U.S. CEOs embracing disruption caused by emerging technologies

Increased confidence, a surge in optimism and a keen interest in embracing the disruption being caused by emerging technologies — those are among the key findings from KPMG's in-depth 2017 U.S. CEO Outlook study.

According to the study, 54 percent of the 400 U.S. CEOs who participated said they are highly confident about U.S. economic growth over the next three years, up from 23 percent a year ago. One reason for this is that CEOs now see disruption and new technologies more as an opportunity than a threat.

In fact, 72 percent said that rather than waiting to be disrupted by competitors, their organizations are actively disrupting the sectors in which they operate to remain competitive and grow. This is a significant change from last year's study, when two-thirds of the CEOs expressed concern their organizations weren't doing enough to disrupt their industry sectors.

Disruption is a hot topic for our clients here in Minnesota and around the world. We're also focused on how emerging technologies might impact KPMG — both in the services we provide and the way we conduct our business. Following are other key findings from the study.

Technology disrupters — automation, advanced data and analytics, cloud-based tools, artificial intelligence (AI) and cognitive technologies — these are the largest drivers of change in business now and in the foreseeable future. As more of these cases become apparent to the marketplace, the reality of the impact and magnitude of the impact will start to set in.

It's becoming clearer to the CEOs the breadth of the impact that cognitive technology will have on the business model and the operating model that supports the business. The only way that you can enhance growth is to become more innovative. Ultimately, the hard part is determining how much investment is necessary to achieve that innovation-fueled growth.

It will be a balancing act between the short term and the long term. In other words, too much innovation can starve the company's core strategy today, and too little can erode competitive advantage in the long term.

While CEOs see technology as transforming their organizations, 57 percent are concerned that their organization does not have the sensory capabilities and processes to respond to rapid disruption. Furthermore, 61 percent are concerned about integrating cognitive processes and AI.

Last year, the CEOs we studied said that digital transformation is two or three years out. This year, they told us that it is not a linear progression; rather it is exponential. When you look at the results of the study, you see the speed with which companies are embracing digital technologies to transform their business.

One thing that CEOs make clear: Technology may be driving transformation, but succeeding in the cognitive era requires enlightened talent management and an understanding of where an organization can create value. It's not just technology; it's about people and values, and the ability to create an organization that can adapt to accelerating change.

The 2017 U.S. CEO Outlook study demonstrates a renewed optimism among U.S. CEOs, despite an environment of constant disruption. They realize that AI, machine learning and cognitive capabilities could bring a surge in productivity as well as help to create new products and new demands that would not be possible without these capabilities.

Above all, it is a time of disruption and growth for CEOs and the majority are embracing it.