|
KPMG report highlights that in the life sciences sector, CEOs are confident about their own company’s growth prospects despite lessening confidence in the industry, economic uncertainty, and challenges faced with AI adoption and meeting net zero targets.
According to the KPMG 2024 Life Sciences CEO Outlook which is now into its tenth year globally, reveals 79 per cent of sector leaders are expressing confidence in their own company’s growth prospects, as confidence continues to grow from the previous year up 10 percentage points. One fifth accounting for 20 per cent also expect to see earnings growth above five per cent.
To support these growth prospects, the vast majority of leaders of 94 per cent plan to increase their workforce over the next three years, with 37 per cent estimating a headcount growth of six per cent or more.
Despite this outlook, confidence in the overall health of the industry has dropped to 67 per cent from 80 per cent last year. The survey reveals economic uncertainty estimated at 57 per cent and geopolitical complexities at 53 per cent as the top challenges noted by CEOs for the year ahead.
A key to success in life sciences is innovation. Therefore, it’s no surprise that the survey reveals sector CEOs are ramping up their investment into new technologies, digitalization and AI to catalyze growth and innovation. Despite concerns about ongoing economic uncertainty, 60 per cent of sector CEOs say that Gen AI is their top investment priority. More than three-quarters also state AI will help them create competitive advantages in the near future, as 77 per cent are expecting to see ROI in the next five years.
CEOs understand that mastering ESG is integral to their operations, strategies and building public trust. Failure to do so could negatively impact their sustainability and reputation. 38 per cent of life sciences CEOs believe their ESG strategy has the greatest impact in building customer relationships and brand reputation.
Sharing his views, Vijay Chawla, partner and head life sciences, KPMG in India said “The life sciences sector is a firm and keen believer in the importance of sustainability, with a majority of pharma companies, in particular, being in the vanguard of ESG. This is working its way through the supply chain and we’re seeing material changes in the life sciences ecosystems which is a positive step in the right direction. Gen AI is poised to be a game changer and will be more impactful than ever before.”
Companies across the entire life sciences spectrum have a key role to play in the transition to net zero. Positioned in the middle of the value chain, life sciences companies’ emissions are indirectly affected by activities of their upstream suppliers, such as raw materials and ingredients manufacturers, as well as the direct emissions produced by their own operations.
However, the survey reveals that just 43 per cent of sector CEOs are confident they can meet their organization’s net zero goals by 2030 - the second-lowest level of confidence amongst the 11 different sectors surveyed as part of the research. Leaders cite a lack of skills and expertise, the complexity of decarbonizing their supply chains, challenges gathering and analyzing data and problems, and setting up the right internal controls.
|