Competitiveness is not a new challenge for European business. This is especially true when we compare Europe’s growth since the downturn of 2008 to the aggressive growth of the US and China. As noted by our research, from 2000-2019, Europe achieved a real GDP compound annual growth rate of 1.5 percent. In contrast, North America’s growth rate was 2.0 percent. And China’s GDP grew by 9.0 percent. The long-term impacts of COVID-19 have become clearer and we now know that the disruption caused by the pandemic is both a threat and an opportunity. In this state of uncertainty, the biggest risk facing European business leaders is the temptation to stay on the defensive for too long.

We believe Europe—and its leading businesses—have unique strengths. It’s time to build on those strengths. While Europe emerges from the disruption of the pandemic, European business has a chance to close that competitiveness gap and recover at pace. Two-thirds of C-level executives surveyed for our study believe European markets will see a rapid V-shaped recovery or a slow-but-steady U-shaped progress. But to make either a reality, bold leaders must invest in innovation, technology and people to reinvent how Europe does business.

Now is the time to focus on renewal and rebirth

Drawing on our global survey of 478 C-level executives and extensive client experience, we identified three critical priorities: Lead the sustainable revolution; Accelerate digital transformation; and Pursue next generation collaboration. Each priority has two areas of vital business change, and we believe focusing on these areas will enable Europe to close the competitiveness gap with North America and Asia Pacific.

A European path for reinvention

It’s critical that European business leaders move from stabilisation and survival to renewed growth and competitiveness. And there is a unique opportunity today to shrug off old limitations and reconsider new ways of operating. European organisations that take the steps to reinvention outlined below will not only outmanoeuvre the uncertainty of COVID-19 disruption, but also have the chance to close the gap between them and their North American and Asia Pacific competitors.