Indian CEOs Prioritise Investment In AI Amid Data Security Vigilance: EY Survey
Around 80% of the CEOs surveyed expressed optimism regarding their companies' revenue prospects, while 88% are confident about profitability, the survey showed.
Indian CEOs, faced with global economic uncertainty and geopolitical tensions, are doubling down on technology transformation, with a keen focus on artificial intelligence to drive productivity and business growth, according to the EY CEO Outlook Pulse Survey.
Around 80% of the CEOs surveyed expressed optimism regarding their companies' revenue prospects, while 88% are confident about profitability. This buoyant sentiment is mirrored in the mergers and acquisitions landscape, with 96% of respondents actively eyeing transactions in the coming year, predominantly through initial public offerings.
"In M&A landscape, a higher percentage of CEOs and investors are seeming to be bullish, actively seeking deals, driven by tech acquisition, market expansion, consumer shifts and supply chain security. However, the survey also indicated that some challenges persist in terms of the organisation’s strength in shareholder engagement and alternative deal structures,” said Amit Khandelwal, managing partner, strategy and transactions, EY India.
When asked what the top strategic drivers were for pursuing acquisitions, the survey found that acquiring technology, new production capabilities or innovative startups (44%), growing market share (36%), reacting to changing customer behaviour (32%) and securing supply chains (32%) stood out as the top four key ones.
CEOs Prioritising Tech Investment
The survey showed that 70% of Indian CEOs are channelling investments into technology, including AI, to catalyse growth and enhance productivity over the next 12 months, which is higher than their global counterparts at 47%. Yet, fortifying data management and cybersecurity (56%) and pursuing cost optimisation across business facets (50%) stood out as critical strategic imperatives in the near term. Technology acquisition, new production capabilities or innovative startups (44%) emerged as the leading strategic driver for M&A activities.
“Commitment to tech investments is not just a response to the present but a strategic leap towards future. The survey underscores this momentum, revealing that a substantial majority of CEOs are actively aligning their organisations with an AI-centric blueprint for innovation and productivity. CEOs must navigate this landscape with a dual focus: accelerating growth through high-value tech investments while simultaneously fortifying data with integrity and cybersecurity," said Mahesh Makhija, EY India technology consulting leader.
Sustainability Slips As CEOs Struggle To Showcase Financial Benefits
Despite a majority of CEOs (60%) acknowledging the growing importance of sustainability compared to a year ago, there's a trend of sustainability slipping down the priority list for almost 16% of CEOs, overshadowed by financial constraints and a shift in boardroom focus. This is more evident among global CEOs, where one in four (26%) responded that they are deprioritising sustainability.
While 44% strongly recognise the impact of sustainability issues on their supply chains, a comparable 40% acknowledged to ‘green hushing’—fearing being accused of ‘greenwashing.’ Furthermore, 42% admitted to challenges in presenting a compelling financial case for sustainability investments.
To bolster the sustainability agenda, corporate India advocates for technology incentives, including AI, as well as subsidies and tax breaks for green technology investments, coupled with governmental backing of sustainable infrastructure projects, the survey showed.
