Lack of tech-leadership 'hindering' European transformation efforts

18 January 2023 2 min. read
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The majority of large companies across the world’s largest economies are confident in their ability to innovate and adapt, as they look to survive the recession. However, European business leaders are less adept at deploying technology towards adding value, a new study has found.

Despite the deepening downturn, a new poll of 2,000 of the largest companies in Europe, the US and China has found that businesses across all three remain convinced of their ability to succeed. Researchers from Accenture discovered that 81% of respondents believe they are well-positioned to capture economic growth, after overcoming pandemic headwinds – and a further 77% therefore believe in their ability to accelerate growth, even as the economy remains in recession.

However, with challenges associated with the war in Ukraine, such as the energy crisis and rising inflation, the challenges facing Europe’s economy are the most pronounced in the world. Interventions, such as the US Inflation Reduction Act of 2022 and Asia Pacific’s investments in green manufacturing, pose further competitive threats.

Accenture Business Strengths Survey, 2022

In this context, it might worry some European experts that businesses in the continent seem less prepared to make the most of technology in the coming years. European businesses lag behind US and China based businesses when it comes to the use of emergent technologies in particular.

When it comes to finding use cases for things like the metaverse, Accenture gives Europe’s businesses a weighted ‘strength’ score of 4.03 – and while that is still positive, it is behind China, on 4.14, and the US on 4.20. Similarly, Europe is less prepared to shift to technology-driven business models, or to enable digital-savvy leadership, which can get the most from new strategies – an area where China has the leadership position.

Accenture suggests that as a whole, European companies are behind in using technology for top-line value creation, with fewer than half of its entities standing above the global average for technology penetration and mastery.   The researchers suggest that this deficit is “hindering their transformation efforts”, with only 16% of European executives likely to assess available technology as a significant enabler in executing transformation programmes – behind the global average of 21%, or regional highs of 22% in North America and 25% Asia Pacific.

Speaking on the findings, Jean-Marc Ollagnier, CEO of Accenture for Europe, stated, “The resilience business leaders have demonstrated could explain their confidence in navigating current headwinds, including an energy crisis that is hitting Europe particularly hard. However, what is at stake for European companies is their competitiveness over the long term. The increasingly volatile macroeconomic environment, combined with the pace of technological innovation and the need to accelerate the energy transition, requires companies to engage in a deliberate strategy to continuously reinvent their business. It is through a Total Enterprise Reinvention that European companies can increase competitiveness and thrive over the long term.”