Technology is poised to reshape the business world by 2024 despite near-term recessionary concerns and a global talent crisis

TORONTO, Nov. 24, 2022 /CNW/ - Most of Canada's biggest organizations are turning to major emerging technologies to enhance their products and services, drive operational agility and efficiency, defend market share, and win new business, according to a recent Global Technology survey by KPMG International.

In the next two years, almost all technology leaders (95 per cent) surveyed at private- and public-sector organizations in Canada plan to invest in Web3, the third iteration of the internet, the survey found. Approximately 70 per cent plan to invest in fifth-generation wireless technology (5G) and edge computing, 67 per cent plan to capitalize on quantum computing and over half (54 per cent) plan to invest in the metaverse over the same period. Over six in 10 plan to invest in virtual and augmented reality technologies.

The findings underpin research in KPMG's recent Global CEO Outlook in which Canadian chief executive officers ranked emerging or disruptive technologies as the No. 2 risk to company growth over the next three years, trailing only regulatory concerns.

"The race to transform is on," says Sanjay Pathak, Partner and National Leader, Technology Strategy and Digital Transformation Services, KPMG in Canada. "At a time when digital leaders face rising costs, a potential recession, and a global talent crisis, they are turning to emerging technologies to build business resiliency, harness data and analytics to enhance decision making, and drive growth.

"While it may seem counterintuitive to invest in innovation on the precipice of an economic downturn, these technologies are difference makers and will separate digital leaders from the laggards," he says. "Increasingly, we are seeing digital leaders become proficient in new and emerging technologies and these new advancements will reshape the business world within the next few years. But as with any transformative change, technology is only an enabler. It must be totally aligned to business purpose and strategy and the risks must also be carefully assessed, mapped out and mitigated."  

Planned Technology Investments:

Significantly more Canadian organizations said they are behind schedule in implementing their digital transformation strategies than their global peers, the survey showed. Half of technology leaders in Canada (51 per cent) said their programs have been delayed or had slowed despite C-suite support and funding, compared to only 40 per cent globally.

This is in line with previous KPMG research that found many such programs had been, or were about to be, put on hold not only to prepare for a near-term potential recession but also to cope with employee burnout and the lack of skilled talent.

Technology leaders also identified the talent shortfall as one of two top barriers that is preventing their organization from adopting new digital technologies. The other barrier is their organization's aversion to risk or that reluctance to let go of existing procedures.

"In a downturn, companies that typically come out on top are those that maintain their investment focus on critical business priorities, build use cases for disruptive technologies, and ensure they're developing the required skillsets either in-house or by establishing a strong ecosystem of external partners," says Kathy Penner, Partner and National Leader, Technology Enterprise Solutions, KPMG in Canada. "So when there's an upturn, they are ready to leverage these investments and drive outsized growth."

All respondents to the survey acknowledged the positive impact of their digital transformation efforts to-date: An increase in profits and performance.

In the last two years, a quarter (26 per cent vs. 38 per cent globally) reported profits increased between 6-10 per cent as a direct result from their transformation journey. A further 19 per cent (20 per cent globally) experienced an 11 per cent or more increase in profitability, and over half (54 per cent vs. 42 per cent globally) increased profits by 1-5 per cent.

"Leaders are looking at technology and digital investments with increased scrutiny," says Ms. Penner. "The need for demonstratable return on investment and scalable delivery models being top of mind for most."

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KPMG International surveyed more than 2,200 technology executives at some of the world's largest organizations across 15 countries, including 125 in Canada during the second quarter of 2022. Nearly half (48 per cent) of the respondents are headquartered in the U.S. Among the Canadian respondents, 17 per cent are with organizations reporting between US$20 billion and US$50 billion in annual gross revenue; 10 per cent are with organizations with more than US$10 billion but less than $20 billion; 26 per cent report between US$5 billion and $10 billion; and 42 per cent have between US$1 billion and $5 billion in revenue. Sixty-five per cent of Canadian respondents work at organizations with more than 10,000 employees. Over half (54 per cent) are publicly held companies, 22 per cent are privately held, and the remaining 25 per cent are governments or non-profit organizations.

KPMG LLP, a limited liability partnership, is a full-service Audit, Tax and Advisory firm owned and operated by Canadians. For over 150 years, our professionals have provided consulting, accounting, auditing, and tax services to Canadians, inspiring confidence, empowering change, and driving innovation. Guided by our core values of Integrity, Excellence, Courage, Together, For Better, KPMG employs more than 10,000 people in over 40 locations across Canada, serving private- and public-sector clients. KPMG is consistently ranked one of Canada's top employers and one of the best places to work in the country. 

The firm is established under the laws of Ontario and is a member of KPMG's global organization of independent member firms affiliated with KPMG International, a private English company limited by guarantee. Each KPMG firm is a legally distinct and separate entity and describes itself as such. For more information, see home.kpmg/ca 

SOURCE KPMG LLP