DAVOS, Switzerland – (BUSINESS WIRE) – 25 Jan 2021–
European companies that are accelerating their digital transition and sustainability are likely to recover faster and emerge stronger from the COVID-19 crisis, according to a new report. report from Accenture (NYSE: ACN).
According to the report, the COVID-19 crisis has resulted in differences in the resilience and growth prospects of European companies:
- Half (49%) of European companies have reported declines in earnings or profits over the past 12 months and do not expect improvement in the next 12 months.
- A fifth (19%) of European companies had strong financial performance before the pandemic but now expect negative earnings or profit growth in the next 12 months. The report referred to these companies as “fallen angels.”
- One-third (32%) of European companies expect to deliver profitable growth in the next 12 months. The report describes these companies as “future leaders”.
The report shows that companies that lead in digital adoption and sustainable practices are nearly three times more likely than other companies to be among the “leaders of tomorrow,” and so recover faster and emerge stronger from the crisis.
“The digital transformation defined the business landscape in the 2010s, and companies leading this transformation with speed and scale are winning,” said Jean-Marc Ollagnier, CEO of Accenture in Europe. “We are entering a decade ushering in a new wave of business change defined by a sustainable transition. How European companies manage this ‘twin transformation’ will determine how quickly they will recover from the crisis and how well they will be positioned to sustain growth in a post-pandemic world. “
According to research, nearly half (45%) of European businesses prioritize investing in both digital transformation and sustainability. Specifically, 40% of European respondents plan to invest heavily in artificial intelligence, 37% plan to invest heavily in the cloud, and 31% plan to rebalance their investment to focus more on sustainable business models.
European companies are unsure about their 2021 growth targets
The report noted that less than half (45%) of European businesses expect to reach their 2021 growth target. Those in Great Britain, France and Germany are among the most optimistic, with 59%, 52% and 51% of respondents in those countries, respectively, expecting to hit their 2021 targets. Respondents in Italy and Spain were among the most pessimistic, with only 34% and 31%, respectively, expecting to reach their 2021 growth targets.
“Even companies that recognize business opportunities to accelerate their digital and sustainable transitions face obstacles at various stages of this twin transformation journey,” said Ollagnier. “These challenges include defining viable business models around sustainable practices and products, freeing up resources to better mobilize organizations, and moving rapidly from pilot and closed-door projects to large-scale and enterprise initiatives.”
The report suggests some strategic steps companies should take to overcome these barriers and successfully carry out twin transformations. This includes:
- Fostering an ecosystem-based business model that is driven by sustainability and made possible by technology: The twin transformation leaders already generate more than 10% of their income this way.
- Combine resources to scale technology applications to sustainable practices: The twin transformation leaders invest more in overall innovation, allocating more than 10% of their annual revenue to research and development. They also recognize that sustainability and technology are not separate priorities.
- Leading, empowering, and nurturing talent: The twin transformation leaders are responsible for the continuity of their employees’ work. They don’t waste effort reskilling / upskilling their workforce, understanding that building and nurturing talent is essential to turning transformation into real business value.
“There’s a reason why DNA is a double helix,” said Ollagnier. “The spiral structure of the molecules that form the basis of life is essential for replication, adaptation – and development. It is a powerful metaphor for business amid two parallel transitions that twist the laws of evolution in dynamic yet unstoppable ways: digital transformation and sustainability. European businesses that continue to follow well-traveled paths will see others gain a competitive advantage by tapping into the dynamic interactions at the heart of their DNA. Or they can join them by unlocking the value that lies in blending innovative technology with traditional European strengths of sustainability, solidarity and purpose. “
The study is based on a survey of 4,051 C-suite executives in 13 countries across 19 industries. The survey was conducted in November 2020 and includes companies with annual revenues exceeding US $ 500 million. The industries represented include: aerospace and defense; airlines / travel / transportation; automotive; banking; capital market; communication / media / entertainment; chemical material; consumer goods; energy; health; high technology; industrial goods & equipment; Coverage; pharmaceutical / biotech / life sciences; public service; retail; software / platform; and utilities. The countries represented include Australia, Canada, China, France, Germany, Italy, Japan, Saudi Arabia, United Arab Emirates, Singapore, Spain, United Kingdom and the United States.
Accenture is a global professional services company with leading capabilities in digital, cloud and security. Combining unmatched experience and specialist expertise in more than 40 industries, we offer Strategy and Consulting, Interactive, Technology and Operations services – all supported by the world’s largest network of Advanced Technology and Intelligent Operations centers. Our 514,000 people fulfill the promise of technology and human ingenuity every day, serving clients in more than 120 countries. We embrace the power of change to create value and mutual success for our clients, employees, shareholders, partners and our communities. Visit us at www.accenture.com.
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PUB: 01/25/2021 03:59 AM / DISC: 01/25/2021 03:59 AM
Business Wire Copyright 2021.