest ranking by any country by a big margin.
- What it reveals about U.S.-China trade tensions: The role technology plays in this conflict is deep and enduring. Tariffs are likely to be temporary and easily subject to negotiation, but technology blockades, via economic sanctions, are not.
- Global: For CEOs globally, fiercer competition rose from being their fourth top external worry in 2019 to their third in 2020.
- U.S.: For two years in a row, U.S. CEOs cite the issue as their second top external worry.
- China: For Chinese CEOs, concerns about fiercer competition rose from being their seventh in 2019 to their third in 2020.
- Japan: The issue also rose in importance for Japanese CEOs, going from their fourth in 2019 to their third in 2020.
Cybersecurity budgets increase, but strategy remains elusive:
- Bigger budgets: More than 70 percent of responding CEOs globally plan to increase their cybersecurity budgets in 2020.
- But unclear strategy: Almost 40 percent of responding CEOs globally say their organizations lack a clear strategy to deal with the financial and reputational impact of a cyberattack or data breach.
Climate change heats up:
- Global: For 2020, CEOs globally ranked the impact of climate change on their business as ninth, up from 11th in 2019.
- Driving the momentum: CEOs in Latin America (fourth, up from 10th in 2019) and Europe (eight, up from 13th in 2019).
“The ongoing concerns about recession risk among business leaders reflect the slowing economy of the past year and the uncertainties about the outcome of the trade disputes and other policy concerns,” says Bart van Ark, chief economist at The Conference Board. “However, given a slightly better outlook for the global economy and an easing of trade tensions, we anticipate that a drumbeat of negative sentiment—which can become a self-fulling prophecy— can be avoided, and that we will see more confidence about business prospects in 2020.”