The McKinsey Global Institute, a leading economic research group, has just published its new report: ‘Securing Europe’s competitiveness: Addressing its technology gap’.
The whole report is essential reading, and we recommend that all ICTOulu members take some time to read through the full document on their website. These are some of the key takeaways:
The continent’s record on inclusion and sustainability is strong
Inclusion, sustainability and growth are the three key areas that are essential to improving lives across the continent. Based on various research and indexes, the region is a leader on equality, social progress, and life expectancy. However, per capita GDP growth has been sluggish over the past couple of decades and is currently 30 percent below that of the United States. This is a gap that had been narrowing but is no longer doing so.
Corporate Europe’s tech weakness permeates across many sectors
Corporate Europe’s weakness in tech is more evident than ever before. Whilst in the past this could be compensated by strength in other areas such as chemicals, materials, and fashion, this is now no longer the case. As technology permeates across all sectors, and corporate scale advantages and winner-take-most dynamics increase, this current approach is no longer sustainable. Additionally, the lack of scale in transversal technology is also an issue, as it jeopardizes its position in almost all sectors, including automotive and luxury goods.
Any decline in growth could lead to significant problems in the future
The ability of companies to make progress in areas like inclusion and sustainability, as well as maintaining healthy growth, has never been more important than it is now. Furthermore, firms could miss out on a value-added opportunity of €2 trillion to €4 trillion a year by 2040 if there isn’t any improvement on transversal technology.
Decision makers and companies should drive the step change on technological capabilities and competitiveness
Europe should continue to leverage its many strengths. However, as winner-takes-most dynamics spread, scale, speed, and established tech ecosystems are increasingly vital. This is something that is even more emphasized by a changing geopolitical landscape. Because of these high stakes, breaking new ground and reevaluating trade-offs in a way that has been previously uncomfortable is something that decision makers may now want to consider.