With CEOs worrying more about political stability and protectionism around the world, Bermuda needs to keep obstacles to international business to a minimum to remain competitive.

That is the view of Arthur Wightman, PwC Bermuda leader in response to PwC’s Global CEO Survey, which showed a record rise in pessimism on growth prospects.

Nearly 30 per cent of business leaders believe that global economic growth will decline in the next 12 months, about six times the proportion in last year’s survey.

Meanwhile, 85 per cent of CEOs agree that artificial intelligence will dramatically change their business over the next five years. Nearly two-thirds see AI as something that will have a larger impact than the internet.

Mr Wightman said: “PwC’s annual survey found a sharp rise in those chief executives indicating that global growth would ‘decline’. The threats they consider most pressing are related to the ease of doing business in the markets where they operate, for example, overregulation, barriers to entry or cost.

“In Bermuda, our hallmarks of risk-based and pragmatic regulation and speed to market clearly count in our favour in a highly competitive, global marketplace. That said, we have to continue to work hard to attract and retain both people and companies.

“CEOs have turned their focus to navigating the surge in populism in the markets where they operate. Trade conflicts, policy uncertainty, and protectionism have replaced terrorism, climate change, and increasing tax burden in the top ten list of threats to growth.

“And so, we must be careful to minimise impediments for international companies to do business in Bermuda. Similarly, with economic substance tests we must move fast to take advantage of the undoubted opportunity that has been created.”

The survey of 1,300 business leaders was the 22nd Global CEO Survey conducted by PwC and was launched at the World Economic Forum in Davos, Switzerland this week.

“CEOs’ views of the global economy mirror the major economic outlooks, which are adjusting their forecasts downward in 2019,” Bob Moritz, global chairman of PwC, said. “With the rise of trade tension and protectionism it stands to reason that confidence is waning.”

PwC’s survey found despite the dip in confidence, 42 per cent of CEOs still see an improved economic outlook, though this is down significantly from a high of 57 per cent in 2018.

Overall, CEOs’ views on global economic growth are more polarised this year but trending downward. The most pronounced shift was among CEOs in North America, where optimism dropped from 63 per cent in 2018 to 37 per cent.

Mr Wightman also commented on the island’s needs for its workforce of the future.

“Technological changes continue to disrupt the business world, and people with strong data and digital skills are in even higher demand and increasingly harder to find,” Mr Wightman said.

“That said, the need for people with soft skills is also critical, which is why business, government and educational institutions need to work together to address the demands of the evolving workforce.

“The widening gap between rich and poor around the world is also evidenced in Bermuda. The long-term sustainability of the island depends on our ability to narrow this gap and create pathways for everyone to participate in the economic opportunities as they present themselves.

“Another trend we are seeing is that leading organisations are also responsible businesses. In other words, they believe that doing something good for the world is also good for business. This may indeed be one of the clear opportunities to help shift socio-economic disparities on our island.”

The unease about global economic growth is lowering CEOs’ confidence about their own companies’ outlook in the short term. Thirty-five per cent of CEOs said they are “very confident” in their own organisation’s growth prospects over the next 12 months, down from 42 per cent last year.

To drive revenue this year, CEOs plan to rely primarily on operational efficiencies at 77 per cent and organic growth at 71 per cent.

The US retains its lead as the top market for growth over the next 12 months. However, many CEOs are also turning to other markets, reflected in the dramatic drop in the share of votes in favour of the US, from 46 per cent in 2018 to just 27 per cent in 2019. China narrowed the gap, but also saw its popularity fall from 33 per cent in 2018 to 24 per cent in 2019.

The other three countries rounding out the top five for growth include Germany at 13 per cent, down from 20 per cent; India at 8 per cent down from 9 per cent and the UK at 8 per cent down from 15 per cent.

Despite the bullish view on AI, 23 per cent of CEOs currently have “no current plans” to pursue AI, with a further 35 per cent “planning to do so” in the next three years. Thirty-three per cent have taken “a very limited approach”. Fewer than one in ten CEOs have implemented AI on a wide scale.

When it comes to the impact AI will have on jobs, 88 per cent of China’s CEOs believe AI will displace more jobs than it creates. CEOs in Western Europe and North America are less doubtful, with 38 per cent and 41 per cent believing AI will displace more jobs than it creates.