Korean CEOs with High Survival Anxiety Say "Regulations Hinder Innovation"

PwC, Survey of CEOs in 105 Countries
64% Say "Regulations Are Major Barrier to Innovation"
South Korea 75% "Won't Survive 10 Years Like This"

Korean chief executive officers (CEOs) feel more insecure about their companies' survival and have less confidence in future sales compared to CEOs from other countries.

[Provided by Samil PwC]

On the 16th, Samil PwC announced the findings in its report on the "27th Annual Global CEO Survey" (hereafter, Global CEO Survey). The report was based on the Global CEO Survey released by PwC Global alongside the World Economic Forum (WEF, Davos Forum) opening. The survey was conducted from October to November last year, targeting 4,702 CEOs from 105 countries. The theme of this year’s Global CEO Survey, released annually at the beginning of the year, is "Succeeding in an Era of Relentless Innovation."

According to the report, when asked, "If the company continues to operate under the current trend, how long do you think the profits will last?" 75% of Korean CEOs answered "less than 10 years." This is a significant gap compared to the global CEO average of 45%. When asked, "Are you confident about revenue growth over the next three years?" only 34% of Korean CEOs responded "confident," a sharp decline from 53% last year. Globally, 49% of CEOs answered "confident" to the same question.

Korean CEOs showed a more negative outlook on both domestic and international economies. 64% predicted a slowdown in the global economy this year, higher than the global CEO average of 45%. Additionally, 66% of Korean CEOs had a negative outlook on the domestic economy, contrasting with lower negative outlooks in China (19%) and India (3%). The report analyzed this as reflecting concerns about the fundamentals of the Korean economy, such as high external dependence and rapid aging.

CEOs’ outlooks on the global economy varied by country. Among global CEOs, 38% expected economic improvement, more than double the previous year’s 18%, but still, a higher proportion (45%) anticipated an economic slowdown.

[Provided by Samil PwC]

Regarding major obstacles that dampen the will to innovate, 64% of respondents cited the regulatory environment. This was followed by short-term performance-focused management (55%) and lack of technical skills among internal staff (52%). Notably, 74% of Korean CEOs, higher than the global average of 64%, identified the regulatory environment as a barrier to innovation. Next were lack of technical skills among internal staff (70%), lack of company technological capabilities (70%), and supply chain instability (66%).

However, excluding external factors such as regulations and supply chain instability, a significant portion of the obstacles hindering innovation were areas that companies could improve internally. The report stated, "Global CEOs view innovation not as grand and abstract changes but as transforming small daily work inefficiencies," and emphasized the need to reconsider the belief that more value can be created through cross-industry cooperation such as joint ventures and alliances.

Yoon Hoon-soo, CEO of Samil Accounting Corporation, said, "In an era where companies cannot foresee survival beyond 10 years without relentless innovation," he hopes that the report, which reflects the thoughts of CEOs worldwide, will help set the direction for change and lay the foundation for innovation."