Digital transformation will spur economic boom in 2021, CEOs tell Gartner


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Chief executives around the world expect a return to strong economic growth over the next two years and are betting on digital transformation, AI technology, and corporate activism to help make it happen.

Some 60% of CEOs polled for Gartners 2021 CEO Survey said they anticipate a return to economic growth this year and in 2022. That follows pandemic-ravaged global economic performance in 2020, the research firm said. Gartner on Tuesday released its annual survey, which over six months last year polled 465 CEOs and other senior business executives employed at companies of varying size, revenue, and industries located in North America, EMEA, and APAC.

CEOs top priorities for 2021 show confidence, said Mark Raskino, research vice president at Gartner. Over half report growth as their primary focus and see opportunity on the other side of the crisis, followed by technology change and corporate action.

This year, all leaders will be working hard to decode what the post-pandemic world looks like, and redeveloping mid- to long-range business strategy accordingly. In most cases, that will uncover a round of new structural changes to capability, location, products, and business models, Raskino said in a statement.

AI, quantum computing, 5G are strategic priorities

Respondents cited business growth, technology change, and corporate actions such as mergers and acquisitions as the top three priorities for their companies over the next two years. Technology is a particularly strategic concern for CEOs digital capabilities were the only area where a majority of respondents said they planned to increase investment in 2021.

Gartner found that more CEOs than ever are citing digital change and investment as a priority for their organizations. When they gave answers about top strategic business priorities in their own words, 20% of CEOs used the word digital, up from 17% in 2020 and 15% in 2019. The unprompted citation of digitization as a priority has been steadily increasing in Gartners survey over the past several years, growing from just 2% of citations in 2012.

Drilling down to specific technological areas where CEOs expect to invest, respondents cited AI as the most industry-impactful technology over the coming years, Gartner said. Some 30% of respondents said quantum computing would be highly relevant to their companies long-term plans, but a majority werent certain how that would look. Respondents also cited blockchain and 5G as technologies they were focused on.

While a majority of CEOs polled did not have designated data officers such as chief digital officers or chief data officers, 83% of respondents said they employed chief information officers. A majority of CEOs surveyed by Gartner said their top ask of their CIOs is digitalization.

The United States-China economic rivalry and trade relations between the countries was another area of concern for Gartner respondents. One-third of surveyed CEOs said that evolving trade disputes between the two nations over core technologies like AI and 5G were a significant concern for their businesses.

CEOs see M&A opportunities, remote work in store

Global CEOs also cited M&As and other corporate actions, social and environmental issues, and new workplace conditions resulting from the pandemic as primary areas of focus.

Interestingly, fewer respondents than in previous surveys cited sales revenue as a growth priority, while more mentioned new markets. Gartners Raskino suggested that this shift, plus the increased emphasis on M&A opportunities, shows that CEOs and senior executives seeking advantage from a cyclical downturn are going shopping for structural inorganic growth rather than counting on incremental sales growth using the strategies that have served them well in the past.

Techquisitions can bolster digital business progress, while also providing access to potential fast-growth market sectors, Raskino said.

Meanwhile, more than 80% of CEOs believe societal behavior change taking place during the pandemic to become more or less the new normal. Most expect hybrid work-from-home arrangements to become permanent for many workers, while expenditures on travel-related activities will remain lower than before the pandemic.

These developments, as well as nearly half of surveyed companies prioritization of sustainability to mitigate climate change, will further increase companies reliance on digital technology and digital channel flexibility in the coming years, said Kristin Moyer, Gartner research vice president.

This suggests that continuing to improve the way customers are served digitally will be vital, Moyer said.

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