CEOs are doubling down on talent and technology as confidence in the global economy declines, according to a KPMG survey of more than 1,300 of the world’s corporate leaders.

Pessimism aside, they are backing their businesses to prosper, with 92 per cent planning to add staff over the next three years, the highest proportion since 2020.

More than 70 per cent of CEOs concede increased pressure to ensure long-term prosperity for their businesses.

James Berry, KPMG in Bermuda country leader, said: “Over the last ten years, CEOs have sought to create confidence in a number of ways, notably increasing investment in innovation and tech, placing people at the heart of growth strategies, and renewing their commitment to ESG and sustainability as a source of value creation.

“Top threats to growth have shifted, with CEOs citing supply-chain challenges and operational issues ahead of cybersecurity and last year’s No 1 threat — geopolitics and political uncertainty.”

KPMG reported: “Behind economic uncertainty [53 per cent], the race to embrace artificial intelligence [50 per cent] is the issue most top of mind for CEOs today.

“It is clear that most leaders are reaffirming their commitment to increase investment in innovation and technology, including AI, as a driver of growth.

“Indeed, 64 per cent identified AI as their top investment priority in 2024 — though most are looking at it as an investment that will pay off in the medium term, with 63 per cent expecting to see a return on their investments within the next three to five years.”

Marco Vassallo, partner, Digital Solutions, KPMG Islands Group, said: “AI is poised to revolutionise island communities by addressing their unique challenges and unlocking new opportunities.

“AI-powered predictive analytics can help island businesses optimise their operations, such as supply-chain management and inventory control. Additionally, AI-driven personalisation can enhance customer experiences, leading to increased satisfaction and loyalty.

“By leveraging AI, island communities can improve their economic competitiveness, attract investment and create a more sustainable future. AI-driven training and upskilling programmes can equip the workforce with the necessary skills to thrive in the digital age, addressing skill shortages and future-proofing jobs.

“This is crucial for addressing the unique challenges faced by island-based operators with limited local markets and resources, enabling them to tap into global markets and compete effectively by increasing efficiency and productivity through automation and optimisation.

“To fully realise the benefits of AI, it is essential for island communities to conduct thorough AI readiness assessments. These assessments will evaluate the maturity of the organisation or sector with respect to AI, identify potential challenges, and develop a road map for successful AI adoption. By taking a proactive approach to AI readiness, island communities can ensure that they are well positioned to harness the power of AI and drive sustainable growth.”

Despite this, CEOs remain aware of the risks that the rapid push to implement new technology presents.

Well over half (61 per cent) of CEOs cited ethical challenges as some of the most difficult to address when implementing AI within their business, while a lack of regulation (50 per cent) and technical skills and capabilities (48 per cent) were other areas of concern.

Finally, while 76 per cent of CEOs believe that AI will not fundamentally affect the number of jobs in their organisation, only 38 per cent felt that their employees have the right skills to fully leverage the benefits of AI.

Less than 60 per cent agree that the integration of generative AI has made them rethink the skills required for entry-level roles.

The past decade has also seen CEOs renewing their commitment to ESG and sustainability as a source of value creation.

In 2015, CEOs ranked environmental risk as their least concerning priority risk; fast forward to 2024 and almost a quarter (24 per cent) acknowledged that failing to meet ESG expectations could give their competitors an edge.

Arnaud van Dijk, head of ESG, KPMG Islands Group, said: "In our islands, we have recently seen first-hand the encouraging shift of many CEOs prioritising sustainability, with most planning to formalise their ESG strategies within the next two years.

“At the same time, many corporates in our region indicate that they are grappling with meeting the sustainability reporting requirements. Reporting in a meaningful way to stakeholders is taking up significant resources.

“The exciting opportunity now is unlocking the full potential of ESG — turning these strategies into real value that drives both meaningful impact and long-term business success."