The '2013 State of the European Union' Report
Calls to Action for E.U. Leaders
Abu Dhabi (UAE), Fontainebleau (France), Singapore - June 6, 2013 - European business leaders are impatient about changes to be made in Europe. Yet, they remain optimistic about the European Union's long-term prospects for prosperity and global prominence. This is a core message of the 2013 State of the European Union (E.U.) Report released today by INSEAD, Booz & Company, and the European Executive Council (EEC).
'Business leaders want to move the debate beyond whether budget austerity or growth stimulation will revitalise Europe," says Javier Gimeno, professor of strategy at INSEAD, the leading global business school. "Nine out of 10 respondents call for targeted actions to improve productivity and competitiveness," added Gimeno, who is academic director of the INSEAD European Competitiveness Initiative, which provides research-based insights into how Europe can bolster the success of its business community and related institutions.
The report, titled 'Growing Europe: The Competitiveness Imperative', reveals that corporate leaders are more pessimistic about Europe than they were last year (61 per cent compared to 52 per cent). And 88 per cent believe that the E.U. urgently needs to implement policies to bridge the European competitiveness gap and raise productivity. However, the good news is that 72 per cent of corporate leaders do believe the E.U. is capable of achieving positive change, and looking ahead to 2030, they say the E.U. will remain one of the top global powers.
'Overall, the mood is one of impatience with a strong call to action: Business is demanding that the E.U. take bold steps to promote economic, political, and social policies that directly address growth," says Per-Ola Karlsson, senior partner at global management consultancy Booz & Company.."There should be no sacred cows. The question is, will European leaders have the courage to act?'
Even with a potential U.K. referendum looming on the political horizon, business leaders do not believe the E.U. will lose member countries. However, they clearly believe tough decisions need to be made.
The report analyses the responses of 1,500 executives both inside and outside of Europe who were asked about the economic, social, and political aspects of the European Union. The report will be presented today at the third annual State of the European Union conference in Brussels.
Corporate leaders strongly believe that the business sector will drive growth. Because of this, they say their voices must be heard by policymakers.
However, this response does not mean applying a 'one size fits all' solution across the continent. 'The E.U. can act as an orchestrator: Countries don't have to sing in unison but the E.U. should entice them to sing in harmony', says Bruno Lanvin, executive director, INSEAD European Competitiveness Initiative. 'Business leaders do not reject the European social model, but favour incentives to work-more flexibility in working hours, pensions, and wages-to help boost growth and reduce unemployment. The data show that in countries where the economy is stronger, business leaders are open to adjusting the European social model if it helps solve the high unemployment and low productivity that is holding Europe back'.
The survey's key findings include:
Economy
- Eighty-two per cent of corporate leaders see a gap between Europe's competitiveness and that of other regions, and 49 per cent believe this gap will increase in the next 10 years.
- Restoring Europe's productivity is the key economic priority of 88 per cent of respondents; the majority believe that growth will be spurred by small and medium-sized businesses, not multinationals or state-owned enterprises.
- Eighty-eight per cent believe the E.U. could do more to represent business on a global stage-for example, by negotiating stronger trade links-but it will have to overcome the perception by non-European business leaders that Europe is a fragmented collection of markets rather than a single bloc.
Society
- Fifty-nine per cent of business leaders remain committed to the core principles of the European social model and favour increased alignment on minimal standards for health, education, and welfare.
- The policies for growth require a rethink of social models, where applicable. For instance, 91 per cent of respondents say the best way to balance budgets and improve productivity is by increasing the economic incentives to work.
- Youth unemployment is a key concern; over 70 per cent of business leaders are looking for tax incentives to hire more young people and investments and subsidies to help in retraining the current workforce.
Technology and Innovation
- Six out of 10 respondents believe the lack of innovation culture is a key obstacle to economic growth and development in Europe. To boost innovation, business leaders favour public-private collaboration and tax incentives for private investment in R&D, given the E.U.'s shrinking budgets.
- Eight out of 10 business leaders are most concerned about the innovation threat from China and are less worried than in previous years about similar competition from India, Japan, and the United States.
Download the full report here:
http://www.insead.edu/home/documents/INSEAD_BOOZ_SoEU_Study2013.pdf
About INSEAD, The Business School for the World
As one of the world's leading and largest graduate business schools, INSEAD brings people, cultures and ideas together to change lives and to transform organisations.
With campuses in Europe (France), Asia (Singapore) and Abu Dhabi, INSEAD's business education and research spans three continents. Our 145 renowned Faculty members from 35 countries inspire more than 1,000 degree participants annually in our MBA, Executive MBA, specialised master's degrees (Master in Finance, Executive Master in Consulting and Coaching for Change) and PhD programmes. In addition, more than 9,500 executives participate in INSEAD's executive education programmes each year.
In North America, INSEAD participates in academic partnerships with the Wharton School; the Kellogg School of Management, and Johns Hopkins University, whilst in Asia, INSEAD partners with Tsinghua University in Beijing and CEIBS (China Europe international Business School). INSEAD is a founding member in the multidisciplinary Sorbonne University created in 2012, and also partners with Fundação Dom Cabral in Brazil.
Around the world and over the decades, INSEAD continues to conduct cutting edge research and to innovate across all our programmes to provide business leaders with the knowledge and sensitivity to operate anywhere. These core values have enabled us to become truly "The Business School for the World."
More information about INSEAD can be found at www.insead.edu
About Booz & Company
Booz & Company is a leading global management consulting firm, helping the world's top businesses, governments, and organizations. Our founder, Edwin Booz, defined the profession when he established the first management consulting firm in 1914. Today, with more than 3,000 people in 60 offices around the world, we bring foresight and knowledge, deep functional expertise, and a practical approach to building capabilities and delivering real impact. We work closely with our clients to create and deliver essential advantage. The independent White Space report ranked Booz & Company #1 among consulting firms for "the best thought leadership" in 2011. For our management magazine strategy+business, visit strategy-business.com. Visit booz.com to learn more about Booz & Company.
About The European Executive Council (EEC)
The European Executive Council (EEC) is an organisation that represents CEOs and top executives who lead and manage the European business of their multinational parent. Started in 2000, the EEC meets quarterly to debate and discuss the challenges and opportunities of doing business in Europe. The topics covered range from sharing best practices about organising and developing business in Europe and effective means of dealing with cross-cultural management, to explaining the specificity of the European markets to non-Europeans, etc. The aim of the EEC is to provide its members with both formal and informal networking opportunities among peers to share ideas and hands-on experience.
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