In November and December 2022, the Capgemini Research Institute surveyed 2,000 respondents from distinct organisations with more than $1 billion in annual revenue from across 15 countries in order to conduct this study. The respondents’ investment strategies for the upcoming 12 to 18 months were examined.
Global company leaders are concentrating their investments on the areas that will continue to drive their business transformation, according to Capgemini CEO Aiman Ezzat. They ought to take advantage of the chance that technology presents to expand their business’s potential for long-term growth as well as to make it more effective, sustainable, and resilient. Investing in the people necessary to implement these business models and value chain shifts is also crucial.
Investing in the skills necessary to implement these business model and value chain reforms while maintaining a positive employee experience is also crucial. For enterprises to not only survive the uncertain environment but also emerge stronger and more resilient in the future, several areas of investment are crucial.
The main risk for corporate growth in the upcoming 18 months, according to 89% of firms, is disruption in the supply chain, ahead of rising raw material prices (67%) and the energy crisis (64%). To reduce this, 43% of executives expect to invest more in their supply chain over the next year and beyond, on average 10.4% more than they did last year.These CEOs intend to focus investments on supply chain technologies that enable supply chains’ agility, transparency, and visibility (of supplier bases, production, and transportation partners).
Regionalizing supplier bases, broadening the manufacturing base, and on-shoring or near-shoring to increase production bases closer to demand will be priority steps to accomplish supply chain diversification (i.e., reducing reliance on a single geographic region). While APAC nations intend to invest more in supply chain technologies, Western European nations intend to invest more in supply chain diversification.
Businesses are thinking about how technology may help drive growth and swiftly produce economic value in order to help weather the economic storm. According to the study, 39% of them intend to raise their technology investment over the next 12 to 18 months, and a comparable percentage intends to keep it the same. Executives intend to use technology, including the cloud, data, and analytics, to assist lower costs and hasten decision-making. Nearly half of executives also intend to raise their spending on cybersecurity in the upcoming year in order to further secure their companies.
According to the report, even though environmental sustainability represents a small portion of their overall investment, over half of organisations have already reduced their spending on it in the last 12 to 18 months as a result of unfavourable market conditions, and only 33% plan to increase it in the following 12 to 18 months.
Less than one-third of firms claim to be on pace to achieve their specified sustainability goals in this situation. However, during the next 18 months, firms in the US and China intend to boost their investments (41% and 53% of organisations, respectively), reversing some of the apparent fall over the previous 12 months.
The fact that the majority of corporate leaders view environmental sustainability as an expensive obligation rather than a long-term investment may be a contributing factor in the growing pressure on sustainability investments. In addition, the survey claims that 74% of CEOs believe that consumer demand for eco-friendly goods and services has decreased because many consumers are unwilling to pay more for such items in the current macroeconomic climate.
As an investment in the future, businesses should give sustainability investments top priority and quicken the transition to a less energy- and resource-intensive economy. According to empirical data, sustainability and a strong bottom line are far from mutually exclusive, and leaders in the field outperform their competitors.
