Global execs bullish on turning around geopolitical uncertainty
Global middle-market organizations, companies with annual revenues of $1million to $3 billion, are showing no signs of slowing down in the face of geopolitical uncertainty, according to EY.
Based on findings of the EY Growth Barometer, over one-third (34%) of middle market companies plan to grow 6%-10% this year, far outpacing the latest World Bank global GDP growth forecasts of 2.7%. The survey covered 2,340 middle-market executives across 30 countries.
Results show that, in spite of geopolitical tensions — including Brexit, increasing populism, the rise of automation and artificial intelligence (AI) and skilled talent shortages — 89% of executives see today’s uncertainty as grounds for growth opportunities. Moreover, 14% of all companies surveyed have current year growth ambitions of more than 16%.
“Despite geopolitical risks and uncertainties, businesses being disrupted through new technologies and globalization rewriting the rules of supply and demand, middle market leaders are not only attuned to uncertainty, but are seizing it to grow, disrupt other markets and drive their growth agendas,” said Annette Kimmitt, EY Global Growth Markets Leader.
Despite facing two years of Brexit negotiations, start-ups (companies under five years old) headquartered in the UK are the most positive on current year growth ambitions with 26% seeking to grow by 11-25% and a further 23% looking at year-on-year growth of more than 26%.
But when looking at the largest markets, there are significant differences between the world’s largest economy, the US where slightly more than a third (35%) of all companies plan modest growth increases of under 5%.
Combined results from China and India show that 42% of companies are targeting growth rates of 6%-10%. Moreover, a quarter (25%) of companies in tiger economies have current year growth plans of 11%-15%.
High-growth entrepreneurs are planning significantly higher growth rates than overall middle-market leaders, with one in five planning to grow by 6%-10%, a further 20% by 11%-15% and yet a further one in five by 16%-25%.
Nearly one in four (22%) high-growth entrepreneurs are planning current year growth of more than 26%. Additionally, almost two-thirds (61%) of this group plan increases in full-time staff and 9% plan increases in the use of contingent or gig economy workers.