Two-thirds (66%) of business leaders globally are optimistic that the European market will make a relatively fast recovery from the economic downturn caused by the COVID-19 pandemic, according to a new report from Accenture.
The report, entitled “Bold Moves in Tough Times” and based on a survey of nearly 500 C-level executives in Europe, North America and Asia-Pacific across 15 industries, found that approximately three in 10 respondents (29%) expect the recovery in Europe to be fairly rapid (“V-shaped”), while 37% anticipate a slower, but steady, “U-shaped” recovery in the next 12 months.
The most optimistic sector is pharmaceuticals/biotech/life sciences, with 34% of business leaders in that sector expecting an increased demand in Europe as a result of the pandemic. The second-most-optimistic sector is communications, media & entertainment, with 52% of those respondents expecting a V-shaped recovery in their European markets, followed by insurance, at 47%.
At the other end of the spectrum are the automotive and airlines/travel/transportation sectors, with only 7% and 12% of respondents, respectively, expecting a rapid recovery.
The report also reveals that executives expect the German, Nordic and U.K. economies to rebound the fastest from the downturn, followed by France, Spain and Italy.
In addition, European business leaders are optimistic regarding Europe’s competitiveness, as four in 10 respondents (39%) believe that European companies will be more competitive vis-a-vis their U.S. peers than they were before the crisis, and even more (43%) believe that European companies will be more competitive compared with Chinese businesses.
Accenture’s research indicates that there is a risk that executives in Europe are overly cautious regarding how they prepare for the rebound, compared with those in North America and Asia-Pacific.
Specifically, European executives appear to be:
- Focusing on incremental rather than game-changing innovation: More than half (53%) of European respondents said they are slowing investments in innovation and won’t relaunch any initiatives in the next six months, compared with 33% of respondents in North America and 49% in Asia Pacific.
- Underinvesting in the future of business: In Europe, only about one in seven companies (16%) is already investing in initiatives to prepare for the rebound, compared with one in four (25%) in Asia Pacific and one in three (34%) in North America.
- Less likely to collaborate to rebound: Business leaders in Europe are slightly less likely than those in North America and Asia-Pacific to collaborate with other companies to mitigate the impact of the crisis and rebound faster (48% of those in Europe, compared with 53% in North America and 55% in Asia-Pacific).