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Accelerating Europe's path to reinvention


In brief

  • Europe's businesses have become more resilient in the face of uncertainty.
  • But they must match North America and Asia on technology-driven growth.
  • European executives agree that accelerated reinvention is needed.


European executives report that just 16.9% of their total global revenues are invested in transformation initiatives. This compares to 18.8% in China and 20% in the US.


of European executives believe in their ability to accelerate growth in an economic downturn.


of European executives believe they would achieve growth goals in 2022.


of European executives believe they’re well-positioned to capture future growth, having overcome the pandemic.

A full view of Europe’s challenges

European executives overwhelmingly agree they’re facing the most testing environment yet. The enduring challenges associated with the war in Ukraine, such as an energy crisis and rising inflation, are most pronounced in Europe. Furthermore, significant government investments to foster innovation and growth, such as the US Inflation Reduction Act of 2022 and investments in green manufacturing in South Korea and Japan, are challenging the competitive position of Europe.

That’s just the start. Business leaders also face rising energy costs due to a high dependency on energy imports; extreme weather events—and associated costs—as a result of climate change; a talent gap as indicated by a low job-vacancy rate; political fragmentation; supply chain and manufacturing disruption; changing consumer behavior; and slower growth as compared to North America and Asia Pacific.

A technology deficit—and an opportunity

European companies are behind in using technology for top-line value creation. Less than half stand above the global average for technology penetration and mastery, and this deficit is hindering their transformation efforts. However, European manufacturing industries—especially aerospace and defense, mobility and life sciences—have made significant investments in technology over the past two years. Although the energy, travel and utilities industries have made the least progress, European executives have hit the gas on implementation over the past two years, particularly across cloud services, AI, automation and security. European companies may be behind in technology-driven growth, but they’re making strides to close the gap.

Chart depicting revenue growths
Chart depicting enterprise dimensions
Chart depicting enterprise dimensions

The solution: Embracing Total Enterprise Reinvention

Total Enterprise Reinvention requires businesses to adopt a deliberate, end-to-end strategy—one that combines new technologies and ways of working for a new performance frontier. It’s an entirely different act requiring continuous reinvention of the entire enterprise: how it grows, how it operates, how it engages its ecosystem and how it creates 360° value for all stakeholders. In fact, European executives feel an even stronger need for Total Enterprise Reinvention than their global peers—and they’re confident they can achieve it. They’re also more eager to embrace a radical reinvention strategy even in the face of recession, and CEOs are more willing to be the key reinvention sponsors.

Signs of optimism

According to Oxford Economics estimates, Eurozone real GDP grew by 3.3% in 2022, well above the summer forecast of 2.7%. Recent economic data, easing headline inflation and reduced risk of winter energy rationing point to a brighter outlook in 2023. Consumers continue to make big purchases, and businesses anticipate increased demand. Additionally, the EU November 2022 unemployment rate of 6.0% is an all-time low for the period 2008-2022, driven by high demand for talent.

Chart depicting technology deficits
Chart depicting technology deficits

The path forward

While European businesses have built extraordinary resilience in recent years, they must now become Reinventors to address the unique structural challenges they face. For them, the journey to reinvention begins by focusing on their strengths in the energy transition and talent while resolving their deficits in technology and customer needs.

1. Build your digital core quickly to enable business model reinvention
Establish a digital foundation using cloud, data and AI to scale new processes, innovations and solutions across the enterprise. This is an ongoing effort to build a platform for reinvention. A digital core is built on a modern, cloud-based infrastructure and security layer that is automated, agile and secure by design. It’s equally important to amplify the power of digital through compressed transformation and use the digital core to scale new innovations that reinvent business and operating models. Apply new technologies—from AI to the metaverse—to drive efficiencies and foster sustainable growth with new products and services.

2. Speed your energy transition
Work across your ecosystem to center the European economy around net-zero and circular principles for global competitiveness. Advocate for strong industry and governmental cooperation, policies and incentives to level the global playing field and fast-track execution while being mindful of people and the planet. Prioritize your transition to clean energy and invest in “carbon intelligence” and ESG reporting, and hold leadership accountable for progress.

3. Align to new customer needs
Implement a life-centric strategy to drive innovation and growth by seeing customers within the context of their full lives. Use a combination of human and machine intelligence to understand customers and their motivations in a holistic and dynamic way. Solve for shifting customer scenarios by abandoning one-size-fits-all offerings for more personalized products and services. Then, simplify marketing operations to drive innovation and efficiency. Use data insights and automation to redesign marketing organizations to break silos, unleash creativity and improve innovation.

4. Take your strengths in talent to the next level
Make talent strategy core to your business strategy by placing people at the center of reinvention. Ensure strong connections and collaboration across the entire C-suite and bring all people along on your reinvention journey. Empower people by breaking down organizational, process and data siloes, and use internal and external data to obtain a deep, granular understanding of current and next-generation skill needs to unearth hidden talent. Most importantly, foster a culture in which people from all levels can contribute to their full potential, supported by a strong sense of belonging and purpose.

Desert nighttime lapse
Desert nighttime lapse

A pivotal moment for a stronger Europe

Europe’s businesses have met unprecedented disruption with rapid change, becoming more resilient and capable of navigating uncertainty. But they continue to face headwinds unique to their region that could put them at a disadvantage. What defines them today? They see turbulent times as an opportunity for radical transformation.

In recent years, European businesses and policy makers have united around a common purpose to improve competitiveness, address global challenges and reach a new performance frontier. Now is the time to accelerate together, reshaping not only their organizations but also their industries and communities. And to build on their strengths in the energy transition and commit to technology-driven growth with a deliberate and continuous strategy of Total Enterprise Reinvention.


Jean-Marc Ollagnier

CEO – Europe

Michael Brueckner

Lead – Strategy, EMEA

Prof. Dr. Svenja Falk

Managing Director – Research, EMEA