Health of Global Economy Seen as Greatest Threat to Business in 2005, Accenture Study Finds

Competition and Risk to Corporate Reputation Also Big Threats

NEW YORK; Jan. 24, 2005 – The health of the global economy is seen as the biggest threat to companies’ success in 2005, according to results of a global survey of senior executives released today by Accenture (NYSE: ACN).

The purpose of the study, drawn from interviews with nearly 900 senior executives at many of the world’s largest organizations, was to identify and prioritize the issues of greatest concern to senior management, understand how their priorities shift over time, and identify key forces behind those issues.

When asked to select from a list of 10 threats to their companies’ success in 2005, the greatest number of respondents—74 percent—selected “the health of the global economy.” “The competition” ranked second, selected by 72 percent of respondents, followed by “my company’s reputation” (64 percent), “inability to attract and retain the best talent” (53 percent) and “low employee morale” (50 percent).

However, there were noticeable differences between respondents in different countries. For instance:

  • While terrorism was seen as a major threat in the United States and Spain, selected by 53 percent and 50 percent of respondents in those countries respectively, only 44 percent of respondents overall viewed it as a major threat to their success.

  • In Japan, the “inability to develop new products and services” was seen as the greatest threat, selected by 91 percent of respondents there, compared with 63 percent globally and only 40 percent in the United States.

  • Concern over the global economy was highest in Italy (88 percent) and France (84 percent) and lowest in Germany (55 percent).

“This survey shows us that concerns about global economic health are still weighing on the minds of executives in 2005, but it is also clear that executives are sharply focused on addressing the fundamentals that drive high performance such as meeting the challenge of competition and attracting and retaining the best talent,” said Mark Foster, Group Chief Executive—Products, with responsibility for Accenture’s policy and corporate affairs. “Successfully meeting these challenges will help these companies’ weather difficult economic trends and be poised to excel as economic conditions improve.”

The following tables illustrate how the top business threats differ by management role and geography.

Management Role CEO CIO CFO
The health of the global economy 74% 78% 74%
The competition 61% 66% 82%
My company’s reputation 62% 60% 66%
Inability to attract and retain the best talent 64% 65% 71%
Low employee morale 56% 55% 57%
Inability to develop new products and services 53% 53% 54%
Inability to focus on our core competencies 48% 44% 52%
Compliance with government regulations 53% 48% 48%
Instability of senior leadership 47% 45% 49%
Terrorism 41% 47% 42%
Other 9% 7% 8%

Geography France Germany Italy Japan Spain UK US Canada
The health of the global economy 84% 55% 88% 75% 74% 68% 72% 83%
The competition 69% 61% 65% 87% 77% 77% 73% 69%
My company’s reputation 73% 47% 79% 89% 81% 55% 50% 55%
Inability to attract and retain the best talent 75% 43% 61% 71% 73% 60% 62% 62%
Low employee morale 65% 45% 58% 77% 77% 48% 46% 48%
Inability to develop new products and services 68% 42% 57% 91% 69% 47% 40% 46%
Inability to focus on our core competencies 59% 37% 45% 77% 59% 39% 42% 51%
Compliance with government regulations 51% 44% 38% 48% 57% 56% 50% 38%
Instability of senior leadership 49% 32% 45% 84% 70% 37% 38% 46%
Terrorism 44% 32% 46% 41% 50% 41% 53% 35%
Other 12% 30% 7% 7% 9% 9% 1% 1%

About the Study
As part of an annual study to identify senior executives’ top concerns, Accenture conducted a Web-based survey of 894 senior executives at many of the largest organizations around the world. Respondents represented all major industries and the public sector and included executives at the highest levels of senior management (“C-suite” executives) as well as heads of key functional areas, such as human resources. For this year’s study, fieldwork was conducted between September and December 2004.

About Accenture
Accenture is a global management consulting, technology services and outsourcing company. Committed to delivering innovation, Accenture collaborates with its clients to help them become high-performance businesses and governments. With deep industry and business process expertise, broad global resources and a proven track record, Accenture can mobilize the right people, skills and technologies to help clients improve their performance. With more than 100,000 people in 48 countries, the company generated net revenues of US$13.67 billion for the fiscal year ended Aug. 31, 2004. Its home page is