2019 pwc taiwan ceo survey | key findings: caution prevails on … · 2019-03-19 · the survey,...

Key findings: Caution prevails on outlook

2019 PwC Taiwan CEO Survey

PwC

About the survey

2

This is the eighth year that PwC Taiwan has conducted its annual survey of Taiwan business leaders.

The 2019 PwC Taiwan CEO survey provides unique insight into the thinking of senior corporate executives in Taiwan on a

wide range of issues, and its findings attract wide attention among policy-makers, businesses, media and the general public.

The survey, which is based on PwC's annual global CEO survey, covers issues such as the prospects for growth, the

challenges in building a workforce, the threats facing companies today, and the impact of artificial intelligence (AI).

The report draws on the responses from 245 quantitative questionnaires and 12 in-depth interviews with business leaders.

- 30% of the survey responses were obtained by telephone, 24% online, and 46% face-to-face.

- 91% of the respondents are public companies.

- 40% of the survey respondents’ companies had annual revenues between US$100 million and US$1 billion.

- 48% of the respondents are from the Technology, Media & Telecom sector, 18% Consumer Markets, 13% Industrial

Manufacturing and Auto, 10% Health Industries, 8% Energy, Utilities and Resources, and 3% Financial Services.

The survey report was released on 20 March 2019. The full Chinese version is available at: www.pwc.tw/ceosurvey

Key findings

PwC

Taiwanese CEOs cite trade tensions as the

top threat to growth prospects.

4

Taiwanese CEOs say a significant

information gap remains, primarily due to

data siloing and lack of data sharing.

In the past decade, there has been a huge

discrepancy between the information CEOs

need and what receive, and there are few

signs of the gap closing. According to the 2019

PwC Taiwan CEO Survey, most respondents

value having data on customers’ preferences

and needs (96%), key business risks (92%)

and new technology trends (91%). However,

few CEOs consider the data they receive in

these areas to be adequate, with respective

satisfaction rates of 10%, 6% and 7%. This is

much lower than for global CEOs, with rates of

15%, 22% and 15%, respectively. The majority

(53%) of local CEOs attribute the information

gap to data siloing and lack of data sharing.

The majority of Taiwanese CEOs say the

government should be the main driving

force for the development of AI.

A public debate is currently taking place

about whether AI will do more good than

harm to society. This is reflected in the

2019 PwC Taiwan CEO Survey results,

with 70% of Taiwanese CEOs saying that

AI will displace more jobs than it creates in

the long run, which is much higher than the

49% of global CEOs with the same view. In

addition, some 89% of local CEOs say the

government should play a lead strategic

role in the development of AI, whereas only

62% of global CEOs agree.

Three main findings

The 2019 PwC Taiwan CEO Survey ranks

trade conflicts as the biggest threat (36%)

that Taiwanese CEOs feel extremely

concerned about, followed by geopolitical

uncertainty (29%) and policy uncertainty

(25%). This differs from the findings of PwC’s

2019 Global CEO Survey, which ranked over-

regulation (35%),policy uncertainty (35%)

and skills availability(34%) as the top three

perceived threats. Of those Taiwanese CEOs

extremely concerned about trade conflicts,

98% of them cite the US-China trade dispute

as particularly worrisome, as it could have

significant negative repercussions for export-

oriented Taiwanese manufacturers.

PwC 5

Source: 2019 PwC Taiwan CEO Survey、 PwC 22nd Annual Global CEO Survey

1) China responses do not include Hong Kong

Base: All respondents (2019 Global=1,378; Taiwan=245; China=144; Germany= 98; USA= 132; Japan=150; UK= 228. 2018: Global=1,293; Taiwan=228; China=162; Germany= 46; US= 105; Japan=123; UK= 193)

Global China¹ Germany USA Japan UK

Compared with other regions, Taiwanese CEOs are more worried about the global economic outlook for 2019

57%

42% 44%

27%

70% 73%

61%

38%

59%

36% 38%33% 36% 32%

36%

28%

47%

25%

23%

6%37%

34%

39%

33%

55%

37%

51%

32%

5%

29%

8%

47%

7%

21%

2%

29%

2%

31%

2%

27%

12%

34%

2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019

不知道

衰退

持平

成長

Taiwan

全球臺灣

Do you believe global economic growth will improve, stay the same, or decline over the next 12 months?

Don’t Know

Improve

Stay the same

Decline

PwC 6

47% of Taiwanese CEOs expect global economic growth to slow down in 2019, marking a sharp jump in negative sentiment

臺灣

5% 2% 1% 1%

35%

47%

42%

16%

40%

44%

27%

46%

45%

48%

43% 44%

47%

25%19%

8%10%

36%

15%

8%

47%

2013 2014 2015 2016 2017 2018 2019

不知道

改善

持平

衰退

Source: 2013-2019 PwC Taiwan CEO Survey

Base: All respondents (2019=245; 2018=228; 2017=123; 2016=112; 2015=102; 2014=116; 2013=105)

Improve

Stay the same

Decline

Don’t Know

Do you believe global economic growth will improve, stay the same, or decline over the next 12 months?

PwC

60%

33%

19%

28%

30%

19%

57%

31%

17%

33% 31%

22%

36%

39% 39%

35%

38%

42%

35%

46%46%

49% 49%51%

45%

36%

2013 2014 2015 2016 2017 2018 2019

臺灣/未來一年營收

臺灣/未來三年營收

全球/未來一年

全球/未來三年

7

Taiwanese CEOs are not as confident as their global peers regarding near to medium-term business growth prospects

臺灣全球臺灣

Source: 2019 PwC Taiwan CEO Survey、PwC 22nd Annual Global CEO Survey

Base: All respondents (Taiwan:2019=245; 2018=228; 2017=123; 2016=112; 2015=102; 2014=116; 2013=105。Global: 2019=1,378; 2018=1,293; 2017=1,379; 2016=1,409; 2015=1,322; 2014=1,344; 2013=1,330)

How confident are you about your organisation’s prospects for revenue growth over the next 12 months/next 3 years?

(showing only ‘very confident’)

Taiwan：next 12 months

Taiwan：next 3 years

Global：next 12 months

Global：next 3 years

PwC

15%

16%

18%

18%

18%

21%

21%

23%

26%

26%

氣候變遷與…

技術變革的…

稅負增加

供應鏈中斷

恐怖主義

勞動力結構…

地緣政治的…

法規過度監…

匯率不穩定

民粹主義

Taiwanese CEOs cite trade conflicts, geopolitical uncertainty and policy uncertainty as the top three threats to growth

Source: 2018、2019 PwC Taiwan CEO Survey

Base:2018=228:2019=245

臺灣

8

15%

16%

17%

18%

20%

22%

23%

25%

29%

36%

勞動力結構改變

民粹主義

法規過度監管

稅負增加

經濟成長的不確定性

保護主義

匯率不穩定

政策不確定性

地緣政治的不確定性

貿易衝突

2019 Taiwan CEOs top 10 threats 2019 Global

13%

28%

35%

25%

24%

30%

26%

35%

30%

31%

Terrorism

Climate change &

environmental damage

Policy uncertainty

Over-regulation

How concerned are you, if at all, about each of these potential economic, policy, social, environmental, and business threats to your

organisation's growth prospects (showing only ‘extremely concerned’)

Trade conflicts

Geopolitical uncertainty

Exchange rate volatility

Protectionism

Uncertain economic growth

Increasing tax burden

Populism

Changing workforce

Geopolitical uncertainty

Exchange rate volatility

Increasing tax burden

Over-regulation

Populism

Changing workforce

Supply chain disruption

Speed of technological change

2018 Taiwan CEOs top 10 threats

PwC 9


Base: (Global=426; China=52; US=53; Taiwan=245)

全球臺灣

How are trade conflicts affecting your operating model and growth strategy? (asked of those ‘extremely concerned’ about trade conflicts)

To cope with trade conflicts, 40% of Taiwanese CEOs plan to adjust their supply chains and sourcing strategies

45%

25%22%

16% 15%

33%

40%39%

16%

29%

6%

20%

62%

58%

40%

44%

33%

8%

62%

23% 23%

30%

13%

23%

We are adjusting oursupply chain and sourcing

strategy

We are shifting our growthstrategy to alternative

territories

We are delaying capitalexpenditure (CAPEX)

We are shifting ourproduction to alternative

territories

We are delaying foreigndirect investment (FDI)

No change to ouroperating model and

growth strategy

Global Taiwan China US

PwC 10


Base: All respondents (2019=1,378, Taiwan=245, China=144, US=132)

73% of Taiwanese CEOs plan to launch new products or services to drive revenue growth in the next 12 months

臺灣全球臺灣

Which of the following activities, if any, are you planning in the next 12 months in order to drive revenue growth?

77%

71%

62%

40%37% 37%

32%

14%

69%

58%

73%

42%

55%

25%

12%

2%

65%

47%

65%

60%57%

42%46%

24%

69%

90%

67%

40%38%

52%

27%

20%

Operationalefficiencies

Organic growth Launch a newproduct or service

New strategicalliance or joint

venture

Enter a new market New M&A Collaborate withentrepreneurs or

start-ups

Sell a business

Global Taiwan Chian US

PwC 11

How are trade conflicts affecting your operating model and growth strategy? (asked of those ‘extremely concerned’ about trade conflicts)

Source: 2019 PwC Taiwan CEO Survey

Base:245

73% 69% 58% 55% 42% 25% 12% 2%

57%

71%

86%

43%

71%

43% 43%

85%

69% 69%

58%

50%

31%

15%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Launch a newproduct or

service

Operationalefficiencies

Organic growth Enter a newmarket

New strategicalliance or joint

venture

New M&A Collaborate withentrepreneurs or

start-ups

Sell a business

Total(N-245) CM(N=43) EUR(N=19) FS(N=7) HI(N=26) IM&A(N31) TMT(N=118)

Financial services CEOs in Taiwan are more focused on organic growth and new strategic alliances or joint ventures

Note:CM: Consumer Markets， EUR: Energy, Utilities and Resources，FS: Financial Services，HI: Health Industries，IM&A: Industrial Manufacturing and Automotive ， TMT: Technology, Media & Telecommunications

PwC

China remains the most critical market for Taiwan, with Vietnam overtaking Germany in importance for the first time

78%82%

71%

67%

72%75%

47%

73% 60%

68%

59%

52%

14%

21%

14% 23%

25%

14%

36%

23% 29% 30%

21%

23%

11% 13% 13%9% 9%

18%

中國

美國

德國

日本

越南

China

2014

Source: 2014-2019 PwC Taiwan CEO Survey

Base: All respondents (Taiwan:2019=245; 2018=228; 2017=123; 2016=112; 2015=102; 2014=116)

12

Which three territories, excluding the territory in which you are based, do you consider most important for your organisation’s overall growth

prospects over the next 12 months?

US

Germany

Japan

Vietnam

2015 2016 2017 2018 2019

PwC 13


Base: 245

Which three territories, excluding the territory in which you are based, do you consider most important for your organisation’s overall growth

prospects over the next 12 months?

75% 52% 23% 18% 14% 9% 7% 6% 5% 4%

47%

71%

80%

64%

23%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

China US Japan Vietnam Germany India Thailand Indonesia Hong Kong South Korea

Total(N-245) CM(N=43) EUR(N=19) FS(N=7) HI(N=26) IM&A(N31) TMT(N=118)

Local Technology, Media & Telecom CEOs rank China, US, and Germany markets as more important than other sector CEOs


PwC 14

9%

9%

11%

54%

14%

2%

5%

15%

32%

44%

都市化

資源匱乏與氣候變化

人口結構變化

科技進展

全球經濟勢力變化

Taiwan Global

Looking backwards to the PAST five years, please rank the top three global trends from the following list, which you believe have transformed

your business the most. (showing only the most important)

Source: 2019 PwC Taiwan CEO Survey、PwC, 22nd Annual Global CEO Survey

Base: All respondents (Global=1,378, Taiwan=245)

臺灣全球臺灣

Shift in global economic power

Technological advances

Demographic shifts

Urbanisation

Resource scarcity and

climate change

The shift in global economic power and technological advances are the top global trends that have most impacted Taiwanese businesses

PwC 15

Taiwanese CEOs face a persistently large gap between the information they need and what they actually receive


Base:245

臺灣

Thinking about the data that you personally use to make decisions about the long-term success and durability of your business,

how important are the following? (showing only ‘critical/important’)

How adequate is the data that you receive? (showing only ‘comprehensive’)

96%92% 91% 89% 88% 87% 86% 84%

81%76%

39%36%

10%6% 7%

14%10% 9%

15%10%

5%

15%

21%

12%

94%

87% 86%

92%

70%66%

90%

69%

85% 86%

34%

42%

15%

22%

15%

41%

17%21%

24%22%

18%

29% 30%

16%

Data about yourcustomers' and

clients'preferences and

needs

Data about therisks to which the

business isexposed

Data about howthe latest

technology trendsbenefit or disrupt

the industry

Financialforecasts and

projections

Data about theeffectiveness of

your R&Dprocesses

Data about yoursupply chain

Data about yourbrand andreputation

Data about taximplications/risksarising from your

decisions

Benchmarkingdata on the

performance ofyour industry

peers

Data about youremployees' views

and needs

Data relating tohow efficiently you

utilise the realestate you occupy

Data about theimpact of climate

change on thebusiness

Taiwan(important/critical) Taiwan(comprehensive) Global(important/critical) Global(comprehensive)

PwC 16

The main reasons cited by Taiwanese CEOs for the information gap are data siloing and lack of sharing


Base: All respondents (Global=935, Taiwan=245)

What are the primary reasons that the data you receive is not adequate or that you do not receive the information? (asked of those that

answered either ‘not adequate’ and/or ‘do not receive this information’ to the question, ‘How adequate is the data that you receive?’)

8%

35%

50%

54%

15%

42%

40%

51%

13%

16%

39%

39%

44%

45%

51%

53%

Inability to adequately protect and secure thedata

Inadequate IT infrastructure

Poor data reliability (e.g. errors and incompletedata)

Lack of analytical talent

Inability to navigate customer informationprivacy rules (e.g. GDPR)

Unwillingness of customers and clients to shareinformation

Inability to quantify external information

Data siloing and lack of sharing

Taiwan Global

PwC

News agencies are the most trusted source of informationfor Taiwanese CEOs, and social media the least trusted

75%

70%

60%

43%

31%

24%

7%

7%

1%

16%

21%

33%

51%

63%

69%

2%

3%

5%

5%

5%

7%

To what degree do you trust the following sources of information?

News agencies (Bloomberg, Reuters, etc)

Governmental data and statistics

Interpersonal communications

(family members, friends, etc)

Traditional media

(newspapers, magazines, TV, etc)

Websites with

original content

Social media

Trust Strongly trustDistrustStrongly distrust

臺灣

17


Base:245

PwC

52% of Taiwanese CEOs agree it has become more difficult to hire workers, compared with 62% of global CEOs

18


Base Q11a: All respondents (Global=2019=1,378,Taiwan=245)

Base Q11b: Global=852 for more difficult; Taiwan=128 for more difficult

全球臺灣

38%

20%16%

10%6% 8%

50%

8% 9%

3%

8%

19%

Deficit in supply of skilledworkers

Candidate’s view of industry reputation has

changed

Compensationexpectations

Working conditions Growth rate of theindustry

Skills requirements in ourindustry have changed

Taiwan Global

Why has it become more difficult to hire workers?

52%

31%

42%

7%

6%

62%

More difficult

Taiwan

Global

In general, has it become more difficult or less difficult to hire workers in your industry, or is it unchanged?

Unchanged Less difficult

PwC 19

67% of Taiwanese CEOs believe that significant retraining or upskilling is the primary solution to counter the talent gap

全球臺灣

5%

18%

14%

17%

46%

2%

7%

7%

15%

67%

Changing composition of workforce between permanent andcontingent

Hiring from outside my industry

Hiring from competitors

Establishing a strong pipeline direct from education

Significant retraining/ upskilling

Taiwan GlobalSource: 2019 PwC Taiwan CEO Survey、PwC 22nd Annual Global CEO Survey

Base: All respondents (Global=935, Taiwan=245)

Which of these is the most important to close a potential skills gap in your organisation?

PwC

89% of Taiwanese CEOs are of the view that governments should play a critical and integral role in AI development

20


Base: All respondents (Global=1,378, Taiwan=245)

48%

79%

45%

84%

68%

62%

60%

82%

51%

81%

84%

89%

AI will eliminate human bias such as gender bias

AI is good for society

AI will become as smart as humans

AI-based decisions need to be explainable in order to be trusted

AI will have a larger impact on the world than the Internet revolution

Governments should play a critical and integral role in AI development

Taiwan Global

How strongly do you agree or disagree with the following statements about artificial intelligence(AI)? (showing only ‘Strongly agree/Agree’)

PwC

37%

28%

8%

32%

37%

43%

45%

49%

4%

1%

1%

4%

4%

4%

0%

7%

70% of Taiwanese CEOs believe AI will displace more jobs than it creates, higher than the global average of 49%

21


Base: All respondents (Global=1,378; Taiwan=245; China=144;Germany=98; India=55; Japan=150; UK=228; US=132)

Germany

India

UK

US

Japan

China

Global

Taiwan

37%

58%

51%

37%

36%

37%

31%

28%

12%

12%

37%

8%

6%

2%

5%

8%

全球臺灣

同意非常同意不同意Strongly disagree Disagree Agree Strongly agree

AI will not displace more jobs than it creates AI will displace more jobs than it creates

How strongly do you agree/disagree that AI will displace more jobs than it creates in the long run?

PwC 22

63% of Taiwanese CEOs believe that AI will significantly change the way they do business in the future

63%58%

53%

86%

69%58%

66%

34%40%

47%

14%

31% 35% 31%

整體消費民生產業(N=43) 能源與公共資源(N=19) 金融服務業(N=7) 健康產業(N=26) 製造業與自動化(N=31) 科技、媒體與電信業(N=118)

不同意

不知道

同意

Total

To what extent do you agree or disagree that Artificial Intelligence (AI) will significantly change

the way you do business in the next 5 years?


Base:245

CM(N=43)

Don’t Know

Disagree/Strongly disagree

Agree/Strongly agree

EUR(N=19) FS(N=7) HI(N=26) IM&A(N=31) TMT(N=118)


PwC 23


Base: Global IM&A=115, Taiwan IM&A=31 (IM&A: Industrial Manufacturing and Automotive)

71% of Taiwan’s CEOs in the industrial manufacturing and auto sector expect AVs to have an impact on their future business

What effect will self-driving cars and other autonomous vehicles (AVs) have on your business strategy over the next 5 years?

IM&A

4%

6%

24%

28%

39%

3%

26%

39%

16%

16%

Don't know

No effect

Minor effect

Moderate effect

Major effect

Taiwan Global

71% expect AVs

to have an impact

on their future

business

PwC

33% of Taiwanese CEOs have no plans to pursue AI initiatives at the moment, being more passive than their global peers

24

Source: 2019 PwC Taiwan CEO Survey、 PwC 22nd Annual Global CEO Survey

Base: All respondents (Global=1,378; Taiwan=245; China=144; US=132; Germany=98; Japan=150)

Please select the statement that best applies to your organisation:

23%

33%

8%17% 19%

23%

35%

32%

40%

36% 33%

37%

33%

29%

27%

42%39%

36%

6% 3%

19%

3%5%

3%3% 2% 6%2% 4% 1%

Global Taiwan China US Germany Japan

AI initiatives are fundamental to our organisation’s operations

AI initiatives are present on a wide-scale in ourorganisation

We have introduced AI initiatives in our business, butonly for limited uses

We have plans to start introducing AI initiatives in ourorganisation in the next three years

We have no plans to pursue any AI initiatives at themoment

pwc.com

Thank you

© 2019 PricewaterhouseCoopers Taiwan. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers Taiwan which is a member firm of

PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.

www.pwc.tw/ceosurvey

2019 pwc taiwan ceo survey | key findings: caution prevails on … · 2019-03-19 · the survey,...

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