​Romania has a chance to double its gross domestic product over the next decade, as it did in the last decade, by reducing economic imbalances, attracting new investments by leveraging the geopolitical context, and prioritizing education to prepare the workforce of the future. Opportunities and threats to economic and business growth, as well as the need to rethink companies in the context of accelerated changes, were discussed during the presentation of the PwC CEO Survey 2024 report: Dinu Bumbeca, managing partner of PwC in Romania, Adam Crason, CEO of PwC in Central and Eastern Europe, Mihaela Bitu , CEO of ING Romania and Bohdan Putinika, Regional Manager of Microsoft Romania.

You can watch the conference here:

On rethinking and what companies will look like in 10 years: the share of CEOs in Romania who believe that their organizations need to rethink their business model to survive in the next decade has increased to 37% this year, up from 27% in the previous edition of the CEO Survey directors of PwC.

From Bumbacea: If in past studies under the influence of the pandemic and, subsequently, the conflict in Ukraine, the main concerns were related to continuity or security, this year the need to rethink business models has become much more important in order to remain relevant in the coming years.. In the next three years more pressure is expected from factors that fundamentally affect the way we do business: technology, climate change or consumer preferences.

Consulting periodically rethinks itself. The speed at which consulting services are being reinvented today has accelerated tremendously, and we work with banks and technology companies to drive new models and the entire transformation process. The consulting services model 10 years ago is very different than it is today, and certainly completely different from what will happen two years from now, not ten. Success will depend on the extent to which we all manage to adapt to the pace or speed of change.

Bohdan Putinica, regional manager of Microsoft in Romania: Transformation is something we talk about every day at Microsoft, and in 10 years I’d like to see that transformation already happening, and perhaps happening directly, in a way that we can enjoy the results of.

Mihaela Bitu, CEO of ING Romania: We are actually working on a 10-year strategy now. In fact, we are reviewing our long-term strategy, not only us, Romania, but within the group, several countries. It’s about how we’re going to redefine our operating models, our service models, how we redefine that technical foundation that allows us to innovate, allows us to grow and improve the customer experience.

Adam Crason, CEO of PwC CEE: The need for rethinking is growing, and business leaders around the world increasingly see the urgent need for transformation. Old approaches are no longer adequate to the challenges of megatrends such as technological disruption and climate change.

Our Rethinking Guide outlines the four most important aspects that can facilitate transformation processes while addressing the challenges of a rapidly changing world: using the cloud as a foundation for technology and business transformation, prioritizing cybersecurity to ensure business viability in a digital world, embracing sustainability to develop business and use of outsourcing services.

PwC CEO Survey 2024 Threats and Opportunities

Michael Bitu: The geopolitical zone is a real threat. We didn’t think about it 10 years ago. We are in an extremely sensitive situation that could have catastrophic economic and social consequences. From a business point of view, of course, there are some macroeconomic imbalances in Romania: we are still in an excessive budget deficit scenario, we are also going through an election year, so we do not expect much progress this year. year, and such a slow development may eventually lead to a weakening of the confidence of investors and rating agencies, which can obviously have consequences. We need more decisive measures from politicians in the field of reducing the budget deficit. Within the framework of the PNRR, we have a historic opportunity for Romania: if we cannot take the necessary measures in a fairly quick period of time, we risk losing some significant funds, which will have a significant economic impact on the Romanian economy. And thirdly, to what extent we can strategically position ourselves to attract as many investments as possible against the background of this geopolitical situation, but not only. Investments are coming to Europe and if Romania does not position itself, and unfortunately in the past we have seen that other countries in the region have been more capable and more determined – Hungary, Poland – this may also be a lost opportunity.

Bohdan Putinika: We have no shortage of challenges in Romania. The first will be gambling with education. All the statistics show that education is not necessarily synchronized with the global trend of evolution, with the potential of this country, with what we can get from the country’s human capital (…) Unfortunately, the decision makers are not listening very much to the needs of industry, they do not listen to the economic base where Romania can produce added value and, accordingly, do not synchronize public policy with economic needs. And then our education, this, let’s say, poor girl of Romania, continues to be ignored. And from that perspective, the risk or the missed opportunity that I see is that this human capital continues to be produced at a level or at a quality that may not cover the full potential that the economy can create. The second missed opportunity I see in technology is competitiveness. Increasing the competitiveness of the workforce at the national level is now a very fashionable topic. What does it mean? A digital curriculum driven by the desire to be relevant and economically competitive in the next 5, 10, 15 years. And this is a very wise policy at the country level that increases the value of the whole society, in this case, obviously, based on technology.

Michael Bitu: I believe that we, the private sector, can and should be involved in educational progress from at least two perspectives: the first perspective is to be very close to the academic environment and to be able to make proposals, specific proposals. universities, what skills they need to develop in their students and what curriculum they need to develop to be relevant for years to come. Therefore, I believe that we should be very active and very close to academia.

About the evolution of Romania’s economy: 37% of CEOs predict growth in the Romanian economy this year, compared to 26% in 2023.

Michael Bitu: However, Romania has the potential for economic growth above the European average in the next 10, 15, maybe 20 years. This is a great opportunity for all of us, both at a personal level and at the level of the businesses we run. Our strategic positioning also in the reconstruction of Ukraine can give an obvious boost to economic growth.

This year, in the absence of major external shocks, we believe that there will be a positive macroeconomic evolution with slightly higher economic growth, probably around 3%, with inflation continuing its downward trend, but after 2024 the interest rate cut cycle that we all expect later this year. So, there are some positive preconditions and we think the year will be quite good. We believe that 2025 will bring some interesting challenges: the budget deficit problem in the absence of a much better levy. There is a clear possibility of further action over the next year, and obviously this could lead to further economic consequences. It depends on the scale of these measures, on the mixture that will be chosen.

Bohdan Putinika: The first chance is a direct link between digital skills and the level of economic well-being of a country. The countries of Northern Europe, for example, may be very advanced in terms of economy and standard of living, but they also have a very high level of digitization of the population. In Romania, everything is exactly the opposite. We are the last in Europe to introduce technology, and from this point of view the correlation with the level of well-being is direct. I think that the second chance for Romania is in the energy sector.

We have already started to see a slowdown in implementation because many people are already caught up in the election fever, the various campaign rhetoric. One of the things we would really like to see is multi-year continuity or multiple political election cycles. In certain situations, we see kernels of quality, very good policies that have produced great results for Romania, which are interrupted simply because the leadership or the political color has changed.

From Bumbacea: I think that in the next period we can even grow more than 100%, but with more intensive internal efforts. Context helps us a lot now. Even if the population is shrinking, the size of our country is of great importance to the overall economy of the European Union and beyond. In a way, the geopolitical context also helps us a bit, i.e. the development that is expected, at least in the less developed part of Romania. I am referring to the region of Moldova, which will undergo significant changes in the next period. Consider how different types of business, logistics, production have developed. I have some optimism, I really believe that we can go even faster to double GDP.

PwC CEO Survey 2024 on Artificial Intelligence: 53% of Romanian CEOs believe that generative artificial intelligence (GenAI) will significantly change the way companies work and increase competition in the next three years.

From Bumbacea: The impact of artificial intelligence and automation should be all the greater as the changes in the environment in which we work are fundamental. CEOs in Romania tend to be more reserved about the state of implementation and the changes that generative AI will bring to organizations compared to their counterparts globally and in CEE. Only one in four respondents indicated that generative artificial intelligence had been adopted at their company in the past 12 months. Romania was not necessarily a “leader” in the introduction of new technologies. To maintain our competitiveness and the economy in which we operate, change probably needs to happen faster than it is now.

Bohdan Putinika: For example, for one dollar invested, the ROI (return on investment) we are currently analyzing is $3.5, which is an effective investment. And the second number is related to productivity. We are already seeing the adoption of artificial intelligence both horizontally and vertically across our manufacturing facilities across industries, cyber security, sales, transportation, and more.

Michael Bitu: The range of applications is huge in terms of efficiency, but not only that, it’s how we can improve, actually enhance the services, the products that we offer, the experience of our customers. Especially in the banking industry, given that we are still a critical area, a critical infrastructure, we are very careful, we cannot rush. We have to manage the risks very carefully and very properly because they exist. First, we try to experiment with scenarios that relate to our internal processes and do not necessarily affect data, customer experience, etc. This will happen in the second step, which is just around the corner.

Article supported by PwC Romania