Sixty-two percent of CEOs worldwide recognize that a greater share of revenues will come from emerging markets in next five years but still ranked developed nations as most attractive markets for innovation: PwC survey

Cindy Allen

WASHINGTON , November 15, 2011 (PricewaterhouseCoopers) – Sixty–two percent of Chief Executive Officers (CEOs) recognize that a greater share of revenues will come from emerging markets in the next five years, but still ranked developed countries as the most attractive markets for investments in innovation, according to a PwC-commissioned survey released today. PwC is the exclusive research provider to the fourth annual Wall Street Journal CEO Council meeting. Survey respondents included over 200 CEOs from nearly twenty different countries.

When asked which markets are the most attractive for investments in innovation, China and India topped the list and were identified by 20 percent of respondents each. The U.S. was cited by 16 percent of CEOs as the third most attractive market. Emerging markets in Asia (eight percent), the Middle East (five percent) and in South America (one percent) were not perceived as attractive regions for innovation investments.

"In today’s global economy CEOs are contending with several competing priorities as they chart a course for growth," said Bob Moritz, Chairman and Senior Partner, PwC US. "The PwC-commissioned Wall Street Journal CEO Council Survey identifies these priorities and the interrelatedness of doing business globally, strengthening relationships among key countries to help revive economies, anticipating global workforce health concerns and encouraging and protecting innovation."

Doing Business Globally
The last few years have brought highly regulated environments across industries. In response, businesses seek markets with attractive legal and regulatory structures and almost one-fourth of survey respondents indicated Germany as the most attractive country for new investments. The United States, China, India and Brazil rounded out the top five.

Forging a Stronger U.S.-China Partnership
Strengthening the relationship between the world’s two largest markets is critical and respondents were asked their top priorities for improving the U.S.–China partnership. The CEOs surveyed identified stronger protections for intellectual capital in China, the convergence of global standards (e.g. consumer protections) and stronger corporate governance rules in China as the top three priorities.

Forty-four percent of those surveyed also cited protecting intellectual property as the biggest risk for foreign companies doing business in China, followed by protecting against risks associated with the integrity of suppliers (21 percent).

Global Health
While China and India were among the more favorable markets for attractive legal and regulatory structures, they ranked two and three, respectively, in terms of markets that pose the greatest risk with respect to workforce health and healthcare availability. Africa topped that list while the Middle East and Asia rounded out the top five.

Thirty percent of CEOs identified access to clean water as the biggest threat to global health today while another 24 percent identified the impact of climate change on global supply of food, water and natural resources as the second biggest threat.

Encouraging and Protecting Innovation
CEOs ranked the U.S. as the third most attractive market for innovation investments, but nearly 40 percent of those surveyed identified a lack of adequate intellectual property protections in developing countries as the biggest threat to the U.S.’s role as a global innovation leader.

Ineffective early education systems and policies (15 percent) and immigration policies that do not allow U.S. organizations to retain innovative talent educated in the U.S. (14 percent) were identified as additional threats to the role of the U.S. in leading global innovation.

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