“Companies will face the greatest economic reinvention since World War II”

“Companies will face the greatest economic reinvention since World War II”

Companies will face the greatest economic reinvention since World War

The world faces an extraordinary mix of challenges and new opportunities. Jean-Marc Ollagnier, CEO of Accenture Europe, is convinced that in this context “corporations are facing the greatest economic reinvention since the Second World War” and “in the next decade the economy and society will face a more comprehensive change than in the period from 1945 to 1945 today. Ollagnier (Lyon, 1961), whose position gives him a unique perspective on the European business scene, gave this interview on Monday at the consultancy’s premises on the famous Promenade in Davos. Accenture Europe achieved sales of 20,000 million euros in the region in 2022.

question. How do you see the position of European companies in this world with great challenges, with the war in Ukraine and its serious consequences for the continent, with the geopolitical realignment in the face of China, with US protectionism?

answer. The whole world is facing a polycrisis, but the European situation has some important specific aspects. First, the energy situation is more serious than in North America, which has resources, and parts of Asia, which enjoy cheap exports from Russia. The second is the technological question. Europe lagged behind the US, but the outbreak of the pandemic was a great accelerator for technology adoption. Third, European companies are slightly better off than American or Asian companies in terms of financial sustainability, but they operate in a context of slower growth. In Europe, compared to North America and China, we have invested less in R&D and technology, resulting in lower growth. I see a very broad belief in the need for deep change and I don’t see European CEOs as particularly negative or pessimistic despite the short-term difficulties.

P. He points out that European companies have stepped up on the technological side after the pandemic. But a recent report by his company suggests they’re still far behind the Americans. It’s a historical dynamic. Is it realistic to think they can close the gap?

R. If you look at the media, reality is what you describe. If you go into detail, you find European companies that are leaders in their sectors and compete very well with those of the US, but in Europe there is historical underinvestment, quite large, of about $100,000 million, and it will be hard to recover. You’re right, many will likely struggle to bridge the gap.

P. The war in Russia has prompted reflection on the dangers of over-reliance on an adversary who could become an enemy. The US is firmly moving towards reducing dependency and curbing exports to China. In Europe there is an open debate about what to do. What do you perceive? What are European companies doing?

R. We don’t know what will happen. A new world order is probably emerging, we are seeing more interventionism by governments. What we do know is that smashing the toy of globalization in one fell swoop is not easy. We are not operating with a defined end-stage in mind, but there is a change in the way business leaders are now emphasizing geopolitical risk much more than before. The risk is weighed up and the aim is to reduce it as much as possible. This is happening, there are decisions related to supply chains. It’s not black and white decisions, CEOs generally look for diversification. This is likely to go further if the sense of geopolitical risk persists.

P. The development of green technologies is one of the central themes. The US has approved large subsidies and there is friction about it. How do you see this sector?

R. In general, we’ve seen more interventionism since the outbreak of the pandemic. The IRA (Inflation Reduction Act, the legislative measure that activates US subsidies) is a decision of enormous importance, and logically everyone is looking at it. Well, Europe has implemented this kind of policy in the past. In Spain, for example, the installation of renewable energies was promoted. I think that there is a great will in Europe to move further in this direction.

P. Are you optimistic that European companies will be able to compete against the US and China on a global scale in the medium and long term?

R. You can be optimistic. If you look at what’s going on, the zero emissions agenda, the technological innovation, the new consumer expectations, we have to spearhead the greatest economic reinvention since World War II. That’s what you get. In the next decade we will have to reinvent the economy and society more than we have since 1945. There will be problems in the short term. We have to be clear. But I see an opportunity on the horizon that I haven’t seen before. Government, business and people are aligning like never before on the idea of ​​change, on the need for reinvention.

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