CEOs and government officials call for faster international dialogue to manage economies
31/3/2009 14:21
Prestigious PricewaterhouseCoopers study sets out the need for governments to act as the runway for future growth.
As the economic crisis bites, CEOs support government intervention, but are seeking more effective leadership, improved business-to-government collaboration and smarter regulation to improve the future prospects of the global economy, according to the latest PricewaterhouseCoopers (PwC) report.
Business confidence has fallen off a cliff, prompting governments around the world to intervene on an unprecedented scale in a bid to mitigate the financial crisis. Battered by recession, CEOs are extremely gloomy about the short term prospects, and predict only a slow, gradual economic recovery over the next three years. As a result, business leaders are calling on governments to provide leadership by creating institutions, policies and mechanisms for collaboration that are appropriate for today’s global flows of capital, knowledge, labour, goods, services and information.
Says Jan Sturesson, Global Government Leader for PricewaterhouseCoopers: “Governments around the world must act as the runway for future growth, navigating their economies through current troubled waters while charting the way ahead. Stronger mechanisms are required for mitigating global systemic risks, including the reform of institutions such as the EU, IMF and World Bank and a greater role for the G20 as a real-time decision-making forum.”
Drawing on the results of the prestigious CEO Survey, and adding to it with valuable insights from key government officials, PwC’s Public Sector Research Centre has published a report entitled Government and the global CEO: Redefining success.
Key report findings include:
• A remarkable 10% of companies surveyed had some form of government backing, with state ownership spread across all industry groups.
• 57% of government-backed CEOs see high quality customer service as critical compared to 67% of CEOs with no government backing
• Wider stakeholders such as government (63% of government-backed CEOs compared to 47% for other CEOs) and local communities (37% compared to 27%) exert a strong influence.
• Even in such dire times, over-regulation is still a top three issue for CEOs: this year 55% of CEOs remain concerned or extremely concerned about over-regulation as an obstacle to growth.
Says Jan Sturesson: “Government is no longer a bystander but an active participant in business. Citizens, as taxpayers, have become the new owners and guarantors (through loans) of large swathes of business, from financial services to automotive. As government-backed companies appear to be less focused on customers and more so on government stakeholders, there are risks from long-term government backing. While focus on these new stakeholders is understandable, it could potentially damage innovation and quality of service. Governments need to make early decisions on exit strategies for businesses they have backed through the current crisis but which ultimately must stand alone. There is also a need for stronger, better and smarter regulation including clear and stable tax rules”
The report goes on to outline three implications for government emerging from the current crisis:
• National governments will have to balance much more explicitly the viewpoints of their local and national communities with those of the international community. Multilateral institutions such as the UN and WTO must act increasingly as real global bodies rather than collections of national interests.
• The increasingly interconnected state of the world means that we are moving increasingly from a competing society to a collaborating society, with businesses and nations competing within an increasingly global set of governance arrangements.
• Governments face making decisions more rapidly and in a more complex environment. As a result, they need agile management mechanisms to cope with the speed and complexity of decision-making in a modern global economy.
Concludes Jan Sturesson: “The survey findings clearly reveal increased support for the development of much faster mechanisms for international dialogue on managing economies than current institutions allow. Government must also take the responsibility of facilitating collaboration on a new strategic playground for growth and development between different sectors. Collaboration – within companies, among companies and between the public and private sectors – is essential. The challenges we are collectively facing are simply too great to be overcome in any other way. The task is to create the society of the future for the citizen and stakeholders of tomorrow through a facilitating and enabling government”
As the economic crisis bites, CEOs support government intervention, but are seeking more effective leadership, improved business-to-government collaboration and smarter regulation to improve the future prospects of the global economy, according to the latest PricewaterhouseCoopers (PwC) report.
Business confidence has fallen off a cliff, prompting governments around the world to intervene on an unprecedented scale in a bid to mitigate the financial crisis. Battered by recession, CEOs are extremely gloomy about the short term prospects, and predict only a slow, gradual economic recovery over the next three years. As a result, business leaders are calling on governments to provide leadership by creating institutions, policies and mechanisms for collaboration that are appropriate for today’s global flows of capital, knowledge, labour, goods, services and information.
Says Jan Sturesson, Global Government Leader for PricewaterhouseCoopers: “Governments around the world must act as the runway for future growth, navigating their economies through current troubled waters while charting the way ahead. Stronger mechanisms are required for mitigating global systemic risks, including the reform of institutions such as the EU, IMF and World Bank and a greater role for the G20 as a real-time decision-making forum.”
Drawing on the results of the prestigious CEO Survey, and adding to it with valuable insights from key government officials, PwC’s Public Sector Research Centre has published a report entitled Government and the global CEO: Redefining success.
Key report findings include:
• A remarkable 10% of companies surveyed had some form of government backing, with state ownership spread across all industry groups.
• 57% of government-backed CEOs see high quality customer service as critical compared to 67% of CEOs with no government backing
• Wider stakeholders such as government (63% of government-backed CEOs compared to 47% for other CEOs) and local communities (37% compared to 27%) exert a strong influence.
• Even in such dire times, over-regulation is still a top three issue for CEOs: this year 55% of CEOs remain concerned or extremely concerned about over-regulation as an obstacle to growth.
Says Jan Sturesson: “Government is no longer a bystander but an active participant in business. Citizens, as taxpayers, have become the new owners and guarantors (through loans) of large swathes of business, from financial services to automotive. As government-backed companies appear to be less focused on customers and more so on government stakeholders, there are risks from long-term government backing. While focus on these new stakeholders is understandable, it could potentially damage innovation and quality of service. Governments need to make early decisions on exit strategies for businesses they have backed through the current crisis but which ultimately must stand alone. There is also a need for stronger, better and smarter regulation including clear and stable tax rules”
The report goes on to outline three implications for government emerging from the current crisis:
• National governments will have to balance much more explicitly the viewpoints of their local and national communities with those of the international community. Multilateral institutions such as the UN and WTO must act increasingly as real global bodies rather than collections of national interests.
• The increasingly interconnected state of the world means that we are moving increasingly from a competing society to a collaborating society, with businesses and nations competing within an increasingly global set of governance arrangements.
• Governments face making decisions more rapidly and in a more complex environment. As a result, they need agile management mechanisms to cope with the speed and complexity of decision-making in a modern global economy.
Concludes Jan Sturesson: “The survey findings clearly reveal increased support for the development of much faster mechanisms for international dialogue on managing economies than current institutions allow. Government must also take the responsibility of facilitating collaboration on a new strategic playground for growth and development between different sectors. Collaboration – within companies, among companies and between the public and private sectors – is essential. The challenges we are collectively facing are simply too great to be overcome in any other way. The task is to create the society of the future for the citizen and stakeholders of tomorrow through a facilitating and enabling government”
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