How growth can help Europe’s companies face the coming economic crisis
The great social imperative of the COVID-19 human crisis is the need to both save lives and protect livelihoods. The threat to both has become increasingly clear: too many people are still suffering and dying—though, at this writing, according to the European Union Centre for Disease Prevention and Control, “the initial wave of transmission has passed its peak.”1 For businesses, however, the threat still looms large. The longer doors are shuttered and workers remain locked down, the greater the risk of severe economic distress. The question for business leaders is how to emerge from the crisis with fortitude, recover revenues, and accelerate growth.
That’s one area where Europe may be well positioned to thrive. The innovative spirit once responsible for blockbuster inventions like the automobile, jet engine, computer, television, and the worldwide web responded quickly to the current healthcare crisis. Bosch Healthcare Solutions2 developed a fully automated molecular COVID-19 test, inventor and entrepreneur Sir James Dyson designed an innovative ventilator for coronavirus patients in just ten days,3 and a Spanish consortium repurposed its 3-D printers to make emergency respirators.4 And with the region’s unique innovative assets and ideas, and its long-standing commitment to research and development as a source of differentiation, so much more is possible.
If there’s an impediment to that promise, it’s the region’s ticklish aversion to the kinds of big bets needed to bolster an economy reeling from the pandemic. Once the home of entrepreneurs who started companies that went on to achieve global dominance—including Allianz, BP, Daimler, Royal Dutch Shell, and Volkswagen—the region today struggles to launch and scale up new ventures. No European company established in the past 30 years has yet joined the ranks of the world’s top 100 companies by market capitalization, compared with three in China and seven in the United States. SAP, established in 1972, was the last European entrant to the global top 100, and all top 100 European companies are more than 30 years old.
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