European businesses find themselves operating in a difficult macroeconomic landscape. Over the last five years, the European economy has grown on average less than two per cent per year. The medium-term outlook is for a modest GDP growth of just 1.4 per cent per year in 2020 and 2021.
But how will businesses continue to thrive and grow? BDO’s research reveals that European businesses still set an ambitious growth agenda, with increased focus on transformation.
BDO undertook research among 215 business leaders based in seven European markets, namely Belgium, Denmark, Germany, Italy, Norway, Spain and the United Kingdom. The research shows that European businesses have significant growth plans, despite the challenges posed by the external operating environment.
Key findings
The key findings confirm that European businesses should be prepared for disruption, which is now a part of life.
Business leaders are expected to navigate new challenges, such as emerging technologies, the future of work agenda, environmental issues and sustainability
BDO’s CEO of the EMEA region, Trond-Morten Lindberg, says: “Business leaders are expected to navigate new challenges, such as emerging technologies, but also the future of work agenda, environmental issues and sustainability. With the depletion of natural resources, unconstrained year-on-year economic growth no longer seems as feasible as previously assumed. And the younger generation – tomorrow’s new talent – in particular, expects to see the sustainability agenda elevated to the board room.”
Unlocking growth: talent, technology innovation
Business leaders are aware of the need to retain a dynamic sense of entrepreneurialism and to respond quickly to new market opportunities. As such, the way businesses aspire to grow has been revolutionised, with talent, technology and product innovation being the three priority areas of investment and transformation that these leaders say will drive their future success.
Mr Lindberg continues: “If talent is a priority area of investment, it is imperative that we clearly understand all generational differences and what the new generation expects from their employers, making every employee, regardless of their age, feel engaged.
“Employees seek purpose and meaning, and the younger generation in particular, will want to see gains in efficiency through digitalisation and technology. Equally, they will expect those gains to be invested in improved work-life balance, in sustainability and climate measures and in ensuring equality.”
Opportunities for transformational change
To execute their ambitious plans for the next five years, the business leaders participating in the survey anticipate making transformational changes to their business processes and internal functions. Fifty-four per cent said that transformational change will be needed within their IT and technology functions. The areas of significant change align with their business priorities, such as achieving growth through digitisation and innovating their product and service offerings.
European business leaders recognise that business as usual will no longer be the winning strategy to achieve their aggressive growth aspirations. Instead, real change is needed to rethink relations with customers, employers and other external partners.
Dare to be bold
Mr Lindberg concludes: “To address the many challenges ahead, a leader must dare to ask bold questions and be prepared to create a culture that encourages others to ask similarly bold questions both inside and outside the board room. He or she must consciously activate different stakeholder groups.
“They must approach the younger generation and listen to their unbiased thoughts and suggestions. Taking note of the fresh ideas from these first true digital natives will undoubtedly lead to interesting debates and bring real added value to the table.”