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2 December 2005| Member Edition

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Survey

The McKinsey Global Survey of Business Executives , March 2004

Executives around the world voice cautious optimism on the economy. Theyre bullish on outsourcing
and Asia but concerned about talent and capital.
Web exclusive, March 2004

Table of Contents

Introduction
Global economy
Executive agenda
Outsourcing
FDI

Interested in the full results?

Premium members can access the full results of the survey in a downloadable PDF.
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Chief executives and other senior corporate leaders around the world agree that the global economy has
improved in the past six months, but fewer are confident that the improvement will continue into the
second half of the year. They also agree that outsourcing is good for the world economybut somewhat
less so for individual companies. And they view Asia as the region with the most promising growth
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prospects for 2004.

These are among the findings of a McKinsey Quarterly survey of some 7,300 senior executives from
large and small companies. The survey, conducted in January, polled leaders from a wide range of
industries and regions to develop a worldwide barometer of executive sentiment on economic and
business trends. Subsequent surveys will update the responses and analyze changing trends.
Forty percent of the respondents came from North America; 33 percent from Europe; 16 percent from
developing markets, including China and India; and 11 percent from the Asia-Pacific region, including
Australia, Japan, and Singapore. Twelve percent of the respondents were chief executives.
What follows is a topic-by-topic examination of the results, broken out by region and company size
where those differences reflected divergent opinions.

Table of Contents

Introduction
Global economy
Executive agenda
Outsourcing
FDI

Interested in the full results?

Premium members can access the full results of the survey in a downloadable PDF.
Not yet a Premium Member? Upgrade now.
The economy: Better than it was six months ago but may be leveling off

An overwhelming number of executives in the survey, from companies of all sizes and in all regions,
believe that the global economy is healthier than it was six months ago, though many expect the
improvement to level off during the first half of 2004. A confidence index derived from the survey
registered a level of 67; on the scale, 50 or more indicates optimism. Executives in developing markets,
with a confidence index of 71, are more bullish than the overall survey average.
Executives in China and India are more optimistic than their peers in the rest of the world, with 87
percent and 80 percent, respectively, predicting the economic climate will get even better by July. Of the
other executives surveyed, 73 percent shared that sentiment.

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Table of Contents

Introduction
Global economy
Executive agenda
Outsourcing
FDI

Interested in the full results?

Premium members can access the full results of the survey in a downloadable PDF.
Not yet a Premium Member? Upgrade now.
The executive agenda: Smaller companies hunt for talent and capital, while larger ones worry
that consumers will rein in their spending

Although executives are optimistic, they dont see an easy road ahead. In most regions, the economy
tops more executive agendas than any other single concern. The exception: emerging markets, where
executives are focused on the search for talent.
Beyond the economy, the concerns of executives from big companies (annual revenues of $1 billion or
more) and smaller ones (revenues less than $1 billion) diverge in significant ways. Executives of larger
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companies worry about the sustainability of consumer spendingconsidered the lifeline that kept the
recent US economic downturn from becoming still worsefollowed by the competition for talent. Many
also listed currency fluctuations, pricing, and global competition as key concerns.
Among executives at smaller companies, however, hiring and retaining talent is the second most
important concern. Access to capital, which executives at larger companies hardly notice, comes in third.

Table of Contents

Introduction
Global economy
Executive agenda
Outsourcing
FDI

Interested in the full results?

Premium members can access the full results of the survey in a downloadable PDF.
Not yet a Premium Member? Upgrade now.

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Outsourcing is good for the world but a little less so for individual companies

Perhaps not surprisingly, executives in developing markets are more bullish than are their counterparts
in developed ones about the benefits, for companies and the world economy, of outsourcing
manufacturing and business processes to low-wage countries. Executives in China and India are the
most upbeat by far: 95 percent and 98 percent, respectively, believe that outsourcing has a "very
positive" or "somewhat positive" effect on the world economy.
In all markets, executives think that outsourcing is better for the economy as a whole than for their own
companies. The largest discrepancy occurs in North America, particularly in the United States, where
the issue has become politically sensitive.

Table of Contents

Introduction
Global economy
Executive agenda
Outsourcing
FDI

Interested in the full results?

Premium members can access the full results of the survey in a downloadable PDF.
Not yet a Premium Member? Upgrade now.

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Policies on foreign direct investment are critical, especially to executives in developing

economies

Companies naturally consider policies on foreign direct investment when they determine where to invest
offshore. Executives in the developing world, however, are more likely to consider such policies
"critically" or "somewhat" important (96 percent) than are their colleagues in developed markets (80
percent). Less than half of the executives in developed economies find such policies "critical."

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