CEOs say AI will significantly impact business over the next three years: Gartner

CEOs have named AI as the top technology that will significantly impact their industry over the next three years, a new Gartner survey revealed.

Mark Raskino, distinguished VP analyst at Gartner said generative AI will profoundly impact business and operating models.

He said, “However, fear of missing out is a powerful driver of technology markets. AI is reaching the tipping point where CEOs who are not yet invested become concerned that they are missing something competitively important.”

Despite the impact of these economic headwinds, half of CEOs cited growth as the top strategic business priority for the next two years.

Reskino said after three years of volatility, CEO priorities are stabilising.

“Executive leaders are looking past the aftershocks of the omnicrisis period to a time when talent, sustainability and next-level digital change will be the levers of competitive performance,” he said.

Technology also remains a top focus area for CEOs, closely followed by workforce issues.

Kristin Moyer, distinguished VP analyst at Gartner said, “When determining business priorities, CEOs are hesitant, but not frozen.

“More than half of CEOs believe an economic downturn or recession in 2023 will be shallow and short, and the survey showed only a modest rise in cash flow, capital and fundraising concerns.”

In fact, mentions of environmental sustainability rose 25 percent over the previous year’s survey, which was the first time sustainability ranked among CEOs’ top 10 priorities.

Gartner predicts that by 2026, environmental sustainability will be a higher CEO strategic business priority than the technology-related category.

Inflation was ranked as the most damaging business risk by 22 percent of CEOs, and nearly a quarter cited greater price sensitivity as the biggest shift in customer expectations they anticipate this year.

However, increasing prices is still the top action that CEOs are taking in response to inflation (44 percent), followed by cost optimisation (36 percent) and productivity, efficiency and automation (21 percent).

Moyer said it is concerning that CEOs do not yet seem to be focused on productivity as much as they should be in an inflationary period.

She said, “This may be due to wishful thinking that inflation will not become a persistent feature of the economic landscape. CEOs must embrace automation to redesign methods, processes and products for efficiency, rather than pushing cost increases onto customers.”

When asked about the impact of various risks on the business, 26 percent of CEOs cited the talent shortage as the most damaging risk for their organisation. Attracting and retaining talent is, by far, CEOs’ top workforce priority.

Concerns about compensation are the biggest shift in employee and prospective employee behaviour that CEOs anticipate, followed by a desire for greater flexibility and remote or hybrid work.

“The emphasis on pay is not surprising in an inflationary environment, but in prior economic cycles, unemployment would typically be undermining labour market power,” Raskino ended.