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According to the most current data from Eurostat and other respected sources, the European economy continues to struggle to recover from the most recent financial and economic crisis.
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To identify current and future industry trends in Europe, as well as the actions needed to seize the opportunity of the New Industrial Revolution and strengthen the competitiveness of the European economy, we commissioned a survey of more than 500 decision makers across Europe.
View the Videos tab for additional findings from the European Business Summit: Unlocking Industrial Opportunities.
The report highlights three waves of change that pose threats, but which European decision makers could turn into growth opportunities.
Technology InnovationWhile survey respondents unanimously recognize the importance of technology innovation for the future competitiveness of European industry, more than two thirds (71 percent) believe that China will be level with or ahead of Europe in technology innovation in ten years’ time—including 55 percent who believe China will be ahead. The top three demands for action are reduced taxation for R&D, higher public investment in R&D and technology, and improved conditions for the financial sector to back innovation.
Energy EfficiencyFifty eight percent of decision makers responding to the survey are pessimistic that Europe’s industry will be cost effective in energy compared to other main markets in three years’ time. Nine out of 10 respondents say it is important or critical that Europe reduces its energy import dependence to allow for industrial growth. The two main actions identified to address energy challenges are improved energy efficiency and the development of renewable technologies. This suggests that decision makers do not see a contradiction between the need to remain competitive with other countries in the short term while investing in a low carbon economy in the longer run.
Changing ConsumerSurvey respondents identify changing patterns of consumption as having the most significant disruptive impact on European industry (71 percent of respondents). Yet they are optimistic they can tackle the challenge. The majority (55 percent) think that European industry is ready to address these changes in the European market, rising to 60 percent who think it is ready to do so in emerging markets.
There is no question that European industry is suffering in 2013. Manufacturing output is declining once again, and unemployment continues to rise—signaling “a slow, grinding contraction, with few signs of stabilization.”
However, executives are optimistic there are answers to Europe’s challenges. Half of the executives polled believe Europe’s economic crisis has inflicted only temporary damage on European industry, and that Europe will swiftly recapture its previous levels of competitiveness. Nearly two-thirds are confident Europe’s industrial sector remains competitive internationally.
As executives and policy makers seek to reverse course and restore Europe’s industrial competitiveness, European businesses should look for ways to capitalize on the three waves of growth opportunities that are rippling across the global economy: changing consumer behaviour, energy cost and energy challenges, and technology innovation and advanced manufacturing.
Two important enablers are key to capitalizing on those opportunities: the workforce and finance. Businesses and governments must take action to help companies not only develop and strengthen the skills that are critical to competitive advantage, but also address shortcomings in current financial regulations to unleash business investment in growth-generating initiatives.
Finally, it is critical to recognize the diversity of the European economies and to tailor these responses to the unique conditions and needs of individual countries.
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May 15, 2013
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