European businesses find themselves facing a growing number of challenges. Over the last 5 years, the European economy has grown on average less than 2% per year and the medium-term outlook is a modest GDP growth of just 1.4% per year in 2020 and 2021.
How do businesses intend to maintain their growth and market position in today’s fast-changing political, (macro)economic and social world? BDO Global ran a Europe-wide survey, revealing that European businesses still set an ambitious growth agenda, with increased focus on transformation.
% of the European business leaders surveyed say transformational change is needed to drive their growth strategy
5 key challenges
European business should be prepared for disruption – which is now a part of life
Aggressive growth is on the agenda
More than a third (35%) of European business are seeking aggressive growth in revenue and market share to attain a leadership position in their market. These aspirational businesses will be an important engine for economic growth in Europe, as small and medium-sized enterprises are the backbone of Europe's economy. They represent 99% of all business in the EU.
Growth realised through strategic investment
Our research shows a revolution is underway in how businesses will generate growth: talent, technology and product innovation are the three priority areas of investment.
Global expansion anticipated
Businesses are increasingly worried about the external operating environment and, in particular, sluggish growth within domestic markets. They are looking to offset these slowdowns - and the likely impact of Brexit on cross-border trade - by securing more trading opportunities outside European markets.
Preparedness to address critical risks
A quarter (26%) of European businesses say they feel underprepared to address critical business challenges such as cyber security. Keeping pace with new technologies is a concern raised by a further 20% of leaders in our survey. Despite their growth mindset, our survey shows that business leaders are less confident in their ability to keep pace with change.
Company leaders are taking green action seriously
As environmental concerns rise up the agenda, our survey reveals businesses are taking significant action to address environmental sustainability within their business. They are acting in response to tighter regulation as well as to pressure from customers and employees to translate words into a concrete green action plan.
About the study
BDO’s aim in publishing this report is to equip businesses and their leadership teams with practical and relevant insights into the issues that will be top of their agenda over the next five years. BDO leaders across our European firms have reflected on the views of the 215 business leaders from 7 countries, Belgium, Denmark, Germany, Italy, Norway, Spain and the United Kingdom, who participated in our survey and, drawing on their market experience, they provide their commentary, perspectives and advice, including key takeaways.
Dare to be bold. Be prepared to change your mind, in step with geopolitics, technology and talent.Trond-Morten LindbergCEO EMEA BDO Global