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Business leaders show optimism for 2025 with plans for investment in innovation, efficiency, and resilience

Business leaders are optimistic for 2025, focusing on innovation, efficiency, and sustainability, while navigating uncertainty with increased investments.

Business leaders are feeling increasingly optimistic about their organisations’ prospects in 2025, despite ongoing market uncertainties. A new report from the Capgemini Research Institute, titled “Navigating uncertainty with confidence โ€“ Investment priorities for 2025“, highlights a positive shift in sentiment, with 62% of executives expressing optimism about their organisationโ€™s future, up from 56% last year.

The report reveals that companies are prioritising investments in innovation, efficiency, and resilience, aiming to adapt to challenges while strengthening their competitiveness in the global market.

Confidence grows despite cost reduction focus

The report shows that while business leaders feel more confident about their own organisations, they remain cautious about the global market. Only 37% of executives expressed optimism about the global operating environment for the next 12โ€“18 months, reflecting modest improvement from last year.

In 2025, cost reduction will take precedence for 56% of organisations, outweighing revenue growth. However, achieving cost efficiency requires strategic investment. Half of the surveyed organisations plan to increase their overall spending, with just under 25% expecting lower investment compared to 2024.

Capgemini CEO Aiman Ezzat stated, โ€œAs we look to 2025, business leaders are navigating uncertainty with an attitude of confidence and resilience โ€“ two qualities that our research shows they are looking to instil in their organisations through technology investment. Technology has a key role to play to improve competitiveness and productivity, while reducing costs and making all-important efficiency gains.โ€

Focus on innovation, customer experience, and supply chains

Organisations are doubling down on customer experience and innovation as key investment areas. Nearly 80% of executives plan to increase spending on customer experience, and 75% are focusing on engineering, research, and development (R&D).

The most significant growth in investment is directed towards supply chain transformation. Approximately 63% of leaders intend to boost supply chain spending in 2025, up from less than 50% in 2024. New-generation supply chains integrating artificial intelligence (AI) and the Internet of Things (IoT) aim to enhance decision-making, reduce waste, and improve sustainability.

Additionally, concerns over tariffs and trade disputes are driving efforts to de-risk supply chains. Nearly 70% of executives are worried about rising tariffs and trade disputes, prompting 74% to diversify their sourcing strategies and invest in emerging markets. Friendshoringโ€”sourcing goods from politically aligned countriesโ€”will play a significant role, with 64% of executives incorporating it into their strategies for 2025.

Sustainability and climate tech remain key priorities

Sustainability investments are on the rise, with 62% of executives planning to increase their budgets by an average of 10.5%. Climate tech tops the list, with 72% prioritising areas like hydrogen, renewables, batteries, and carbon capture. Batteries are especially favoured, ranking in the top three investments for over half of business leaders, particularly in manufacturing and automotive industries. Solar energy also remains a key area of focus.

Other sustainability priorities include sustainable R&D, biodiversity protection, and water conservation, reflecting the growing importance of environmental responsibility as both a compliance measure and a competitive advantage.

AI investment accelerates, led by the US

AI and generative AI continue to drive technology investments, with nearly 75% of executives ranking these technologies among their top priorities for 2025. The United States leads this trend, with 84% of its business leaders prioritising tech investments to maintain a competitive edge, compared to 64% in Europe.

US organisations are also expected to surpass their peers globally in tech spending, leveraging AI advancements to enhance productivity, innovation, and customer engagement. As businesses navigate the challenges of 2025, their focus on resilience, innovation, and sustainability positions them to thrive in an uncertain environment.

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