After years of uncertainty coupled with a scaling back of investment, optimism is returning to global markets. Notably, such renewed confidence about growth comes at a time when businesses are being transformed by digital technology.
These were among the main findings of Accenture and the Economist Intelligence Unit's (EIU) new report, CEO Briefing 2014 - The Global Agenda: Competing in a Digital World, which also has found that businesses which are able to properly focus their digital business investments will be the ones to make the most of such growth.
The EIU surveyed 1,041 C-suite executives across 20 countries and 12 industries, including Singapore, during the last quarter of 2013. It sought their views on prospects for the global economy and they had bold ambitions for growth, the survey found.
Almost three-quarters of executives surveyed expect their company's profits to go up over the next 12 months, while 65 per cent plan to increase their workforce. Some 76 per cent are "somewhat optimistic" or "strongly optimistic" about their own organisation, and 44 per cent feel that way about the global economy.
In Singapore, half the respondents said they were optimistic about the global economy in 2014; 75 per cent were optimistic about their own organisation's growth; and 56 per cent expressed optimism about the domestic economy.
The survey also found that business leaders around the world understand the significant impact that digital technologies will have on transforming their industry and the way they do business, but there is a potential disconnect with their actual investments in digital business initiatives.
The primary focus for investment in digital business by the majority of companies was to improve internal costs and drive productivity gains. They may instead need to place more emphasis on digital business investments related to their growth strategy of developing new products and services for new customers, the report noted.
Singapore executives seem to be ahead of the curve in this respect - 66 per cent of respondents here said they intended to drive growth in their domestic markets in the next three years by focusing on selling new products and services. That proportion greatly exceeds the 34 per cent who say they will prioritise selling existing products.
Reflecting this emphasis on new product development is a heightened focus on research and development (R&D), with more than three-quarters (77 per cent) of executives here indicating that their organisations plan to increase their R&D expenditure in 2014 to support innovation efforts.
In line with this is the Singapore executive's focus on investing in human capital. A majority (73 per cent) said their organisations will increase human capital investment in 2014, much greater than those increasing investment in physical and tangible assets. Some 58 per cent of firms here also expect to grow their workforces this year.
Cost challenges are, however, tempering these growth ambitions in Singapore. In contrast to their regional peers, who are mostly concerned with recession in key markets and competition from new market entrants, Singapore executives cited raw material costs and the high cost of capital as the biggest risks facing their companies over the next 12 months. They also rank less expensive labour costs as the most important factor for increasing Singapore's competitiveness.
Said Jonathan Wright, managing director of Accenture Strategy, Asean: "There is a demand for a bigger, bolder Singapore ambition if organisations are to continue to thrive here. Our research shows a focus on the domestic market, but companies are also beginning to re-think the role that Singapore plays in their Asean and APAC (Asia-Pacific) portfolios.
"As Asian markets develop, we are seeing business models and the role of regional headquarters evolving to provide high-value services across the region by leveraging the competitive advantages - stability, highly skilled workforce, developed infrastructure - that the country has to offer."