spot_img

International expansion drives European middle-market growth and optimism over next 12 months

 

– 86% of European middle-market companies plan revenue growth of more than 6% in the next 12 months

– 25% of European middle-market organizations plan international expansion

– Cognitive technologies and hiring diverse full-time talent round out growth priorities for European executives

LONDONJuly 17, 2018 — European middle-market companies expect to ride a wave of optimism over the next 12 months and cash in on ambitious growth plans, according to analysis published today in the annual EY Growth Barometer: Europe survey. Bolstered by Europe’s highest economic confidence levels since the global financial crisis of 2007–2008, European middle-market executives are looking to capitalize and are unmoved by broader concerns around rising nationalist sentiments and other geopolitical uncertainties, including rising tensions over trade.

The annual survey of 863 middle-market executives in eight European countries finds that nearly two-thirds (62%) of the respondents expect growth between 6% and 10% — representing a year-on-year increase of 38 percentage points, while a further 24% are targeting double-digit growth of 11%–15% in the coming 12 months — equalling to a 16 percentage points yearly rise.

International expansion is the driving force behind this confidence, as 25% of European middle-market leaders identified it as their top growth priority.

Andy Baldwin, EY EMEIA Area Managing Partner, says:

“European business leaders are poised for a buoyant year of growth. They are showing themselves to be more agile and willing to adapt to change more than many of their global counterparts. The middle market in Europe is getting ahead of change and shaping their businesses through investment, expansion and the embrace of technologies and diverse talent pools.”

Growth beyond borders

The survey finds that growth ambitions are the highest in Russia and the Netherlands. Thirty-eight percent of middle-market leaders in both countries plan to grow over 11% in the next 12 months.

Germany and FranceEurope’s largest economies respectively, are not far behind with 31% of middle-market companies looking at double-digit growth over 11% in both markets. The UK proportion of middle-market organizations showing double-digit growth ambition is lower at 24%, as the uncertainty around Brexit continues to define prospects, the survey reveals.

Amid international expansion, France leads this drive with 33% of respondents looking to enter a new overseas market. In the UK, however, only 16% of middle-market leaders place cross-border expansion as a priority. According to the survey results, Brexit continues to weigh heavily on UK middle-market business leaders as a whole, who are now focused on increasing market share (21%) and pursuing M&A opportunities (19%), rather than expansion beyond the domestic market.

Risks to growth

Given the focus on cross-border expansion, Europe’s middle-market leaders place slow or flat global growth as the top external risk (with 28% of the cohort), 18 percentage points up on 2017 and 4% more than the rest of the world. This is considered a much greater risk than related concerns such as geopolitical uncertainty (9%) and high trade barriers (2%). Other challenges include insufficient cash flow, which 37% of European middle-market CEOs perceive as the leading operational challenge to growth (up 22% from 2017).

Baldwin says: “While Brexit continues to define prospects, particularly in the UK, the critical issue for the European market is sustained global growth. So long as political actions don’t obstruct global economic growth, European company leaders will remain relatively optimistic.”

Embracing and understanding technology

The survey also finds that technology represents the most powerful change to European middle-market businesses in 2018. While last year 70% of the region’s middle-market leaders said they would never adopt robotic process automation, today an even greater percentage (75%) say they are adopting artificial intelligence (AI) within two years. In fact, 97% of all Europe’s middle-market company leaders have plans to adopt AI within five years, putting the region ahead in embracing cognitive technologies and machine learning.

However, far fewer European middle-market companies are complementing this swing with a corresponding strategy to combat against looming cyber threats. Just 7% of the region’s middle-market CEOs are investing in technology to reduce cyber risks and only 5% rate cyber threats as the key barrier to growth.

Baldwin says: “In this world of rapid transformation, agility is a key business strength. Company leaders will need to develop strong digital security strategies hand-in-hand with their AI adoption plans.”

Talent and hiring plans

In a show of confidence of ambitious revenue growth, over a third (37%) of European middle-market CEOs are looking to hire full-time employees and none intend to reduce their workforce. The survey respondents place attracting talent with the right skills (33%) as the No. 1 factor in accelerating growth and say an improved organizational culture will first and foremost attract young and digitally-native talent (36%). In line with a massive shift across the world, 42% of European middle-market company executives place diversity at the top of strategic recruitment priorities, a 29% increase from 2017.

Baldwin says: “New business challenges are creating a need for a different kind of employee, so it is promising to see that leaders are responding to change and prioritizing recruitment. As economic growth is increasingly driven by technology, the race for talent will become more and more vital to competitiveness.”

Notes to Editors

About EY

EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.

This news release has been issued by EYGM Limited, a member of the global EY organization that also does not provide any services to clients.

About the EY Growth Barometer

EY commissioned Euromoney Institutional Investor Thought Leadership to undertake an online survey of 2,766 C-suite (60% CEOs, founders or managing directors) in companies from 21 countries with annual revenues of US$1mUS$3b. The survey was conducted from 15 January–1 March 2018. EY further invited the EY Entrepreneur Of The Year™ alumni to take the survey. The survey was available in English and six other languages. Further in-depth interviews were carried out during March–April 2018 to provide additional insights. Countries included in the Europe region were BelgiumFinlandFranceGermanyItalyNetherlandsRussia and the United Kingdom where 863 executives were surveyed.

About EY’s Growth Markets Network

EY’s worldwide Strategic Growth Markets Network is dedicated to serving the changing needs of high-growth companies. For more than 30 years, we’ve helped many of the world’s most dynamic and ambitious companies grow into market leaders. Whether working with international, mid-cap companies or early stage, venture-backed businesses, our professionals draw upon their extensive experience, insight and global resources to help your business succeed.

Yvonne Díaz  
EY Global Media Relations   
+44 (0)799 056 0615
[email protected]




I want to grow my online platform to create awareness about ethical consumerism, environmentalism, and the plant-based lifestyle. My main mission is to share information that empowers people to make better choices and create a VEG NEW WORLD :)


Your support is vital and is helping me share the collected information with thousands of readers and viewers. I try to deliver exclusive stories and relevant content in a challenging commercial environment. Your contribution helps me to cover the costs that my service requires. Please consider contributing (no matter how small) to keep the information flowing so you can remain informed and have life changing interviews and stories to share.

spot_img

Subscribe

Related articles

spot_img
Betty Tűndikhttps://vegnew.world
Hi everyone! Nice to e-meet you! Here are a few things you should know about me. I am a conscientious, open-minded, adaptable to new experiences, and ambitious Business Development Manager with a Bachelor's Degree in Economics - Banking, Finance, and Accountancy. Through my studies, I've also obtained many naturopathic and nutrition degrees as well. Part-time jobs have added marketing, network marketing, event management, and store management skills to my experience throughout my career. Throughout my career, I have also been a Hotel Manager and owned a Bar/Restaurant & Internet Cafe. My online marketing and social media interactivity experience was gained when I and my husband started a business with an online/organic webshop & healthy lifestyle consultancy. I've improved my English at Cambridge Academy of English - 2003, in Cambridge. I live a conscious lifestyle, and try to protect the ecosystem. Animal lover and capable of helping others without judgment or negative reactions, this is thanked my knowledge in holistic therapies and the naturopathy courses I've followed. I cannot leave for my spiritual growth and the continuous development in alternative and holistic therapies, so I'm learning at Kyron School of New Consciousness, receiving a Bio Energo-therapist diploma. Thanks to all my experiences I've decided to venture into publishing and writing, while also continuing to learn many new things daily. I hope you enjoy reading my hand-picked news and check back for my weekly articles.