A majority of CEOs in CEE now recognise the importance of innovation and reinvention, saying that their businesses will not be viable in 10 years’ time under their current business model.
While CEOs in Central and Eastern Europe recognise the importance of innovation and reinvention, this has yet to translate into major changes to business models, according to the latest regional findings of the PwC Annual Global CEO Survey.
On average, just five per cent of revenues in CEE companies have been generated from new business areas in the last five years, the survey finds.
The good news is that amidst the slow pace of change, a majority (52 per cent) of CEOs in the region recognise the importance of innovation and reinvention, saying that their businesses will not be viable in 10 years’ time under their current business model.
An encouraging 38 per cent also say their company has begun competing in new sectors in the last five years.
“Business leaders in Central and Eastern Europe are realising they need to change and adapt,” says Adam Krasoń, CEO, PwC CEE.
“Although they are generally optimistic about the near future, more than half of CEOs worry about whether their companies can survive under their current business models. By using AI responsibly and focusing on sustainability, I’m optimistic that CEE businesses can not only prepare for the future but actively shape it.”
The role of AI
CEOs in CEE see early gains from generative AI, as 49 per cent report their employees’ improved efficiency in time at work and 27 per cent have achieved increased profitability due to GenAI. However, there is a gap between AI expectations and implementation.
As many as 40 per cent expect GenAI to increase the profitability of their company in the year ahead—but only 13 per cent of CEOs in CEE are integrating AI into their core business strategies, trailing behind the global average of 24 per cent.
“Adaptation and innovation are not merely optional, but essential for survival and success,” says Agnieszka Gajewska, PwC Partner, CEE Clients and Markets Leader and Global Government and Public Services Leader.
AI is not leading to a reduction in jobs
Only two years since AI appeared on the agenda of most executives, around half of CEOs in CEE say it has helped to increase efficiency in how they and their employees spend their time.
More than 25 per cent say their company’s profitability has increased—and one-fifth report revenue growth impacted by GenAI.
However, GenAI adoption in CEE in the last year didn’t lead to a reduction in jobs as some expected. Last year, 18 per cent of CEOs in CEE expected headcount to decrease in connection with GenAI, but only eight per cent report that it happened.
Also, 13 per cent reported that GenAI influenced an increase in headcount.
Time to push more reinvention
As many as 72 per cent—more than the global average of 63 per cent—of CEE business leaders have taken at least one significant action on how their company creates, delivers and captures value.
More than 40 per cent have developed innovative products and services—and almost one-third are targeting new customer bases and routes to market. Such single actions are welcome, but cannot substitute for a systemic approach to reinvention.
“While some CEE companies are already implementing reinvention actions—the scope and pace are insufficient,” says Gajewska.
“Proactively capturing new opportunities, reallocating resources efficiently and refining decision-making processes are ways business leaders in our region can drive not only short-term success but also survival in the mid to long term.”
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