As existential threats converge, Irish CEOs expect technological change (97%), changes in customer preferences (94%) and government regulation (93%) in particular to drive changes to how their companies create, deliver and capture value in the next three years. 63% also expect GenAI to significantly change how their companies create, deliver and capture value in the same period—slightly lower than the global average of 70%—with efficiencies in employees’ time at work cited as a core benefit by 69% of Irish CEOs.

Successful reinvention requires astute and bold resource reallocation, however. Whether that’s investing in tech-led transformation, addressing cost and capability issues, or improving your supply chain and broader operating model, you need to continually test your resource allocation strategy—both financial and human. Encouragingly, 53% of Irish companies reallocate more than 10% of their company’s resources every year—albeit 14% lower than the global figure of 67%. Indeed, resource allocation can occur at all levels. For example, last year’s CEO Survey found that day-to-day, project-level decisions are a surprisingly significant performance driver.

As always, there are barriers to reinvention too. Perceived constraints include the regulatory environment (88%), competing operational priorities (88%) and a lack of skills (75%)—and this is consistent with the views of global CEOs. To ensure that their companies are ready for the future, whatever it might hold, CEOs need to focus not only on their business model, but also on the operating and technology models that enable it. They must also look beyond their company’s walls to embrace strategic business ecosystems. This can be a beneficial endeavour, with such companies 1.7 times more likely to be faster to market than their peers, 1.2 times more likely to be flexible and agile, and 2.3 times more likely to be highly innovative.

Such innovation is a core strength in the Irish economy, with 63% of Irish CEOs reporting that 0-20% of their company’s total sales were attributable to new products or services introduced in the last three years—notably higher than the global average of 54%. And with the business acquisition rate expected to double to 41% in the next three years, many Irish CEOs are ready to invest for the future.

CEOs are making complex trade-offs as they strive to boost the sustainability of their businesses, with lower hurdle rates for climate-friendly investments increasingly accepted. In the last 12 months, 40% of Irish CEOs accepted lower rates of return for climate-friendly investments, lower by one percentage point or more in 96% of cases and very much in line with the global trend. With issues like net zero and ESG/sustainability reporting—and the Corporate Sustainability Reporting Directive (CSRD), in particular—coming into view, forward-looking companies are also taking proactive steps to improve energy efficiency (93%) and sell products, services or technologies that support customers’ climate resilience efforts (83%). In doing so, they are creating nature-positive business models that mitigate risks, strengthen financial returns and benefit society.

This year’s CEO Survey also shows that regulatory complexity inhibits the decarbonisation of business models for 71% of Irish CEOs and 76% of global CEOs. This influencing factor is followed by lower returns for climate-friendly investments and a lack of climate-friendly technologies in respondents’ sectors. Despite hurdles to climate action, many CEOs see climate change as an industry disruptor with both opportunities and risks—a hopeful indicator of future progress. Indeed, this action-oriented view is supported by PwC’s Global Investor Survey in which two-thirds of investors said companies should make investments that address ESG issues even if they reduce short-term profitability.

As businesses prepare for a period of concerted climate action, CEOs should partner with their CFOs to transition to sustainable sources of energy and develop a climate strategy that works both for their company and society at large. CFOs are natural and trusted partners for CEOs with the capacity to influence resource allocation, long-term capital spending and M&A activity in the context of creating more sustainable business models. They also have a host of data-driven forecasting, budgeting, resource allocation, and risk management tools, which can bring sustainability into the heart of strategy.

While Irish CEOs might be drawn to the opportunities associated with business reinvention, many remain concerned about their companies’ long-term economic viability. 28% expect their companies to go out of business in ten years or less if they continue on their current path—up from 21% a year earlier but notably lower than the global rate of 45%. Given these threats are universal, the relative optimism of Irish CEOs may be exaggerated. CEOs should be on high alert for any misplaced optimism in the years ahead as threats evolve.

Many are tuned in to their perceived exposure to various threats in the next 12 months. Inflation tops the list (Ireland: 95%, Global: 93%), followed by macroeconomic volatility (Ireland: 94%, Global: 90%) and cyber risks (Ireland: 90%, Global: 88%). Climate change is now in fifth place but remains a dominant threat for almost three-quarters of CEOs (Ireland: 73%, Global: 72%).

In addition to these challenges, Generative Artificial Intelligence (GenAI) is the break-out development of the past year. 60% of Irish CEOs expect it to significantly increase competitive intensity in their respective industries in the years ahead, compared to the global average of 68%. It is also expected to increase certain risks, from cybersecurity risk (76%) and spread of misinformation (62%) to legal liabilities and reputational risks (55%) and bias towards specific groups of customers or employees (37%)—each of which trended slightly higher than the global average, suggesting a more cautious perspective among Irish CEOs.

Industry-wide regulations such as the EU AI Act and the EU Cyber Resilience Act, along with more targeted regulations such as the Digital Operational Resilience Act (DORA), the expanded Network and Information Security Directive (NIS2) and the Individual Accountability Framework, are firmly on the C-suite agenda. CEOs must take a proactive approach to the regulatory landscape and risk management developments to ensure resilience, compliance and sustained outcomes in an increasingly complex digital environment.