Russian CEOs are the most optimistic, 95% of them are somewhat/very confident of short-term growth.
Growth prospects for the global and Russian economies
President Vladimir Putin has stated that by 2018 Russia should move up to 20th place in the World Bank's Doing Business rating. Undoubtedly, investor confidence in Russia will continue to grow as the Government moves ahead in implementing the reforms necessary for achieving this goal.
The survey results show that half of CEO respondents, both at the global and local level, see a continuation of the status quo in the global economic environment, with Russian business leaders planning to carry out more M&A deals (predominantly in the domestic market).
For the second year in a row, Russian CEOs are also planning to boost staff numbers, and invest in personnel training and development. At the same time, we’re seeing a declining proportion of respondents who are bearish on the global economy’s future prospects.
Russian CEOs believe that their country's economy is well positioned to cope with global economic turbulence, even with the likelihood that it will post lower growth rates over the coming year. They highlighted that the Government's adroit monetary policy helped keep the lid on inflation in 2011.
In the coming year, a massive of 58% of Russian respondents expect to boost headcount
Many top managers place high hopes on the middle class and its further expansion. Significant economic growth will be demonstrated by those Russian regions where small and medium-sized business is developing at a rapid pace.
The survey results show that the proportion of those who are “fully confident” in business growth over the next 12 months has risen by a third to 66%, versus 48% last year. A survey question regarding short-term (12-month) growth prospects produced the same result (66%).
Over 70% and 39% of Russian CEOs, respectively, believe that the collapse of the eurozone and a recession in the US are highly unlikely scenarios.
In Russia, 59% of respondents are concerned about fiscal problems, even though Russia’s sovereign debt is smaller than in most European countries, standing at only 11% of national GDP. By comparison, it is 91% in the UK, 99% in Germany and 192% in Greece.
Concerning their approach to corporate governance, Russian CEOs (80%) cited centralised control over risk management more frequently than their global peers.
More than half (54%) of Russian CEOs surveyed plan to amend their management strategy over the next year, especially in such areas as expanding their customer base, retaining clients and increasing client loyalty. Eighty percent of respondents, both in Russia and globally, reported such plans.
In addition, Russian CEOs also plan to make changes in their strategies for managing risk (71%), increasing capital investment (73%) and investing in technology (71%).
The government and the business community
Russian CEOs believe that the investment priorities for both government and business should be:
Developing infrastructure (80%).
Ensuring financial sector stability (68%).
Training skilled personnel (56%).
One-third of respondents plan to boost investment in employee health care.
While 41% of Russian CEOs believe that the government is responsible for maintaining financial sector stability, one in five say that their company intends to increase its investment toward achieving that goal.
What impacts a company’s growth strategy?
Russian CEOs see the greatest impact on their business strategy coming from:
Clients and buyers (98%).
Sources of capital - creditors and investors (83%).
Business partners in the supply chain (68%).
Company employees (63%).
Ninety-two percent of respondents said they plan to boost the role of social network users in the strategy formulation process.
Russian CEOs rely on foreign markets more than their Chinese peers, for instance, or than CEOs in the BRICs overall. However, 88% expect the lion's share of M&A deals to take place in the domestic market.
A quarter of Russian respondents are seeking to acquire assets in Western European, while the same number are interested in Southeast Asia.
For Russian CEOs, the priority areas for investment over the next 12 months are:
Improving operational efficiency (63%).
Production capacity (44%).
Expanding the client base (41%).
Forty-four percent of respondents plan to invest in Russia-based production capacities, which is three times greater than in the US, Western Europe and China.