By Alan Murray and David Meyer
January 23, 2018

Good morning.

Global CEOs are remarkably optimistic about the economy in the year ahead, according to a survey of nearly 1,300 of them released yesterday by PwC for the Davos confab. Some 57% said the economy will improve in the next 12 months, which is the most optimistic reading in the seven years PwC has been conducting the survey.

The U.S. is viewed as the best market for investment—a sentiment that has modestly increased in the year since Trump became president. Of the CEOs surveyed, 46% said the U.S. was the best place to invest, up from 43% last year, while 33% chose China—the same percentage as last year.

Interestingly, the biggest risks seen by CEOs were more political than economic. Those in the U.S. cited cybersecurity as the top risk; Europeans and Latin Americans chose rising populism; and Middle Easterners cited “geopolitical uncertainty.” Only in Asia did the CEOs cite economic factors—the skills shortage and the rapid pace of technological change—as the top threats facing their business.

I spent some time in Davos yesterday with Microsoft President Brad Smith, who echoed the survey findings. “In our lifetime, there has never been a time when the macroeconomic outlook and the geopolitical outlook have been so disconnected,” he said.

The PwC survey also showed that nearly half the CEOs share a concern that future economic growth will benefit “the few,” not “the many”—a function of the winner-takes-most nature of today’s digitally driven businesses. Along those lines, Smith and Microsoft’s EVP of Artificial Intelligence, Harry Shum, are circulating a new book that, among other things, explores the demands that AI is going to create for new skills and job retraining. Smith is advocating a focus on apprenticeship programs, like those in Switzerland, as one way to address the critical challenge.

Meanwhile, the most frequently asked question in Davos this week is: “What will Trump say?” This annual gathering has become the epicenter of globalization, and the U.S. president has been its most ardent critic, making his speech Friday a subject of heightened speculation. Stay tuned.

More news below.

Alan Murray


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