Executives have their eyes on several key global and organizational risks
Despite their optimism, private companies are aware of the potential challenges that lie over the horizon. Although one in three cite a slowdown in economic activity as a key risk, private companies appear to be more concerned about geopolitical uncertainty, tariffs and supply chain disruption, with 46% seeing these as key risks in 2019 versus 22% in 2018. Because of their concern about these issues, 16% of private company executives cite an increase in production costs in the next year as their most significant challenge to their company’s growth plans, up from 12% a year ago.
Companies significantly increase their investment in technology to build resilience
One of the ways private companies are attempting to address these challenges and build resilience is by investing in technology. Almost all private company executives (96%) say their organizations will be making significant investments in technology in the coming year.
One in four now say they will use technology, artificial intelligence (AI) and automation in their talent strategies — four times higher than in 2018. Private company executives are taking advantage of technology to add flexibility to their talent agenda and maximize their use of the gig economy in addressing talent gaps.
Private companies will also use AI to increase personalization of product and service offerings, as well as improve customer services. Seventy percent say they will be developing their AI capabilities in-house, partly to address compatibility with legacy systems and partly as a means of gaining a competitive advantage.
Significantly, the percentage of private companies investing in technology for risk management, including cybersecurity, is also up, more than doubling from 7% in 2018 to 18% in 2019.
In the months ahead, private companies will drive growth strategies while building resilience
Over the next 12 months, we anticipate that private companies will make developing new products or services and expanding their business into domestic markets and adjacent sectors key priorities as they strive to meet their revenue growth targets.
At the same time, we expect ongoing investment in new and emerging technologies that will help private companies remain agile and responsive to key global and organizational risks.