CEO briefing 2014 the business agenda for europe

CEO Briefing 2014
The Business Agenda for Europe:
Growth in a Digital World

Written by:


2

Foreword

Foreword

Jo Deblaere
Chief Operating Officer
and Group Chief Executive –
Accenture, Europe

Business confidence is returning globally
and many leaders are more optimistic
about the outlook for their organisations,
expressing bold ambitions for growth.
While the European Union (EU) is slowly
recovering from the recession, the
impact of the euro zone crisis is still
evident in the continually growing gap in
competitiveness with other major global
economies. Countries such as the United
States and China have increased their
investment in new digital technologies and
innovation as a means to drive growth,

while adoption in the major EU economies
is lagging as these executives remain less
convinced about digital and the impact it
can have on their business.
With the impact of traditional levers
such as fiscal and monetary policy
currently limited, the EU finds itself in
a unique set of circumstances in which
digital presents itself as a powerful lever
which can be effectively used to bridge
the ever-widening competitiveness gap.
Digital technologies are enabling
organisations to transform the way
they do business, with opportunities
to enhance their efficiency, create
new ways of interacting with their
customers and reduce the time from
product design to market launch.

Accenture believes that enthusiastic
adoption of digital technologies will make
it possible for Europe to return to higher
economic growth and reduce this widening
global competitiveness gap. With its high
penetration rates across Broadband, Mobile
and smartphones as well as eGovernment
services, the EU is in a good position
to exploit its strong performance in
the adoption of technology. In order to
succeed in rebuilding competitiveness in

both the short and long term however,
Europe’s business and policy makers must
take urgent steps to convert its strong
digital potential into higher levels of
productivity, innovation and growth.
The EU can become a leader in a new era
of digital business. The time to act is now.


CEO Briefing 2014 | The Business Agenda for Europe: Growth in a Digital World

3

Introduction
While the economic outlook has been
more positive in recent months, the
European Union has yet to see a genuine,
positive shift in the competitiveness of
its economies. In order to stop the gap
in European competitiveness growing
and potentially gain ground, business
leaders and policy makers will need to
urgently address the two critical areas
of productivity and innovation.

Mauro Macchi
Senior Managing Director –
Accenture Strategy, Europe,
Africa, Middle East and
Latin America

Europe is home to 14 of the world’s 50
largest companies. The region has a strong
corporate base with significant capacity
for innovation and advanced technology
infrastructures. It also boasts a significant
number of entrepreneurs and young
businesses as well as a sophisticated
consumer base, that tend to be experienced
with and receptive to the use of a wide
variety of technologies in their daily lives.
The potential impact of digital technologies
on businesses and industries across the
EU is hard to overstate. These disruptive
technologies are breaking down industry
boundaries and requiring organisations
to reinvent themselves by developing or
adapting to new business models. They are
also fundamentally changing the behaviour
of citizens and consumers, who exhibit
a seemingly boundless appetite for all
things digital. If embraced enthusiastically,
digital technologies will enable new
business outcomes, multi-channel
customer experiences, digital customer
interactions, digital sales, and digital
channel distribution options.

EU companies also have ambitious overseas
investment strategies for growth through

the sale of new products and services to
new customers – particularly in non-BRIC
rapidly growing emerging markets. Despite
this, the majority of EU executives confirm
their digital investments are primarily
focused on increasing productivity and
internal efficiency to reduce costs.
While cost is a necessary focus, executives
may need to rebalance their investment
to better support their ambitious growth
plans. This will enable companies to
generate new levels of innovation and
growth to better serve customers and
consumers that demand new products,
services, and better experiences. Investment
in people and organisational structure is
also necessary in order to fully capitalise
on implementation of new technologies.
The steps needed to close Europe’s
competitiveness gap with their global
counterparts will require a significant
and concerted effort from business and
government if Europe wants to replicate
its historic success as the driving force
of industrialisation and become a leader
in the new era of the digital business.
It’s time to seize the opportunity.


4

The business landscape for Europe

The business landscape
for Europe
As executives within the European Union (EU)
evaluate the business landscape and shape their
strategies regarding the year ahead, their optimism
for the world’s economic prospects is more muted
than that of their global peers according to a
survey conducted by The Economist Intelligence
Unit (EIU) for Accenture’s CEO Briefing 2014.
Furthermore, their enthusiasm for the
capabilities of digital technologies is
decidedly less pronounced than that of
C-suite executives outside the EU. These
two preoccupations may be interrelated
as productivity growth in the EU languishes
behind other major economies. The need
to innovate and improve competitiveness
is clear, but so far, this challenge has not
been met with the urgency it deserves.
Within the five largest EU economies
– Germany, UK, France, Italy and Spain –
a wide diversity of views prevails. While
44 percent of executives globally are
bullish on the world’s economic outlook,
this rises to 48 percent among those
from the UK but falls among those from
Germany (30 percent), and France and

Italy (both 31 percent), where optimism
is decidedly weaker.1
For Italy, Luigi Ferraris, CFO at Enel
Group, the European energy utility, sees
improvement from the country’s poor GDP
performance in 2013 and signs of a rise
in the employment rate. However, for now
he predicts continued challenges for the
economy. “Poor competitiveness, labour
market rigidity and tight credit conditions
will continue to affect the economic outlook
at least in the short term,” he says.

Meanwhile, 70 percent of executives based
in Spain are optimistic about prospects in
their home market in the next 12 months,
compared with only just over half of those
based in France (52 percent) and Italy (51
percent).2 This is perhaps surprising, given
the continued impact of the economic crisis
on the Spanish market. However, some
leading executives see southern Europe’s
prospects improving, as does Franck Cohen,
President for Europe, the Middle East and
Africa. “Last year, South Europe grew by
double digits for SAP,” he says. “That’s a
clear indication that people are investing.”
This is in line with analysis from the EIU,
which sees subdued growth for Spain in
the medium term, but signs of increased

competitiveness as private consumption and
gross fixed investment turn more positive.
When it comes to the outlook for profitability
in their own companies, German executives
are more confident than most – despite
their caution on prospects for global
economic growth – with 82 percent
expecting increased profits over the next
year, compared with 71 percent among
their global peers.3
This is reflected in EIU forecasts, which
recognise Germany’s economy as more
resilient than those in the wider eurozone,

with a modest increase in GDP and a
gradual firming of underlying demand
after a weaker 2013. This upbeat view
on profitability is also shared among
executives from the UK (85 percent),
who see increased profits in the coming
12 months.4 Steve Morriss, CEO of
European operations at AECOM, a provider
of professional technical and management
support services to sectors ranging from
energy to construction, is amongst those
who see the UK’s outlook improving. “In
our business, we see some of the earliest
indicators for the return of confidence in
private developments in building,” he says.
“And there’s no doubt that’s really

picking up in the UK.”
The consensus view among executives
across these five countries is that
manufacturing, energy and healthcare are
likely to perform well in the coming year.
However, there are some nuanced surprises
with the automotive sector in France
showing remarkable confidence.
Consumer goods features prominently
in the UK while the construction and
real estate sector is frequently cited by
executives based in Germany.5


CEO Briefing 2014 | The Business Agenda for Europe: Growth in a Digital World

Figure 1: Q1 – In the next 12 months, to what extent are you optimistic or pessimistic
about the prospects for the following. Percentage optimistic about the next 12 months:
China

59%

US

62%

Spain

70%

42%

Italy

51%

31%

France
UK

69%

30%

Global
average

72%
70%

On the global economy

77%

On the country where
they are based
On their own organisation's
prospects

76%

63%

48%

Germany

78%

69%

52%

31%

89%

76%

76%

62%

44%

80%

0%

100%

Figure 1 source: Accenture, “CEO Briefing 2014 | The Global Agenda: Competing in a Digital World.”
See: />
Figure 2: Q4 – Thinking about your organisation in the next 12 months, do you expect the following
to increase, decrease or stay the same? Expectations of profit growth in next 12 months:
China

93%

US

71%

Spain

64%

Italy

58%

France

63%

UK

85%

Germany

82%

Global
average

71%

0%

100%

Figure 2 source: Accenture, “CEO Briefing 2014 | The Global Agenda: Competing in a Digital World.”
See: />
1

2

3

4

Figure 1: Q1
Figure 2: Q4
5
Appendix: Q2

Figure 1: Q1
Figure 2: Q4

5


6

An ambitious push for growth

An ambitious push
for growth
As EU companies emerge from the economic
malaise of recent years, cost cutting remains
on the agenda but the emphasis has changed.
Germany-based executives expect a year
of increased reductions in costs but
also see a period of workforce increases
ahead - a difficult combination.6
But while cost reductions are still being
implemented across major markets in the EU,
the positioning is far more optimistic than in
recent years. “Cost-cutting is not our focus,”
says Mr Morriss. “A couple of years ago, we
got our business into a position where it was
able to make money in a depressed economy.
But while you’re always looking for the
odd efficiency here and there, we are
absolutely in growth mode.”
Mr Cohen sees this approach being adopted
broadly across the region. “My sense in
western Europe is that people have been

cutting costs for the past seven or eight
years,” he says. “Now they are in a different
mode – and they have to innovate to
develop their business.”
Amongst the EU countries, the UK
and Germany stand out for their more
ambitious growth strategies. While globally
36 percent of respondents are aiming
to sell new products or services to new
customers, in their home markets with
similar proportions in France, Italy and
Spain, this rises to 50 percent amongst

UK-based executives and to 53 percent for
those based in Germany.7 When it comes
to export markets this difference becomes
even more pronounced. For example, the
proportion of executives aiming to grow
by selling new products to new customers
in overseas mature markets is 72 percent
amongst German-based executives, and
63 percent among UK-based executives
(compared with a 47 percent global average).8
Companies are also looking to invest where
they see prospects for growth – and for
many, that means focusing on emerging
markets. “Emerging markets will continue
their economic growth cycle, although
some of them have been affected by a
swift contraction in foreign funds and sharp

currency depreciation,” says Mr Ferraris.
He also sees the recovery in mature
markets benefiting emerging economies.
Among EU respondents, Germany-based
executives are more positive than their
global peers 9 and (along with UK-based
executives) have the most ambitious overseas
investment strategies, particularly in
non-BRIC (Brazil, Russia, India and China)
rapidly growing emerging markets.


CEO Briefing  2014 | The Business Agenda for Europe: Growth in a Digital World

7

Figure 3: Q9c – Which of the following strategies will be most important
to driving revenue growth in your company over the next three years?
Outside your home market – Emerging markets growth strategy:
Spain

51%

Italy

18%

47%

25%

France

61%

UK

21%

10%

18%

25%

74%

Germany

6%

16%

82%

Global
average
0%

10%

9%

54%

10%

20%

30%

17%

40%

50%

60%

15%

70%

Selling new products/
services to new customers
Selling existing products/
services to new customers

80%

Selling new products/
services to existing customers
Selling existing products/
services to existing customers

8%

6%

4%

5%

4%

14%

90% 100%

Figure 3 source: Accenture, “CEO Briefing 2014 | The Global Agenda: Competing in a Digital World.”
See: />Fully 82 percent of Germany-based
executives say they plan to shift their focus
from BRIC countries towards other, more
rapidly growing emerging markets, as do
74 percent of UK-based executives.10
Similarly, when it comes to their strategies
in emerging markets, executives in Germany
(82 percent) the UK (74 percent) emerge as
the most ambitious in saying that selling
new products and services to new customers

is their strategy (versus 54 percent overall).11
For SAP, this strategy reflects demand from
young companies that are developing rapidly.
“Companies in emerging markets need the
whole enchilada of the software we are
selling because they have nothing today,”
explains Mr Cohen. “European companies
are equipped in basic functionality and
are buying advanced products.”

6

7

8

9

Figure 2: Q4
A
 ppendix, Q9b
10
Appendix, Q7b
12
Appendix, Q7e

Appendix, Q9a,
A
 ppendix, Q6a,
11

Figure 3: Q9c,

For western European companies to
compete in emerging markets, Mr Cohen
argues that they need to be prepared to
innovate. “They can’t outspend the guys in
Asia,” he says. “So they have to outsmart
them with innovation.”
More than most, Germany, the UK
and Italy are responding to this need.
Executives in these countries see research
and development (R&D) investments as
a critical part of their strategies. While
overall, 80 percent of all executives
surveyed are increasing their R&D
investment in the coming year, this rises
to 96 percent amongst Germany-based
executives, 94 percent among
Italy-based executives and 90 percent
among UK-based executives.12

For Enel Group, investment strategies
are shaped according to market demands
and the pace of growth in each region.
In mature markets, this means maximising
cash flow, optimising the distribution
network management, cutting costs and
adding value through investments in
smart grid technology.
By contrast, in emerging markets, the

company plans to capitalise on population
growth and urbanisation, as well as the
expansion of access to electricity services
and the development of traditional thermal
generation as well as renewables. “The
growth in emerging markets will be mainly
seized through an increase in renewable
capacity, in addition to conventional
generation capacity in areas such as
Latin America, to satisfy those countries’
fast-growing electricity needs,” says
Mr Ferraris.


8

Too hesitant to embrace technology change

Too hesitant to embrace
technology change
Despite the need to innovate to avoid losing
further competitiveness, responses from
executives in the UK, Germany, Italy, France and
Spain indicate that EU countries are lagging
behind the global norm when it comes to the
importance placed on digital technologies.
While most respondents see “significant
change” as a result of advances in digital
technologies (particularly in the UK,
where 61 percent of executives agree),

amongst the five largest EU markets, only
France-based executives (and just 11 percent
of them) see digital technologies as having
a “transformational” effect on business.13
This is surprising, given that these
executives are based in mature markets
that need to compete on quality and
innovation. It also contrasts with the
emphasis executives in Germany, the
UK and Italy place on R&D investments.
Although R&D is clearly on the agenda,
many companies are less likely to emphasise
information technologies to improve their
competitive position than their Asian
or North American peers.
For Mr Cohen, however, technology is a
powerful force for disruption. “It’s going
to affect the vast majority of industries,”
he says. “For some of them, the changes are
dramatic, especially in the media, telecoms
and music, but others, like more traditional
consumer products companies, will also
have to reinvent themselves.”

Even for industries that remain rooted
in the physical – such as infrastructure,
architecture and construction – digital
technologies are bringing about dramatic
operational changes.
“The design and construction phases are

being transformed,” says Mr Morriss.
“People are talking about building
information modelling in terms of 3D, 4D,
5D, 6D as they start to describe overlay of
cost and construction sequencing – and
that will be a significant improvement.”
For the energy sector, technology is
permitting an increased focus on the
customer and a decentralisation of energy
production. “These changes are expected
to have on the energy sector the same
disruptive consequences that the internet
had on telecommunications,” says Mr
Ferraris. “If this materialises, digital could
represent one of the most important
key success factors, and could lead to
integration between digital systems and
the power system.”


CEO Briefing 2014 | The Business Agenda for Europe: Growth in a Digital World

Not all companies appear to acknowledge
these advances. In fact, both Germanyand France-based respondents lag behind
the global averages in the importance
they attach to digital technologies and
their assessment of what they can do
for their businesses.

Although respondents from Germany,

Italy, Spain and the UK agree with their
global peers that digital technologies
are important for the delivery of new
goods and services, only 27 percent of
France-based executives say this is the
case (the global average is 46 percent).14

This is in line with EIU data which
highlight sluggish growth in the markets
for information and communications
technology (ICT) in France and Germany.
In France, growth rates are forecast to
decline from an already low 0.7 percent
in 2013 to 0.6 percent in 2014. Germany
experienced paltry growth of 0.1 percent
in ICT in 2013, well below the overall
economy’s growth. Compare that with the
US or Canada, both of which experienced
faster ICT growth than their (already
stronger) overall GDP growth rates.

Meanwhile, rather than focusing on the
power of technology to help grow their
business, executives in Germany (70 percent)
and Italy (69 percent) see its main purpose
as increasing efficiency and cutting costs.15
This may be a failure of imagination as
Europe’s companies are less likely consider
the revenue growth potential of these
technologies. While 45 percent of executives

globally see digital technologies as a means
of growing sales, this proportion falls to
33 percent in the EU5 and a mere 25 percent
among Germany-based executives.16

In short, EU executives appear to be
underrating what digital technologies
can do for their businesses compared
with their peers in other regions.
Moreover, they are more likely to see
these investments focus on the promotion
of efficiency. This can overlook a more
transformative approach to harnessing
technology advances.

Figure 4: Q16 – Please select the statement that best describes your
company’s approach to digital business investments (such as cloud computing,
data analytics, machine-to-machine communications, social and mobile).
Primarily focused on process
efficiencies and cost reduction

23%

Spain

47%

Primarily focused on growth
opportunities and new ways
of reaching customers

18%

Italy

69%
33%

France

48%

UK

30%

Germany

26%

Global
average

31%

59%

70%

59%

0%

100%

Figure 4 source: Accenture, “CEO Briefing 2014 | The Global Agenda: Competing in a Digital World.”
See: />
13
15

Appendix, Q15
F igure 4: Q16

14
16

Figure 5: Q17
F igure 5: Q17

9


10 Missing the boat on digital competitiveness

Missing the boat on
digital competitiveness
If many EU executives discount the potential
for technology to help expand their
businesses, some are also down playing
its importance in cementing relationships

with customers. While 61 percent of all
respondents recognise the importance of
digital technologies to improve the customer
experience, in Germany the proportion
is only 49 percent and Italy 51 percent.17
Their peers in the US and in Asia are far
more likely to value these opportunities
to deepen customer connections with
69 percent in the US and 89 percent in
China citing this use of digital technologies.
However, UK-based respondents stand
out for their recognition of the role digital
technology can play to meet new consumer
demands with a majority (70 percent)
highlighting this as a route to improved
customer experience.18 They are also more
likely to recognise the importance of data
analytics to their businesses (65 percent)
than the global average (53 percent)
or their EU5 peers (47 percent).
Mr Cohen believes this approach is critical
if companies are to survive in an era where
customers want to access goods and
services at any time and from anywhere.
“They have to reinvent the customer
experience, and technology today allows
that,” he says. Understanding the uses of
data and connectivity is crucial for many
businesses to maintain their edge.
For Mr Morriss, technology adoption is key

to a company’s competitive advantage.
“We see a real opportunity in our industry,”
he says. “The ability to out compete smaller
competitors by investing in technology
and making the best use of it, is really
important for us.”
Capitalising on new technologies
takes more than financial investments,
however it also investment in people and
organisational structure.

Figure 5: Q17 – How important are investments in digital technologies
(such as cloud computing, E-commerce, data analytics, machine-to-machine
communication, social and mobile) to the following areas of your business?
Recognising digital’s importance for customer experience:
China

89%

US

69%

Spain

60%

Italy

51%

France

54%

UK

70%

Germany

49%

Global
average

61%

0%

100%

Figure 5 source: Accenture, “CEO Briefing 2014 | The Global Agenda: Competing in a
Digital World.” See: />For SAP, changes in technology demand
investments in human resources.
“It requires a lift-and-shift exercise within
the company to move back office-type
of processes into customer-oriented
activities,” says Mr Cohen. “And that
requires a different set of skills.”

In the survey, change management is seen
as one of the biggest challenges to digital
implementation among EU executives, with
large proportions in each country citing
this among their top three challenges
to implementing digital technologies.19
Other important obstacles cited by EU
executives include poor funding, silos
between departments, low customer
demand, skills shortages and a lack of
senior executive support.


CEO Briefing 2014 | The Business Agenda for Europe: Growth in a Digital World

Figure 6: Q14 – How important will the following digital technologies
be for your company in the next 12 months? Cloud computing,
E-commerce, Machine-to-machine communications, Social media,
Mobile and Data analytics.
52%
47%
47%

Spain

52%
40%
49%

Social media

40%
53%

Cloud computing

47%

Italy

44%

Mobile

39%
29%

Machine-to-machine
communications
54%

Data analytics

48%
37%

France

E-commerce

46%
29%
46%
43%
65%
39%

UK

44%
43%
46%
38%
40%
42%

Germany

29%
33%
27%
54%
53%
50%

Global
average

47%
45%

43%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90% 100%

Figure 6 source: Accenture, “CEO Briefing 2014 | The Global Agenda: Competing in a Digital World.”
See: />17
19

F igure 5: Q17
A
 ppendix, Q19

18

F igure 5: Q17

11


12 Conclusion


CEO Briefing  2014 | The Business Agenda for Europe: Growth in a Digital World 13

Conclusion
After a difficult period, EU executives are
looking forward to a year of gradually
accelerating growth and the expansion
of their businesses. As they map out their
plans, they have established more ambitious
overseas investment strategies than
their global peers, particularly in non-BRIC
emerging markets. They also recognise
the importance of continuing to make
investments in research and development.
As advanced, service-based economies,
this is vital for them.
Yet they may be underestimating the
role of technology in meeting their
goals. And crucially respondents in the
EU5 are less likely than their global

peers to focus on digital technologies
as key tools in delivering an improved
customer experience or opening up new
sales channels. Overlooking the revenue
growth opportunities made possible by
advances in digital technology may impede
European companies from achieving their
competitive potential. This may slow the
EU’s overall growth prospects.
Given the battering Europe’s economies
have taken in the wake of the global
financial and subsequent euro crisis, many
companies are more focused on rebuilding
their businesses than on prioritising
investments in cutting-edge technologies.

However, in a world where customers expect
increasingly personalised engagement
and in the face of intensifying competition
in emerging markets, the pressure is on
for companies to adopt a new approach –
one that may lead them to embrace
digital technology, or be left behind.


14 Appendix

Appendix

CEO Briefing 2014 | The Business Agenda for Europe: Growth in a Digital World 15

Real gross domestic product (GDP) (PPP US$ at 2005 prices)*
Data

16,000

Forecast

$US billion

15,000

US

14,000

EU27

13,000

China

12,000
11,000
10,000
9,000
8,000

2011

2012

2013

2014

2015

2016

*Gross domestic product (GDP) at constant market prices, rebased to 2005 constant prices and translated
into US$ using the Local Currency Unit (LCU):$ Purchasing-Power Parity (PPP) exchange rate in 2005.

Source: The Economist Intelligence Unit 2011-2013 data and 2014-2016 forecasts.


16 Appendix

GDP growth: Percentage change in real GDP, over previous year
1.8%
2.3%

Brazil
Russia

2.9%

1.5%

India

4.9%

2014 forecast

6.0%
7.2%

China
US

1.9%

UK

1.9%

2013 data

7.7%

3.0%
2.7%

Spain

0.7%
-0.2%

Italy

0.5%
-1.9%

Germany

0.5%

1.4%

0.8%
0.2%

France
-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

% real change pa
Source: The Economist Intelligence Unit 2013 data and 2014 forecast.

Export growth of goods and services: Percentage change in real
exports of goods and services, over previous year
Brazil

2.5%

3.2%
5.9%

Russia

2.2%

India

11.6%

China

6.4%

0.0

2013 data

1.0%

3.6%

Spain

France

2014 forecast

3.2%

UK

Germany

7.6%

2.8%
2.8%

US

Italy

13.0%

5.6%

2.3%

0.1%

3.3%

0.6%

2.9%

0.6%

2.0

4.0

6.0

8.0

% real change pa
Source: The Economist Intelligence Unit 2013 data and 2014 forecast.

10.0

12.0

14.0


CEO Briefing 2014 | The Business Agenda for Europe: Growth in a Digital World 17

Growth of overall productivity of labour: Growth of real GDP,

at 2005 constant prices, per person employed
1.2%
1.1%

Brazil
Russia

2.6%

1.2%

2014 forecast

4.4%
4.2%

India

US

0.8%

1.4%
1.5%

UK

0.5%
0.4%

Spain
Italy

0%
-0.4%

Germany

-0.1%

1.9%

0.8%

0.8%
0.4%

France
-1.0

2013 data

6.8%
7.4%

China

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

GDP at PPP, per worker, % pa
Source: The Economist Intelligence Unit 2013 data and 2014 forecast.

Recorded unemployment: Harmonized unemployment rate
6.1%
5.4%

Brazil
Russia

4.5%
4.8%

2014 forecast

8.6%
9.0%

India

2013 data

6.3%
6.6%

China

6.5%
7.4%

US

6.8%
7.5%

UK

25.9%
26.4%

Spain
12.5%
12.4%

Italy

Germany

5.2%
5.3%
10.3%
10.4%

France
0.0

5.0

10.0

15.0

20.0

%
Source: The Economist Intelligence Unit 2013 data and 2014 forecast.

25.0

30.0


18 Appendix

Average real wages: Percentage change in hourly wages
in local currency adjusted for inflation, over previous year.

Brazil

1.4%

1.9%

2014 forecast

4.5%
4.0%

Russia

2013 data

-1.2%
-1.7%

India

8.0%
7.7%

China
0.7%
0.7%

US

-0.1%

UK

1.2%

0%
-2.8%

Spain

0.3%
0.2%

Italy

1.2%
1.5%

Germany
0.5%
0.8%

France
-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

% change pa
Source: The Economist Intelligence Unit 2013 data and 2014 forecast.

Access to digital services
41%

UK
Spain
Italy

Individuals ordering goods
or services online

44%

32%
21%
20%

Using online banking

77%

60%

46%

Online access to public services

37%
49%

Germany

56%
60%
59%

France
European
Union
0%
Source: The Economist Intelligence Unit

41%

47%

68%

70%

55%

100%


CEO Briefing 2014 | The Business Agenda for Europe: Growth in a Digital World 19

Access to digital infrastructure
82%
88%

UK
58%

Spain

57%

Italy
Germany
France
European
Union
0%
Source: The Economist Intelligence Unit

70%

98%

69%

98%

42%

87%
50%

82%
58%

100%

77%

97%

99%

95%

100%

Fixed Broadband Coverage
(% of households)
Households with Internet
access (% of households)
Take-up of mobile broadband

(subscriptions per 100 people)


20 Appendix

5

Percentage of
respondents (%)

Brazil

Brazil

5

Russia

Russia

8

India

India

5

China

China

10

US

US

5

UK

UK

5

Spain

Spain

5

Italy

Italy

5

Germany

Germany

5

France

France

100

Global Total

Global Total

Percentage of
respondents (%)

100

5

5

5

5

5

10

5

8

5

5

Question 1

Question 2

1a. In the next 12 months, to what extent are you optimistic
or pessimistic about the prospects for the global economy?

Globally, which industries do you believe enjoy the best growth
prospects in the next 12 months?

Strongly optimistic

12

4

6

4

8

7

20

22

11

26

10

Somewhat optimistic

32

27

24

28

34

41

42

37

38

20

39

Neither optimistic nor pessimistic

41

54

56

51

47

37

27

20

37

34

39

Somewhat Pessimistic

15

15

15

18

11

15

10

20

13

20

14

Strongly pessimistic

1

0

0

0

0

0

1

0

1

0

0

1b. In the next 12 months, to what extent are you optimistic
or pessimistic about the prospects for the economy of the
country where you are based?

Healthcare, pharmaceuticals
and biotechnology

29

31

40

31

28

33

31

22

39

20

14

Financial services

19

6

20

18

17

13

13

18

17

14

17

Telecoms

16

10

13

26

19

11

19

13

13

20

14

Software and IT

18

12

11

22

21

17

30

24

25

12

17

Professional services

12

10

16

10

15

9

8

7

11

14

14

Mining and extractive industries

15

19

18

10

17

17

14

11

17

10

15

Energy, oil and gas

30

39

35

29

30

41

38

16

41

28

21

Consumer goods

26

25

22

24

28

39

30

13

25

16

29

Construction and real estate

24

25

35

14

26

30

21

15

28

14

19

Strongly optimistic

16

6

11

10

25

11

16

35

13

8

23

Aerospace and defence

5

10

2

6

8

7

10

0

3

0

4

Somewhat optimistic

46

46

57

41

45

52

54

42

49

48

44

Utilities

13

10

18

2

23

15

18

9

13

10

12

Neither optimistic nor pessimistic

29

29

32

28

13

30

24

22

30

34

23

Agriculture

8

8

4

14

15

7

7

4

9

10

4

Somewhat Pessimistic

8

15

0

18

13

7

6

2

9

10

10

Manufacturing

30

29

29

22

25

44

26

31

29

36

37

Strongly pessimistic

1

4

0

4

4

0

0

0

0

0

0

Automotive

22

35

33

12

21

15

20

13

20

14

31

Question 4

1c. In the next 12 months, to what extent are you optimistic
or pessimistic about the prospects for your industry?
Strongly optimistic

17

19

9

8

11

11

16

44

13

22

29

Somewhat optimistic

52

50

56

57

60

65

45

47

55

48

41

Neither optimistic nor pessimistic

26

29

33

22

23

15

34

7

30

24

28

Somewhat Pessimistic

5

2

2

14

4

9

5

2

3

6

2

Strongly pessimistic

0

0

0

0

2

0

0

0

0

0

0

1d. In the next 12 months, to what extent are you optimistic
or pessimistic about the prospects for your own organisation?
Strongly optimistic

24

14

19

20

15

15

22

57

19

28

33

Somewhat optimistic

52

56

61

57

57

61

56

32

58

42

55

Neither optimistic nor pessimistic

19

21

20

18

26

20

19

7

15

18

10

Somewhat Pessimistic

5

10

0

6

2

4

3

4

8

12

2

Strongly pessimistic

0

0

0

0

0

0

0

0

0

0

0

4a. Thinking about your organisation in the next 12 months, do
you expect the following to increase, decrease or stay the same?
Profit:
Significant increase

37

27

47

20

23

44

34

69

33

18

40

Moderate increase

34

37

35

38

40

41

36

24

37

42

35

No change

18

27

16

32

19

9

17

4

18

28

21

Moderate decrease

9

10

0

8

17

6

11

2

10

10

4

Significant decrease

2

0

2

2

0

0

1

2

1

2

0

Don't know

0

0

0

0

0

0

1

0

0

0

0

4b. Thinking about your organisation in the next 12 months, do
you expect the following to increase, decrease or stay the same?
Revenues:
Significant increase

39

39

49

18

30

44

39

70

39

16

39

Moderate increase

37

39

38

50

53

46

43

20

36

32

42

No change

13

15

11

18

9

7

12

4

9

36

8

Moderate decrease

8

6

2

12

4

0

3

4

13

10

8

Significant decrease

3

2

0

2

4

2

2

2

4

2

2

Don't know

1

0

0

0

0

0

1

0

0

4

2

CEO Briefing 2014 | The Business Agenda for Europe: Growth in a Digital World 21

5

4c. Thinking about your organisation in the next 12 months, do
you expect the following to increase, decrease or stay the same?
Cost reductions:
Significant increase

14

6

13

6

15

13

13

28

14

16

10

Moderate increase

44

52

64

39

42

48

46

50

49

32

46

No change

32

37

22

45

34

33

28

19

33

28

33

Moderate decrease

8

4

2

6

8

6

12

2

3

16

8

Significant decrease

2

2

0

4

2

0

1

0

1

4

4

Don't know

1

0

0

0

0

0

1

2

0

4

0

4d. Thinking about your organisation in the next 12 months, do
you expect the following to increase, decrease or stay the same?
Workforce:
Significant increase

35

31

56

20

30

46

36

65

34

25

19

Moderate increase

30

31

29

26

30

20

31

19

38

37

37

No change

23

25

15

38

25

22

24

11

20

27

35

Moderate decrease

10

14

0

10

15

9

9

6

8

10

8

Significant decrease

1

0

0

4

0

2

0

0

1

0

2

Don't know

1

0

0

2

0

0

1

0

0

2

0

Question 6

6a. Please select the statement that best describes your
perspective on the global economy over the next 12 months.
Major emerging markets will
experience a slowdown

43

42

31

65

59

37

43

36

46

66

40

Major emerging markets
will experience strong
or stable growth

57

58

69

35

42

63

58

64

54

34

60

6b. Please select the statement that best describes your
perspective on the global economy over the next 12 months.
Changes in developed world
monetary policy (eg quantitative
easing) will result in instability
in emerging markets

34

35

26

41

42

34

37

35

39

47

28

Changes in developed world
monetary policy is unlikely
to harm the outlook in
emerging markets

66

65

75

59

59

66

63

66

62

53

73

6c. Please select the statement that best describes your
perspective on the global economy over the next 12 months.
Fiscal austerity in key markets
will have a negative influence
on economic growth

51

58

41

59

47

37

49

34

43

62

57

Fiscal austerity will not hamper
economic growth

49

42

59

41

53

63

51

66

57

38

43

Percentage of
respondents (%)

Brazil

Brazil

5

Russia

Russia

8

India

India

5

China

China

10

US

US

5

UK

UK

5

Spain

Spain

5

Italy

Italy

5

Germany

Germany

5

France

France

100

Global Total

Global Total

Percentage of
respondents (%)

100

5

5

5

5

5

10

5

8

5

5

Question 7
7a. Which statement most closely reflects the perspective
of your company’s strategy over the next 12 months?
We intend to prioritise
investment in our home market
(country where you are based)

42

35

24

66

33

22

44

58

40

46

39

We intend to prioritise investment
outside of our home market

58

65

76

34

67

78

56

42

60

54

61

7b. Which statement most closely reflects the perspective
of your company’s strategy over the next 12 months?
We intend to prioritise
investment in the BRIC countries
over other emerging markets

41

27

18

37

37

26

40

49

47

57

63

We expect to shift focus from the
BRIC countries towards other, more
rapidly growing emerging markets

60

73

82

63

64

74

60

51

53

43

37

7c. Which statement most closely reflects the perspective
of your company’s strategy over the next 12 months?
Economies in the European Union
will improve and our company
will likely shift investments
towards the EU

55

60

75

78

45

68

48

28

60

75

47

Economies in the European Union
will worsen and our company
will likely shift investments away
from the EU

45

40

26

22

55

32

52

72

40

26

53

7d. Which statement most closely reflects the perspective
of your company’s strategy over the next 12 months?

The USA economy will improve
and our company will likely shift
investments towards the USA

43

23

24

48

46

44

64

33

42

37

53

The USA economy will worsen
and our company will likely shift
investments away from the USA

57

77

76

52

54

56

36

67

58

63

47

7e. Which statement most closely reflects the perspective
of your company’s strategy over the next 12 months?
We will be increasing our
investment in research and
development

80

78

96

94

70

90

87

98

74

70

80

We will be decreasing our
investment in research and
development

20

22

4

6

30

10

13

2

26

30

20


22 Appendix

5

Percentage of
respondents (%)

Brazil

Brazil

5

Russia

Russia

8

India

India

5

China

China

10

US

US

5

UK

UK

5

Spain

Spain

5

Italy

Italy

5

Germany

Germany

5

France

France

100

Global Total

Global Total

Percentage of
respondents (%)

100

5

5

5

5

5

10

5

8

5

5

Question 9

Question 16

9a. Which of the following strategies will be most important to
driving revenue growth in your company over the next three years?
In home market Country where you are based:

Please select the statement that best describes your company’s
approach to digital business investments (such as cloud computing,
data analytics, machine to machine communications, social and
mobile). Our company’s digital technology investments are:

Selling new products/
services to existing customers

32

37

27

33

28

17

37

49

24

22

37

Selling existing products /
services to new customers

19

14

18

28

23

17

22

11

20

22

14

Primarily focused on growth
opportunities and new ways of
reaching customers

31

33

26

18

23

30

26

23

27

33

33

Selling new products /
services to new customers

36

39

53

31

36

50

32

31

47

44

33

Primarily focused on process
efficiencies and cost reduction

59

48

70

69

47

59

68

77

63

41

55

Selling existing products /
services to existing customers

13

12

2

8

13

17

9

9

9

12

16

Not applicable

10

19

4

14

30

11

7

0

10

27

12

9b. Which of the following strategies will be most important to
driving revenue growth in your company over the next three years?
Outside your home market – Developed markets:
Selling new products/
services to existing customers

23

15

15

16

34

7

27

51

18

16

22

Selling existing products /

services to new customers

23

33

11

22

13

19

20

18

18

24

18

Selling new products /
services to new customers

47

46

72

48

45

63

41

31

58

52

53

Selling existing products /
services to existing customers

7

6

2

14

8

11

12

0

6

8

8

9c. Which of the following strategies will be most important to
driving revenue growth in your company over the next three years?
Outside your home market – Emerging markets:
Selling new products/
services to existing customers

15

6

6

10

10

6

15

28

9

13

20

Selling existing products /
services to new customers

17

25

9

25

18

16

20

20

15

23

18

Selling new products /
services to new customers

54

62

82

47

51

75

47

46

63

48

50

Selling existing products /
services to existing customers

14

8

4

18

22

4

17

6

13

17

12

Question 15
To what extent do you expect the continued evolution of
digital technologies (such as cloud computing, E-commerce,

data analytics, machine-to-machine communication, social
and mobile) to change your industry over the next 12 months?
Complete Transformation

12

12

0

0

0

0

5

15

17

24

10

Significant change

40

35

48

37

36

61

47

62

37

28

41

Moderate change

31

39

37

43

47

33

35

21

32

30

24

Incremental change

14

14

15

14

17

4

10

0

13

10

14

No change

2

0

0

6

0

2

1

0

0

0

6

Don't know

2

0

0

0

0

0

2

2

1

8

6

Question 17
17a. How important are investments in digital technologies
(such as cloud computing, E-commerce, data analytics,
machine-to-machine communication, social and mobile)

to the following areas of your business? Grow sales:
Extremely important

20

8

6

12

19

11

26

46

18

10

29

Moderately important

25

31

20

31

15

22

25

24

25

30

16

Somewhat important

31

35

33

35

43

35

31

9

33

16

37

Slightly important

20

25

35

10

19

24

17

22

22

28

16

Not at all important

4

2

6

12

4

7

2

0

3

6

2

Don’t know

1

0

2

0

0

0

0

0

0

10

0

17b. How important are investments in digital technologies
(such as cloud computing, E-commerce, data analytics, machineto-machine communication, social and mobile) to the following
areas of your business? Improve the customer experience:
Extremely important

24

25

11

12

11

26

32

51

18

8

Moderately important

37

29

38

39

49

44

36

Somewhat important

24

27

38

33

21

20

20

24

38

49

39

37

11

18

31

18

Slightly important

13

17

11

12

17

6

10

0

15

18

16

Not at all important

2

2

0

4

2

4

2

0

0

2

6

Don’t know

0

0

2

0

0

0

0

0

0

2

0


CEO Briefing 2014 | The Business Agenda for Europe: Growth in a Digital World 23

5

17c. How important are investments in digital technologies
(such as cloud computing, E-commerce, data analytics, machineto-machine communication, social and mobile) to the following
areas of your business? Open new sales channels:

Percentage of
respondents (%)

Brazil

Brazil

5

Russia

Russia

8

India

India

5

China

China

10

US

US

5

UK

UK

5

Spain

Spain

5

Italy

Italy

5

Germany

Germany

5

France

France

100

Global Total

Global Total

Percentage of
respondents (%)

100

5

5

5

5

5

10

5

8

5

5

17f. How important are investments in digital technologies
(such as cloud computing, E-commerce, data analytics, machineto-machine communication, social and mobile) to the following
areas of your business? Attract and retain the best talent:

Extremely important

19

6

9

10

12

19

23

42

12

16

26

Extremely important

21

14

11

10

19

17

18

56

15

24

27

Moderately important

25

39

16

28

26

15

28

29

26

34

30

Moderately important

39

54

46

39

42

44

43

29

51

24

41

Somewhat important

30

29

44

34

35

46

31

15

44

28

14

Somewhat important

26

23

35

43

19

26

26

7

20

26

18

Slightly important

21

21

27

12

26

17

15

13

17

16

24

Slightly important

11

10

7

4

12

11

11

6

9

24

8

Not at all important

5

6

2

16

2

4

4

2

3

4

6

Not at all important

3

0

0

4

8

2

2

2

5

0

6

0

Don’t know

0

0

2

0

0

0

0

0

0

2

0

Don’t know

0

0

2

0

0

0

0

0

0

2

17d. How important are investments in digital technologies
(such as cloud computing, E-commerce, data analytics, machineto-machine communication, social and mobile) to the following
areas of your business? Create new products and services:

17g. How important are investments in digital technologies

(such as cloud computing, E-commerce, data analytics, machineto-machine communication, social and mobile) to the following
areas of your business? Improve the efficiency of our operations:

Extremely important

18

12

7

6

19

11

16

52

12

24

18

Extremely important

35

29

16

20

30

28

31

69

33

34

37

Moderately important

28

15

35

34

23

30

31

20

45

14

20

Moderately important

35

44

35

35

32

52

41

22

34

26

31

Somewhat important

31

48

36

24

38

35

39

15

27

26

35

Somewhat important

22

21

38

33

26

19

23

9

22

22

18

Slightly important

17

23

16

26

13

20

12

11

14

22

18

Slightly important

7

4

9

8

9

2

5

0

9

16

10

Not at all important

5

2

4

10

8

4

2

2

3

10

10

Not at all important

1

2

0

4

2

0

0

0

3

0

4

Don’t know

0

0

2

0

0

0

0

0

0

4

0

Don’t know

1

0

2

0

0

0

1

0

0

2

0

17e. How important are investments in digital technologies
(such as cloud computing, E-commerce, data analytics, machineto-machine communication, social and mobile) to the following
areas of your business? Improve management control,
oversight & governance:
Extremely important

17

10

4

16

15

4

22

47

11

10

16

Moderately important

27

27

14

29

36

23

31

20

23

38

33

Somewhat important

28

25

35

29

26

49

27

18

25

24

28

Slightly important

22

31

37

22

17

21

17

11

32

20

20

Not at all important

5

8

10

4

6

4

2

2

9

8

4

Don’t know

1

0

2

0

0

0

1

2

0

0

0

Question 19
What are the most significant challenges you face when
implementing investments into digital business initiatives
(such as cloud computing, data analytics, machine to
machine communications, social and mobile)?
Insufficient funding

35

40

35

22

47

28

36

26

37

28

37

Skills shortage

35

35

31

29

43

41

40

36

39

34

33

Lack of senior executive support

31

31

36

6

30

32

28

18

27

38

31

Insufficient customer demand
for digital solutions

33

25

31

20

36

35

29

13

37

26

25

Poor cross-functional
collaboration

35

48

38

18

34

33

44

15

38

38

33

Difficulties managing change

42

39

47

43

43

43

42

66

44

44

25

Other, please specify

1

0

0

0

2

0

2

0

0

0

2

None

3

0

2

24

0

0

1

2

3

4

8


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