The Capgemini Research Institute’s new report, Navigating uncertainty with confidence – Investment priorities for 2025, published today, suggests that, in a context of ongoing uncertainty in the market environment, business leaders feel more positive about their organisation’s outlook.

In spite of a cost containment imperative, this optimism is driving increased investment, notably in customer experience, supply chains, and sustainability, to enable more innovation, efficiency, competitiveness and resilience-building.

The report finds business leaders feeling more confident about the year ahead than they were 12 months ago – 62% are optimistic about their organisation’s prospects for 2025, up 6% on the same time last year and 20% since 2023.

However, executives have more confidence in their own organisations than the global market at large, with 37% optimistic about the prospects for the global operating environment in the next 12-18 months, only slightly up on last year.

In the current uncertain market environment, 56% expect to prioritise cost reduction over revenue growth for 2025. However, executives realise that this change requires investment – half say that their organisation plans to increase overall investment in 2025, with just under a quarter anticipating lower levels of investment compared to 2024, and the rest expecting no change.

Focus on Customer Experience, Innovation, and Smarter Supply Chains

Much of business leaders’ confidence continues to focus on customer experience, followed by engineering, R&D, and innovation – with nearly 8 in 10 and nearly three quarters of executives now planning to increase investment in these areas, respectively.

However, the sharpest acceleration in investment is focused on supply chain transformation, where 63% say they will increase their spend in 2025 – up from less than half in 2024 – and by 9.4% on average. According to the report, new-generation supply chains will integrate AI and IoT to enhance efficiency, reduce waste, and support a business’s sustainability goals, as well as improve decision-making and reduce costs overall.

De-risking Supply Chains

Globally, seven in 10 executives are concerned about the impact of rising tariffs and bilateral trade disputes on their organisation’s competitiveness.

Almost two thirds are also concerned about the impact of a potential global trade war on their organisation’s operations and market access.

On that front, executives in Japan and China are the most concerned about rising tariffs and bilateral trade disputes, and the least about a potential global trade war.

To mitigate these risks and build resilience, the report claims that most organisations globally are diversifying their sourcing and/or friendshoring (supply chain networks that are focused on countries regarded as political and economic allies).

Almost three in four executives are already de-risking their supply chains by investing in other emerging countries to reduce reliance on China, up from less than half last year. In parallel, almost two thirds of them now confirm that friendshoring will represent a significant part of their organisation’s sourcing and production strategies in 2025 (up from 45% last year).

Climate Tech Leads Investment Priorities in Sustainability

In a context where sustainability investment is more and more seen as a business value driver as well as an asset for compliance and efficiency, and increasingly impacted by geopolitics, 62% of executives (up 10% from 2024) are planning to increase their sustainability budgets, by 10.5% on average.

The priority areas are climate tech (72% of executives planning to spend more), including hydrogen, renewables, batteries, nuclear, and carbon capture. Batteries are seen as the top climate tech investment in 2025, with over half of business leaders ranking them in their top three, in particular manufacturers and automotive companies – followed by solar energy.

Besides climate tech, the other top areas of increased investment in sustainability are sustainable R&D and product development, biodiversity protection and restoration, and water conservation/management.

AI and Generative AI Drive the Acceleration of Tech Investments

Globally, US organisations are expected to outpace their peers in terms of tech investments in 2025.

Besides, US business leaders are also more likely to feel they should invest more to be competitive (84%) compared to their European counterparts (64%). In terms of technology investments, nearly three in four executives ranked AI/generative AI in their top three priority technologies in 2025 – and again, even more so in the US.

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“As we look to 2025, business leaders are navigating uncertainty with an attitude of confidence and resilience – two qualities that our research shows they are looking to instill in their organisations through technology investment,” said Aiman Ezzat, chief executive officer at Capgemini.

“Technology has a key role to play to improve competitiveness and productivity, while reducing costs and making all-important efficiency gains.

“With a focus on innovation, supply chains and sustainability – which is increasingly being harnessed for its value-driving potential – leaders will set themselves up to succeed in an uncertain environment and build resilient, adaptable organisations. Crucially, this will help shape a more innovative, sustainable and inclusive global economy.”