People and technology:
At the forefront of European leaders' recovery agenda
HLB Survey of Business Leaders 2021 - Europe outlook
Risk-averse, but recovery ready
The pandemic still persists atop European leaders’ agendas. 81% named the ongoing consequences of COVID-19 as the main risk for their business in 2021. Uneven success with the virus containment across countries, manufacturing stop-starts, and repercussions around Brexit understandably made Europeans wary of the economic climate both within the region and globally. Admirably, local leaders managed to find a strong footing amidst the challenging (and constantly changing) operating conditions.
European leaders are focused on improving operational efficiency, further enhancing their digital collaboration abilities, and carrying on with the adoption of emerging technologies. Tempered in their plans and actions, but fairly tech-savvy European leaders are realigning their business to benefit from the newly emerged digital opportunities, as well as the “green” agenda.
Over the past 12 months, European leaders have faced disruption at multiple fronts: trade routes, supply chains, and talent pipelines were badly battered. To recoup and regroup for the new growth cycle, the majority is committed to improving operational efficiencies — the number one priority in 2021 — and further cost containment. Thanks to the adoption of digital tools and rigorous process optimisation, European businesses indeed have become leaner and some even managed to accumulate the much-needed cash reserves.
With the cost of borrowing approaching historic lows, local leaders will soon need to switch to more proactive actions. During the next 12 months, 45% of European leaders are committed to building organic growth this year and another 39% plan to launch new products and services. With the market conditions gradually improving and consumer spending climbing up to the pre-pandemic levels, the momentum for growth is close. However, to be among the frontrunners when the markets restart, European leaders will need to fill in the gaps in talent. Despite overall high unemployment rates in the region, 28% recognise their weakness in talent acquisition.
Businesses in Europe started transitioning to agile, resource-light, and digital-enabled operational models pre-pandemic. Earlier investments in connectivity, digital collaboration tools, and cloud technology have helped European leaders to maintain a high level of continuity during the strict lockdowns. Still, “cloud” remains among the most important technologies for 44% of European leaders in 2021. Though they are planning to invest in a wider range of emerging technologies.
Robotic Process Automation (RPA), AI, IoT, and Machine Learning (ML) are among the top-ranked emerging tech solutions, viewed as strategically important by European leaders. Strong technical acumen, access to the latest scientific research, and deep-rooted experience in design-based industrial manufacturing also make Europeans more confident in their ability to innovate. Only 18% name this area as a weakness compared to 24% of global respondents and 36% of respondents from the APAC region.
The economic and social ramifications of the pandemic remain significant for all states in Europe. Yet, despite a very challenging year, 90% of local leaders express confidence in their ability to successfully steer the business in a new direction post-COVID-19. From operational transformations to new technology acquisitions and process optimisations, Europe’s leaders are strongly committed to pivoting out of this crisis.
European leaders are more committed to building organic growth than global peers and are less constrained by weaknesses in digital capabilities, innovation, and customer acumen. Soundly, they are also seeing the current crisis as an opportunity to make important structural improvements to their businesses. 93% agreed that employee physical and mental wellbeing is a top priority for their company’s HR departments. Also, nearly three-quarters of leaders see the recovery process as an opportunity to better position their business for profiting from the low-carbon economy.