Rising optimism to drive spike in business investment, research shows
Over half of business leaders are optimistic about the outlook for their business this year, according to a recent survey.
Business leaders are starting the year with an increased level of optimism about their organisation’s future growth compared to 12 months ago, according to research undertaken by the Capgemini Research Institute.
The Embracing a Brighter Future: Investment Priorities for 2024 report found that 56 per cent of business leaders globally retain confidence in their organisation’s future growth despite current macroeconomic headwinds, up from 42 per cent 12 months ago.
This number was similar for Australian-based businesses, with 54 per cent of leaders feeling optimistic about the year ahead.
The research found that organisations are also likely to invest more this year, in contrast to the wait-and-watch approach adopted last year.
“Customer experience, innovation, talent and skills, sustainability, and supply chains will be key investment areas in 2024 – with a large majority (83 per cent) of business leaders planning to increase investments in technology and digital tools,” the report stated.
The research found that business leaders increasingly recognise AI’s value as an accelerator for driving innovation and revenue growth with almost 9 in 10 organisations planning to focus on AI, including generative AI, within the next 12 to 18 months.
The report said the role of AI is gradually elevating from supporting operational decisions to assisting in critical decision-making too.
“Amidst these technological advancements, most business leaders (56 per cent) acknowledge the indispensability of human judgment and creativity when utilizing AI models,” it said.
“With generative AI entering its initial phases of adoption, business leaders are focused on scaling it sustainably. They aim to do so while adhering to robust regulatory guidelines and establishing their own internal guardrails to ensure the ethical use of AI.
”Nearly three quarters of business leaders are planning to invest more in improving customers experiences during 2024, a significant increase from 20 per cent last year.
“As organisations seek to achieve and sustain a more meaningful and productive relationship with their customers, they are aiming to deliver it through more intuitive, seamless, and personalised digital offerings,” the report said.
Investment in research and development and product and service innovation is also expected to rise, according to Capgemini Research Institute.
“As organisations view engineering and R&D as a strategic capability, they are not only investing in improving products or services but also in reinventing and disrupting parts of their businesses,” the report said.
“Our previous research highlights that 83 per cent of organisations acknowledge that the shift from product-based to service-based business models is the key trend impacting their industries today.”
Talent and skills are another key area for investment with 57 per cent of leaders stating that they plan to invest in this area in 2024.
The scarcity of talent with the right skills is still ranked among the top business risks in the next 12 to 18 months for 59 per cent of organisations, in comparison to 35 per cent of organisations last year.
“Our multiple research projects have highlighted that a large majority of organisations believe that significant talent gaps exist in several critical technology areas, such as product development, software engineering, AI/machine learning, cloud, cybersecurity, data science, as well as in behavioural skills such as design thinking and business modelling,” the report said.
Sustainability investments are also expected to increase in over half of all organisations, compared to just 33 per cent last year.
“Our recent research on sustainability trends highlights that organisations understand the business case for environmental 71 per cent of organisations believe that generative AI can enable them to create more interactive and engaging experiences for their customers,” the report said.
“In 2022, only 21 per cent of executives agreed that the business case for sustainability was clear. In 2023, this percentage tripled to 63 per cent.”
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