Business Leaders Optimistic About Recovery in Europe, Research from Accenture Finds
July 07 2020 - 1:59AM
Business Wire
While European companies plan to accelerate
digital transformation, their slower investment in innovation might
not enable them to catch up with U.S. and Chinese businesses
Two-thirds (66%) of business leaders globally are optimistic
that the European market will make a relatively fast recovery from
the economic downturn caused by the COVID-19 pandemic, according to
a new report from Accenture (NYSE: ACN).
The report, entitled “Bold Moves in Tough Times” and based on a
survey of nearly 500 C-level executives in Europe, North America
and Asia-Pacific across 15 industries, found that approximately
three in 10 respondents (29%) expect the recovery in Europe to be
fairly rapid (“V-shaped”), while 37% anticipate a slower, but
steady, “U-shaped” recovery in the next 12 months.
The most optimistic sector is pharmaceuticals/biotech/life
sciences, with 34% of business leaders in that sector expecting an
increased demand in Europe as a result of the pandemic. The
second-most-optimistic sector is communications, media &
entertainment, with 52% of those respondents expecting a V-shaped
recovery in their European markets, followed by insurance, at 47%.
At the other end of the spectrum are the automotive and
airlines/travel/transportation sectors, with only 7% and 12% of
respondents, respectively, expecting a rapid recovery.
The report also reveals that executives expect the German,
Nordic and U.K. economies to rebound the fastest from the downturn,
followed by France, Spain and Italy. In addition, European business
leaders are optimistic regarding Europe’s competitiveness, as four
in 10 respondents (39%) believe that European companies will be
more competitive vis-a-vis their U.S. peers than they were before
the crisis, and even more (43%) believe that European companies
will be more competitive compared with Chinese businesses.
“Confidence is critical in the current economic environment,
which is still volatile and uncertain,” said Jean-Marc Ollagnier,
CEO of Accenture in Europe. “The optimism regarding Europe’s
economic recovery and competitiveness offers European companies a
unique opportunity to reinforce their leadership and close the gap
with their American and Asian competitors. However, this will
depend on how well they translate optimism into bold actions. The
biggest risk is that European business leaders remain over-reliant
on government support, stay on the defensive and underinvest in
game-changing innovations — because their global competition won’t
wait.”
Accenture’s research indicates that there is a risk that
executives in Europe are overly cautious regarding how they prepare
for the rebound, compared with those in North America and
Asia-Pacific. Specifically, European executives appear to be:
- Focusing on incremental rather than game-changing
innovation: More than half (53%) of European respondents said
they are slowing investments in innovation and won’t relaunch any
initiatives in the next six months, compared with 33% of
respondents in North America and 49% in Asia Pacific.
- Underinvesting in the future of business: In Europe,
only about one in seven companies (16%) is already investing in
initiatives to prepare for the rebound, compared with one in four
(25%) in Asia Pacific and one in three (34%) in North America.
- Less likely to collaborate to rebound: Business leaders
in Europe are slightly less likely than those in North America and
Asia-Pacific to collaborate with other companies to mitigate the
impact of the crisis and rebound faster (48% of those in Europe,
compared with 53% in North America and 55% in Asia-Pacific).
“Europe’s business leaders must start reinventing themselves for
the post-COVID-19 world today,” Ollagnier said. “Now is the time to
think and act differently and take balanced risks to build
long-term resiliency and to renew growth models to adapt to what we
call a ‘never normal’ world.”
The report highlights critical areas that European companies
need to focus on to close the competitiveness gap with their North
American and Asian peers. These include:
- Increasing the pace and scope of digital transformation:
Companies that have been the most resilient during the pandemic
have the most-advanced digital capabilities, enabling them to equip
their workforces for remote working, adjust their supply chains and
adapt to new ways of buying — quickly and at a massive scale.
European executives now clearly see the need to turn up the speed
on digital change, as nearly two-thirds (63%) said their companies
will accelerate their digital transformation, including their use
of cloud.
- Creating experiences for increasingly responsible
consumers: Buying habits during the COVID-19 lockdown ― with
consumers making more-responsible purchases and massively shifting
to online channels ― will remain in the post-pandemic world.
Therefore, companies will need to deliver an end-to-end customer
experience — one that brings customers in early, during the
innovation stage, and continues through the sales and service
processes. Nearly two-thirds (62%) of European business leaders in
a group of consumer-related industries1 see opportunities to build
on buying habits that are increasingly driven by social and
environmental criteria.
- Leveraging technology to reinvent the industrial sector:
COVID-19 has triggered debates about the need for businesses to
bring their operations back to their home markets. However,
“re-localization” might not be the panacea for the European
“industrial renaissance.” To build long-term operational
resilience, reinvent their business models and create new revenue
streams, businesses must leverage advanced digital technologies,
such as predictive modelling, digital twins, and edge computing,
among others. With 42% of European respondents in the manufacturing
sector planning to accelerate investment in digital transformation,
compared with just 32% and 30% in North America and Asia,
respectively, there’s an opportunity for European companies to take
the lead in the industrial sector.
“Europe is at a crossroads; its business leaders can continue
down the well-trodden strategic and operational paths, or they can
explore a new way forward, one based on innovation and
high-potential technology that blends with Europe’s traditional
strengths of sustainability, solidarity and purpose,” Ollagnier
said. “Difficult though the COVID-19 pandemic has been, as we
emerge from it the scale and scope of new opportunities —
particularly in the industrial sector and on energy transition
issues — are clear. It’s time for Europe to make bold moves and
seize those opportunities to finally close the competitiveness
gap.”
About the Research
The research is based on a survey of 478 C-suite executives in
15 countries across 15 industries. The survey was conducted in May
2020 and covers companies with annual revenues exceeding US$500
million. Industries represented include: airlines/travel/transport;
automotive; banking; communications/media/entertainment; chemicals;
consumer goods; energy; high tech; industrial goods &
equipment; insurance; pharmaceutical/biotech/life sciences; public
services; retail; software/platforms; and utilities. Countries
represented include Australia, Austria, Belgium, Canada, China,
France, Germany, Italy, Japan, Luxemburg, the Netherlands, Spain,
Switzerland, the United Kingdom and the United States.
About Accenture
Accenture is a leading global professional services company,
providing a broad range of services in strategy and consulting,
interactive, technology and operations, with digital capabilities
across all of these services. We combine unmatched experience and
specialized capabilities across more than 40 industries — powered
by the world’s largest network of Advanced Technology and
Intelligent Operations centers. With 513,000 people serving clients
in more than 120 countries, Accenture brings continuous innovation
to help clients improve their performance and create lasting value
across their enterprises. Visit us at www.accenture.com.
1 Consumer industries: Consumer goods, retail, automotive,
communication, media & entertainment, airline, travel and
transport.
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Francois Luu Accenture +33 1 53 23 68 55
francois.luu@accenture.com
Andy Rowlands Accenture +44 20 8396 3871
andy.rowlands@accenture.com
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