Tech optimism belies sluggish overall growth outlook
Despite a cautious optimism surrounding investments in technology, expectations for global economic growth remain muted. Only 28% of investors anticipate any moderate to significant improvement in global growth over the next year, reflecting the ongoing challenges within the macroeconomic landscape.
When focusing on specific regions, the United States emerges as the most appealing destination for investment, with 67% of investors favoring it over the next three years. Following the US are India at 45%, Chinese Mainland at 32%, the United Kingdom at 26%, and the United Arab Emirates at 26%. This ranking highlights a North American dominance in investment attractiveness, even as US investors themselves exhibit lower expectations for global growth compared to their international counterparts, indicating a cautious sentiment that varies by market.
Conservative growth expectations can be largely attributed to investors’ perceptions of the current threat landscape. A significant 55% of respondents report high or extreme exposure to cyber risks at the companies they invest in, with nearly as many (53%) acknowledging similar concerns regarding technological disruption. Other prevalent factors weighing on investor sentiment include inflation (44%), macroeconomic volatility (43%), and geopolitical conflict (42%).
In light of an unpredictable environment, investors are increasingly backing companies that enhance their resilience while capitalizing on technology-driven opportunities aimed at delivering transparent returns. A notable 88% of investors advocate for increased spending on cybersecurity, while 73% support investments in business model agility, 66% in regulatory compliance, and 64% in supply chain management to mitigate these threats.
Business model agility is particularly viewed as a critical pathway to both resilience and growth. Approximately 74% of respondents believe that companies pursuing opportunities across traditional sector boundaries will experience higher growth, whereas 65% perceive an elevated risk of disruption for firms that fail to adapt.
The emphasis on resilience and growth also extends to sustainability efforts, with 84% of investors asserting that companies should sustain or boost their investments in climate adaptation. Furthermore, 61% indicate they would at least moderately increase their own investments in firms utilizing sustainability data for enhanced efficiency and performance.
As investors seek more clarity on how management plans to foster growth amid uncertainty, key transparency requests include details on innovation strategies (47% of respondents), AI returns and cost savings (42%), AI investments (42%), competitive positioning (37%), and resilience strategies (29%).
Nadja Picard, Global Reporting Leader at PwC Germany, emphasized the significance of meeting these transparency demands in the current climate. The need for clarity around how companies will navigate evolving risks and opportunities may well define the investment landscape in the coming years.
As the technology sector continues to evolve, its potential to drive growth remains evident, albeit within a context marked by caution. Investors are keenly aware of the dual mandate of fostering innovation while ensuring resilience against a backdrop of increasing risks. This delicate balancing act will likely shape investment strategies as stakeholders strive to achieve sustainable growth in an unpredictable world.
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