Focusing on innovation, AI, and trust generates financial benefits for companies

Geopolitical turmoil

Dutch CEOs, operating within the highly open Dutch economy, are more concerned than their international counterparts about the impact of geopolitical instability. Their strong concerns about cyber risks are closely linked to this. Nearly two‑thirds of Dutch CEOs say they plan to strengthen their cybersecurity measures in response to global tensions. This is also higher than the global average of 47%.

What stands out is that Dutch CEOs seem less worried about trade tariffs, even though these also affect the Netherlands’ open economy. PwC partner and expert Claudia Buysing Damsté explains that there are good reasons for this. 'The impact of tariffs is felt primarily by companies that export to the US. That flow is relatively small compared to other countries, which therefore experience more impact. At the same time, we see that tariffs are being used as an instrument to exert geopolitical pressure and continue to contribute to increasing uncertainty in international trade flows.'

Buysing Damsté: 'Geopolitical tensions cover a much broader spectrum. They include, for example, trade blockades or regions becoming too unsafe to operate in or to move goods through. This requires companies to hold larger inventories. All of this has a much greater and broader impact on business operations.'

Pace of technological developments

As the findings above show, one‑third of Dutch CEOs see the limited availability of people with the right competencies as a major threat to their business operations. Half of Dutch CEOs are deeply concerned about whether the transformation of their organisation can keep up with the pace of technological developments. This is closely linked to the availability of the required skills, but also to other organisational factors. The CEO Survey also reveals that internal resistance within many organisations is a significant barrier to implementing transformations.

Economic outlook and company prospects

Uncertainty and technological challenges lead the surveyed CEOs to view the outlook for their own companies over the next twelve months with some caution. Both globally and in the Netherlands, only thirty percent of CEOs express strong confidence in revenue growth in the near future. They are, however, more positive about developments in their national economies—and especially about the global economy.

Macro‑optimism versus micro‑realism

PwC’s Chief Economist Barbara Baarsma describes this outcome as 'macro‑optimism versus micro‑realism.' Baarsma: 'Companies know that revenue is ultimately earned through execution, and that is precisely where the bottlenecks are. The economy is performing reasonably well now, but revenue growth can only be realised once the foundations for change within a company are properly in place. This CEO Survey shows, for example, that companies do not yet have their foundations for applying AI sufficiently in order. Dutch CEOs also indicate—based on a question in the Dutch survey—that they face internal resistance when taking measures to increase labour productivity. And productivity growth is an important predictor of revenue growth. In addition, labour market tightness, limited nitrogen space, and an overburdened infrastructure are holding back the growth ambitions of Dutch companies. So, while Dutch CEOs are positive about the cyclical outlook, these structural factors are hindering productivity and revenue ambitions.'  

Applying AI

Most global respondents in the CEO Survey are working on applying AI within workflows and processes. However, this is still happening on a modest scale. Dutch CEOs are lagging in this regard.

PwC partner and AI expert Edwin van Bommel: 'AI is developing faster than organizations can implement it. The fact that AI is most widely used in sales, marketing, and customer service makes perfect sense. Predictive AI has been applied there for years. We now see GenAI being used extensively in these areas as well to increase speed and reduce costs. I expect that large‑scale application of AI in operational processes, such as in banking or healthcare, and in product development will lead to the next wave of measurable improvements.'

Benefits of AI

Globally, only a minority of companies report revenue growth or cost reductions from AI. Around one‑third of respondents say they are seeing revenue growth (29 percent) or cost reductions (26 percent) following using AI. A significant share (22 percent), however, reports rising costs. Further analysis shows that only twelve percent of all respondents have succeeded in achieving both revenue growth and cost reduction. Among Dutch respondents, fifteen percent report revenue growth due to AI and 24 percent report cost reductions.

Van Bommel: 'We have long seen that Dutch organizations are cautious in adopting AI, just as we see across the EU. This is undoubtedly linked to stricter regulation. Companies that apply AI in a very strong and responsible manner are creating value. Dutch and other European companies are leaving value on the table here.'

Getting the AI fundamentals right

Global analysis shows that companies with strong 'AI fundamentals' are more likely to report revenue growth and cost reductions. These fundamentals relate to aspects such as organizational culture, a clear strategy, investment levels, and data infrastructure. For many companies, these foundations are far from optimal and—once again—the Netherlands appears to be lagging. The analysis also shows that only one‑fifth of all respondents are performing well across all these areas.

Edwin van Bommel: 'Only when your foundation is in order can you scale. And the true gains from AI can only be achieved when it is applied at scale. I therefore strongly encourage CEOs to start working on this now and not wait too long. Implementing technology is relatively easy; creating the right foundation to ensure that this technology is used optimally is far more difficult.'  

Innovation

The CEO Survey shows a similar pattern when it comes to innovation. Companies that have a strong innovation foundation—such as collaboration with knowledge partners and a healthy tolerance for risk—generate more revenue from new products and services than companies without a robust innovation base. Compared to their global peers, Dutch companies perform well in this area.  

Reinvention

Although Dutch companies have a strong innovation foundation, actual 'reinvention' is lagging. We already saw that Dutch CEOs are falling behind when it comes to deploying AI across different parts of their organisations and in achieving cost reductions and revenue growth. A question posed exclusively to Dutch CEOs shows that the main reason productivity‑enhancing measures are not being implemented is internal resistance within their own organisations.

Innovation can only succeed if end users and their stakeholders trust the technology: they need to know it is built safely and responsibly. This is even more critical when it comes to the application of AI. Are the outcomes accurate? Has data been collected and used carefully and responsibly? Our CEO Survey shows that most issues affecting trust between companies and stakeholders over the past year related to data use, privacy, and the safe and responsible use of AI.

Trust has value

Further research shows that 'trust' quite literally pays off. When comparing publicly listed companies within the global respondent group, it becomes clear that companies with few trust‑related issues generated, on average, nine percentage points more shareholder value over the past twelve months than companies with many issues.

PwC expert Karin Meijer: 'CEOs indicate that stakeholders are most critical about data use and privacy, and the safe and responsible application of AI. Customers do not want their personal information exposed, and they expect transparency about how algorithms are used. CEOs are highly aware of this. Their question is: how do we do this well? And how do we protect our organisation against hacks and attacks? This is not easy, because the technology evolves so rapidly.'

'As a CEO, you cannot make an uncertain world certain. But you can work on building trust: ensure that the things you can control are in good order. This includes strong relationships, solid collaboration with stakeholders, customers, and suppliers, robust processes and controls, transparency, and clear reporting, also regarding AI deployment and data privacy. Trust helps a company perform better. Trust is a competitive advantage. And this holds true for all companies, not just listed ones.'