KPMG’s recent study sheds light on the confidence life sciences CEOs hold regarding their company’s growth, even amidst dwindling belief in the industry, economic volatility, and AI implementation challenges, alongside net zero objectives.
The KPMG 2024 Life Sciences CEO Outlook, now in its 10th global year, indicates that 79% of sector leaders are optimistic about their company’s growth, marking a 10% increase from last year. Additionally, 20% anticipate earnings growth exceeding 5%.
To support these ambitions, an overwhelming 94% of leaders plan workforce expansions over the next three years, with 37% projecting a growth of six percent or more in headcount.
Conversely, confidence in the industry’s overall condition has declined to 67%, down from 80% the previous year. The survey identifies economic unpredictability, cited by 57%, and geopolitical complexities, by 53%, as the foremost challenges CEOs foresee.
Innovation stands as a cornerstone in life sciences, a finding corroborated by the survey’s display of leaders increasing investments in new technologies, digitization, and AI to drive growth and cutting-edge advancements. Despite prevailing economic concerns, 60% acknowledge Gen AI as a primary investment focus, with over three-quarters anticipating AI will foster competitive advantages shortly, with 77% expecting notable ROI within five years.
CEOs recognize that ESG mastery is pivotal to operations, strategies, and fostering public trust, with 38% attributing their ESG strategy as vital to nurturing customer relationships and enhancing brand reputation.
Vijay Chawla, KPMG in India’s Partner and Head of Life Sciences, remarked, “The life sciences sector regards sustainability highly, with many pharmaceuticals leading the charge in ESG. This is influencing supply chains significantly, marking a positive trajectory. Gen AI is set to revolutionize the landscape more profoundly than ever.”
Life sciences firms play a critical role in the net-zero transition, positioned centrally in the value chain. Their emissions are impacted by upstream suppliers and their operations.
Despite this, only 43% of CEOs are confident in achieving net-zero targets by 2030—ranking the second-lowest confidence level among 11 surveyed sectors. Challenges include lacking expertise, complex supply chain decarbonization, data analysis difficulties, and establishing robust internal controls.