In terms of other threats, a continuation or return of pandemic disruption, including new lockdowns and supply chain pressures, is seen as the greatest risk to growth by more than four in 10 (43%) CEOs. This risk is perceived to be higher in Asia-Pacific (48%) than in Europe (41%) or the Americas (43%). Given the zero-COVID-19 pandemic policy being followed by the Chinese government, this is unsurprising. However, with many global supply chains starting in China, this remains an international issue.
Another pandemic-related issue that continues to challenge growth plans is the scarcity and cost of attracting and retaining the right talent. This has become a more pressing issue during the pandemic, and over a quarter (29%) of CEOs cite this as an impediment to growth.
Geopolitical tensions also feature prominently in risk assessments — and have had a direct impact on accelerating input prices and inflation. The war in Ukraine has increased commodity prices and created yet more supply constraints as well as inflationary pressures.
CEOs need to recognize the interconnected nature of the myriad geopolitical crises they face in this highly uncertain environment. The specter of the COVID-19 pandemic also continues to stress supply chains, and the war in Ukraine has exacerbated pressures in energy and agricultural markets. Both are feeding into inflation, which is causing central banks to move faster and further in policy decisions. These factors are all combining to compel governments globally to take a more interventionist stance in strategic industries, further elevating geopolitical and supply chain complexity.
To navigate this web of geopolitical challenges, the vast majority (95%) of CEOs have adapted their cross-border strategic investment plans.