European Companies That Accelerate Both Digital & Sustainability Transitions Will Recover Faster from the COVID-19 Crisis, Fi...
January 25 2021 - 02:59AM
Business Wire
Companies expect recovery to take up to 18
months on average
European companies that accelerate both their digital and
sustainability transitions are likely to recover faster and emerge
stronger from the COVID-19 crisis, according to a new report from
Accenture (NYSE: ACN).
“The European Double Up: A twin strategy that will strengthen
competitiveness,” launching during The Davos Agenda week, finds
that European business leaders expect to return to their
pre-pandemic profit levels in 18 months on average.
According to the report, the COVID-19 crisis has resulted in a
divergence in European companies’ resilience and growth
prospects:
- Half (49%) of European companies have been reporting revenue or
profit decline for the past 12 months and don’t expect any
improvement in the next 12 months.
- One-fifth (19%) of European companies had strong financial
performance before the pandemic but now expect negative revenue or
profit growth in the next 12 months. The report refers to these
companies as “falling angels.”
- One-third (32%) of European companies expect to deliver
profitable growth in the next 12 months. The report refers to these
companies as “tomorrow’s leaders.”
The report indicates that companies leading in both digital
adoption and sustainable practices are nearly three times more
likely than other companies to be among “tomorrow’s leaders,”
thereby recovering faster and emerging stronger from the
crisis.
“Digital transformation defined the business landscape in the
2010s, and companies that led this transformation at speed and
scale won the day,” said Jean-Marc Ollagnier, CEO of Accenture in
Europe. “We are entering a decade that ushers in a new wave of
business change defined by the sustainability 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 the post-pandemic
world.”
According to the research, nearly half (45%) of European
businesses are prioritizing investment in both digital
transformation and sustainability. Specifically, 40% of European
respondents plan to make large investments in artificial
intelligence, 37% plan to make large investments in cloud, and 31%
are rebalancing their investments to focus more on sustainable
business models.
European companies uncertain about 2021 growth
targets
The report notes that less than half (45%) of European
businesses expect to achieve their 2021 growth targets. Those in
the United Kingdom, France and Germany are among the most
optimistic, with 59%, 52% and 51% of respondents in those
countries, respectively, expecting to achieve their 2021 targets.
Respondents in Italy and Spain are among the most pessimistic, with
only 34% and 31% of them, respectively, expecting to hit their 2021
growth targets.
“Even companies that recognize the business opportunity to
accelerate their digital and sustainable transitions face barriers
at different stages of this twin transformation journey,” Ollagnier
said. “Those challenges include defining a viable business model
around sustainable practices and products, freeing up resources to
better mobilize the organization, and moving rapidly from pilot and
siloed projects to large-scale and enterprise-wide
initiatives.”
The report suggests several strategic steps a company must take
to overcome these obstacles and successfully execute a twin
transformation. These include:
- Fostering ecosystem-based business models driven by
sustainability and enabled by technology: Twin transformation
leaders already generate more than 10% of their revenues this
way.
- Combining resources to scale technology applications to
sustainable practices: Twin transformation leaders invest more
in innovation across the board, 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: Twin
transformation leaders take responsibility for the continued
employability of their people. They spare no effort in
reskilling/upskilling their workforce, understanding that building
and nurturing talent is essential to turning transformation into
tangible business value.
“There is a reason why DNA is a double helix,” Ollagnier said.
“The spiralling structure of the molecule that is the basis of life
is critical for replication, adaptation — and flourishing. It is a
powerful metaphor for business amid two parallel transitions
twisting the laws of evolution in dynamic yet unstoppable ways:
digital transformation and sustainability. European businesses that
continue down a well-trodden path will watch others gain a
competitive edge by exploiting dynamic interactions at the heart of
their DNA. Or they can join them by unlocking the value that lies
in blending innovative technology with Europe’s traditional
strengths of sustainability, solidarity and purpose.”
About the Research
The research 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 covers companies with annual revenues exceeding
US$500 million. Industries represented include: aerospace and
defense; airlines/travel/transport; automotive; banking; capital
markets; communications/media/entertainment; chemicals; consumer
goods; energy; health; high tech; industrial goods & equipment;
insurance; pharmaceutical/biotech/life sciences; public service;
retail; software/platforms; and utilities. Countries represented
include Australia, Canada, China, France, Germany, Italy, Japan,
Saudi Arabia, United Arab Emirates, Singapore, Spain, the United
Kingdom and the United States.
About Accenture
Accenture is a global professional services company with leading
capabilities in digital, cloud and security. Combining unmatched
experience and specialized skills across more than 40 industries,
we offer Strategy and Consulting, Interactive, Technology and
Operations services — all powered by the world’s largest network of
Advanced Technology and Intelligent Operations centers. Our 514,000
people deliver on 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 shared success for our
clients, people, shareholders, partners and communities. Visit us
at www.accenture.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20210125005034/en/
Francois Luu Accenture +33 1 53 23 68 55
francois.luu@accenture.com Andy Rowlands Accenture +44 7952 594784
andy.rowlands@accenture.com
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