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Optimism amid uncertainty
Findings from the first Deloitte Private global survey of private company leaders
As global uncertainty continues to grow, private businesses throughout the world are showing remarkable optimism about their future, investing in new technologies and talent to stay ahead of the competition.
Surveying almost 1,900 private company leaders, across 30 countries, including 110 from the UK, the inaugural Deloitte Private global survey: Global perspectives for private companies: Plans, priorities, and expectations indicates that the majority of respondents expect revenue, profits, productivity, and capital investments to increase in the year ahead.
Uncertainty over business prospects
Over half of those surveyed globally (53 percent) say that uncertainty over business prospects is higher than a year ago, while in the UK, this is a little higher than the global average at 60 percent. Geopolitical uncertainty is among the top causes for concern, with some differences in views of the top risks to growth across regions. In the Americas and the UK, the top concern is an uncertain economic outlook in their home countries, while respondents across the rest of Europe, Middle East and Africa point to hiring as a top challenge. Asia Pacific respondents identified raw material costs as a barrier to growth.
Greater emphasis on international markets
Seventy-nine percent of private companies globally are already relying on international markets for a portion of their revenue, and 43 percent counting on them for more than a quarter of their revenue. In the UK, 15 percent of respondents expect to generate more than 55 percent of revenue internationally this year, up from 10 percent in 2017.
Forty-five percent of private businesses globally expect their full-time headcounts to increase in the next year, with 47 percent of UK businesses expecting the same. Investing in existing employees through training and leadership development programmes are noted among the top talent investment priorities for UK and private business leaders globally.
Merge, acquire or grow organically?
As focused as global private companies have been on growing their business, in recent years, many have shown a strong preference for doing it organically instead of acquiring or merging with others. Less than a third (29 percent) of the private company leaders say their company completed a merger or acquisition in the past 12 months, compared to just 20 percent in the UK. But there may be a bounce-back ahead. Forty-two percent of respondents anticipate that they are likely or very likely to acquire targets in the next 12 months. Meanwhile, 26 percent say they expect to be acquired.
Optimistic about technological innovation
In general, private companies see digital disruption as a major factor in driving business results. Two-thirds of the private company leaders globally equate technology advances with creating new opportunities and positive outcomes. In the UK, this is even higher, with 77% believing technological advances will have a positive impact on their business, in particular Cloud Infrastructure, Social Business/Social Media, and the Internet of Things (IOT) (11%). Globally, Cyber Intelligence is seen to have the most significant impact on private businesses in the next year.