Accenture report-accelerating-europes-comeback-digital-opportunities-competitiveness-growth

ACCELERATING EUROPE’S COMEBACK: DIGITAL OPPORTUNITIES FOR COMPETITIVENESS AND GROWTH

CARRIED OUT BY

CONTENTS3 FOREWORD

4 INTRODUCTION

6 ACCELERATING EUROPE’S COMEBACK

8 EXECUTIVE SUMMARY

10 THE BUSINESS AGENDA FOR EUROPE: THE GROWTH AND COMPETITIVENESS CHALLENGE 14 THREE KEYS TO ADDRESSING THE WIDENING EU COMPETITIVENESS GAP

16 DIGITAL DISRUPTION: A CATALYST FOR EU GROWTH AND COMPETITIVENESS

24 THE DIGITAL RE-INDUSTRIALISATION OF EUROPE26 MANUFACTURING

28 BANKING

30 ENERGY AND UTILITIES

32 PUBLIC SERVICES

34 HEALTHCARE

36 SEIZING THE OPPORTUNITY38 BUSINESS RECOMMENDATIONS

40 POLICY RECOMMENDATIONS

40 IMPROVING THE REGULATORY ENVIRONMENT FOR DIGITAL UPTAKE

41 ADDRESSING THE DIGITAL SKILLS ISSUE

42 FOSTERING GROWTH AND INNOVATION THROUGH ENTREPRENEURSHIP

44 THE NEED TO MEASURE PROGRESS AND IMPACT—A DIGITAL INTENSITY INDEX

46 THE LAST WORD48 ABOUT THE RESEARCH

48 ACKNOWLEDGEMENTS

49 APPENDIX

50 EU DIVERSITY: COUNTRY ANALYSIS UNVEILS A VARIED AND CONTRASTING LANDSCAPE52 GERMANY

54 UK

56 FRANCE

58 ITALY

60 SPAIN

62 BELGIUM

64 RESEARCH RESULTS BY COUNTRY

72 REFERENCES

3

FOREWORD

Accelerating the digitalisation of the economy is essential to improve European competitiveness. The report published by Accenture on the occasion of the 12th European Business Summit identifies the challenges to be met in order to do so. BUSINESSEUROPE was delighted to collaborate on this effort.

The European economy is starting to recover. But Europe has not yet fully recovered from the crisis. “Business as usual” is simply not an option if we want more growth and more jobs for European citizens. We have to make the necessary reforms to regain the ground lost compared to key competitors on world markets.

We suffer from persistent unemployment because of excessive taxation and regulation, constrained access to finances, high energy prices, insufficient innovation, inadequate education and training and remaining labour markets rigidities.

Over the past five years, Europe focussed on a defensive or reactive agenda. It brought badly needed economic stabilisation. While we were repairing our economic system, the rest of the world did not stand still. Instead, they made structural reforms, invested in infrastructure, machinery, skills and innovation. They worked hard to make the best of information technologies and improve their competitiveness.

It is time for European policies to become much more proactive. We have a lot to offer as a region. Many entrepreneurs and SMEs are keen to develop their potential. But they need a supportive environment to be successful. The European Union aims to ensure that 20 percent of its GDP is generated by industry by 2020. In order to achieve that, Europe must stop regulating itself to death. It must unleash its innovation potential and accelerate the digitalisation of its economy. Financial resources are limited. They must be used for smart, future-oriented public and private investment. This will lead to jobs with a real future.

If we want to have more growth and create more jobs, a reactive agenda is not enough. Europe must act now. There is no time to waste.

Emma Marcegaglia, President, BUSINESSEUROPE

INTRODUCTION

The issue of how to restore competitiveness and growth to the European Union (EU) is a crucial one for all involved: the region’s businesses, governments and citizens alike. While important steps to that end have been taken over the years, much more must be done to move the region forward and keep it from slipping further behind other economies such as the US and China.

4

5

There is a palpable sigh of relief among EU business leaders that growth is returning. However, we must not make the mistake of conflating this more optimistic outlook with Europe’s competitiveness. The EU lags its competitors on productivity and on crucial aspects of innovation. And the recent economic crisis has set efforts back, so now is the time to accelerate our return to competitiveness.

The following report is designed to contribute to that effort. Based on research jointly conducted by Accenture in collaboration with BUSINESSEUROPE and the European Business Summit (EBS), it explores the on-going economic challenges Europe faces and proposes tangible, practical steps leaders can take to address critical drivers of competitiveness.

The solution to the challenge is neither easy nor simple. However, according to EU business leaders participating in our research, concerted effort focusing on three key areas could help considerably: smarter regulation, innovation resulting in the creation of new products and services, and the adoption of new technologies to drive productivity. The development and implementation of digital technologies, in particular, will play a very important role.

Digital is fundamentally reshaping individual organisations and disrupting entire industries. And digital technologies offer great promise in addressing the dual challenges of productivity and innovation—areas in which the EU is rapidly falling behind other regions and countries.

The vast majority of businesses see the potential in digital to support growth. But in many cases, their focus is still too heavily on using digital investments to drive efficiencies, rather than on making their products and services digital. That balance must reverse. And a more aggressive and ambitious approach to digital adoption is needed to build on current momentum and capitalize on the numerous assets Europe already has that are prerequisites for digital transformation.

That is where new thinking and actions on regulations can help. EU business leaders in our research agreed that to pave the way for the digital transformation of Europe, policy makers should focus on efforts to create a supporting regulatory environment for investment in technology, innovation and digital infrastructure; tackle the ‘digital skills issue’ by addressing both the shortage of digital skilled people and the reskilling of workers displaced by automation; and encourage the development of new businesses and a culture of entrepreneurship to facilitate the creation of new jobs.

Accenture would like to thank BUSINESSEUROPE and the EBS for their support and assistance with this important research. We hope that, through our combined efforts and insights, we have been able to contribute substantively to the conversation about how to re-energise the EU economy.

Jo Deblaere, COO and Group Chief Executive-Europe, Accenture

ACCELERATINGEUROPE’SCOMEBACK

Expect EU economy to improve over next three years

The EU is internationally competitive

2014

60%2013

46% 61%Competitiveness of EU will increase over next three years

47%

6

7

EU is behind China

EU is behind the U.S.

THE EU HAS A STRONG PERFORMANCE IN DIGITAL TECHNOLOGY ADOPTION…

…BUT WILL LAG BEHIND THE U.S. AND CHINA IN IMPLEMENTING DIGITAL TECHNOLOGY

BUSINESS LEADERS SAY DIGITAL TECHNOLOGIES ARE IMPORTANT OR CRITICAL TO BOOST:

…AND MUST URGENTLY CONSIDER MORE FOCUS ON DIGITAL INNOVATION AND GROWTH

DIGITAL PRODUCTIVITY, ENTREPRENEURIAL INNOVATION AND SMART REGULATION ARE KEY TO FUTURE EU SUCCESS:

Now

38%In 3 years

50%

PRIMARY FOCUS OF DIGITAL INVESTMENT:

Now

61%In 3 years

53%

96% EU competitiveness

Broadband coverage

Mobile broadband penetration

Population purchasing online

Accessing Government services online

93% EU economic growth 75% EU job creation

96% 47% 41%59%

60%62%Digital will drive major change in their industry in next 12 months

63%Fear losing customers if they do not embrace digital during this time

Increase productivity and reduce costs through automation and new production methods Use analytics and real time

information to improve financial performance, better control the business and increase speed to market

Improve the regulatory environment for digital uptake

Become a disrupter in your own industry by selling fundamentally new products and services, created in new ways

Driving processefficiency

40%Product/Service innovation and growth

Develop and implement new ways to serve customers through multiple channels

Address the digital skills issue through education, training and mobility

Foster growth and innovation through entrepreneurship

8

Improving economic conditions are fuelling renewed optimism among business leaders that the European Union (EU) is finally on the road to recovery. And at an objective level, it is. EU forecasts expect the euro area to grow 1.5 percent in 2014 and 2.0 percent in 2015, on the back of two straight years of decline or flat growth.i

But these more promising numbers and executive confidence mask underlying problems that continue to challenge Europe’s competitive position in the global economy. Projected EU growth still has not reached historic levels, and it trails by a wide margin the estimates for emerging markets and the US. Furthermore, European unemployment remains stubbornly high—well above that in China and the US—which threatens to dampen anymomentum the region can muster. The reality is that while conditions in Europe certainly are more positive than they were a year or so ago, they still do not compare favourablywhen viewed in the broader global context. In fact, rather than narrowing, the gap in Europe’s competitiveness with other major economies is forecast to grow.

Business leaders and policy makers need to urgently address two critical areas of competitiveness—productivity and innovation—while creating the regulatory environmentneeded to help the EU compete on a global basis. A powerful lever to that end are digital technologies, including “connected everything,” or the internet of things; social media; mobility; big data analytics; and cloud. These technologies can both help boost productivity by automating and streamlining business processes to make them more efficient and increase output per employee, as well as foster growth through the creation of new products, services and business models that appeal to customers in domestic and foreign markets alike.

The EU is actually in a favourable position to capitalize on digital’s potential. Its strong legacy of innovation, education system, and entrepreneurial spirit—not to mention significant adoption to date of digital technologies by consumers and businesses alike—give the region a robust foundation on which to build. In fact, examples abound of organizations across the EU—in manufacturing, banking, energy, public service, and healthcare—that already are using the power of digital to help them save millions of euros in operating expenses and launch new businesses generating millions of euros in new revenue. These enterprises provide a glimpse of how these technologies can dramatically improve business performance and, in the process, transform industries and entire economies.

EXECUTIVE SUMMARY

At the root of the challenge are three main factors:

PRODUCTIVITYThe EU is forecast to lag behind the US and China in labour productivity growth (real GDP growth per person employed).

INNOVATIONEU R&D intensity (as a proportion of GDP) is behind the US and, for the first time, China surpassed the EU in 2012.

REGULATIONThe fragmented regulatory environment is making it difficult for companies to boost productivity and innovation through the adoption of digital technologies at scale.

9

Yet these organizations have only scratched the surface of what is possible. To sustain and build on this momentum—and rise to the level of other economies—businesses andgovernments in the EU must create an environment in which digital technologies can flourish.

Businesses must embrace new principles and capabilities that enable them to fully exploit digital’s potential. At a high level, this means not just applying digital technologies to current offerings and business models to incrementally improve them. Rather, it means thinking completely differently about the business and what it could achieve: identifying the new customer-driven outcomes that digital makes possible, considering how the company’s business and operating models need to change to deliver these new outcomes, and then defining the combination of digital and traditional technologies, operations, and informationrequired to realise these outcomes. Making this mindset shift is fundamental to putting digital technologies and information at the heart of the business so they can drivesubstantially greater productivity and internal efficiency (and, as result, greatly lowered costs), as well as new levels of innovation that generates more robust growth.

For their part governments, working in concert with businesses, must address a number of key policy and regulatory issues to help pave the way for increased development and deployment of digital technologies. For instance, they must modernise and harmonise country-specific and cross-border regulations to encourage the uptake of digital technologies and solutions at scale. They need to focus on reducing unemployment and closing critical digital skills gaps through investments in new

education and training programs, as well as on enhancing the mobility of qualified talent within, and into, the EU.And they must further develop policies that nurture the current and coming generations of entrepreneurs and start-ups that will play a central role in Europe’s recovery through boosting innovation, the launch and development of new businesses and the creation of new jobs.

Businesses and governments alike also will need a way to understand how effectively they are executing their digital initiatives to illuminate what has worked and where opportunities exist. Thus, a final key to success is a methodology that measures the impact of digital on EU competitiveness—both from a country and industry perspective—against which progress can be evaluated and quantified over time.

Restoring growth and competitiveness to the EU economy will not be easy, as significant challenges still must be addressed. However, digital technologies offer significant promise as a tool to help the EU rebuild its economic future. The development and deployment of digital technologies at scale to address two of the critical elements of competitiveness—productivity and innovation—coupled with the implementation of new policies and regulations that foster the widespread adoption and use of such technologies, can serve as a powerful catalyst for transforming the EU economy.

THE BUSINESS AGENDA FOR EUROPE:

10

11

As European Union (EU) executives view the business landscape and shape their strategies for the future, they are feeling a growing sense of optimism about the prospects for growth in the EU. For example, in the recent Accenture survey of business leaders from across the EU conducted for this report, 53 percent of respondents believed the economies of the EU member states would improve in 2014. A higher proportion (60 percent) also believed thatthe EU economy would continue to improve in the next three years—a major increase over the 46 percent who held such a view last year (Figure 1). While this view is consistently held across most EU economies, there are divergent opinions in France and Belgium, where respondents were less positive (38 percent and 43 percent, respectively).1 These survey findings echo official economic forecasts for the EU, which see a continuation of theeconomic recovery, a strengthening of domestic demand, substantial improvements in public finance, and gathering momentum expected in investments.ii

Figure 1: How confident are you about Europe’s economic growth prospects in the next three years?

Business leaders also are remarkably positive about the ability of the EU to compete, with 61 percent of respondents indicating they considered the EU to be competitive internationally.2 Furthermore, when asked how they expect the international competitiveness of the EU to evolve in the next three years—assuming the current level of actions by businesses and policy makers—three quarters of respondents (74 percent) stated their confidence that the EU’s international competitiveness will at least remain at this level, with almost half of all respondents (47 percent) confident it will increase in the next three years (see Figure 2).

Figure 2: Based on the current level of actions by businesses and policy makers, how do you expect Europe’s international competitiveness to evolve in the next 3 years?

60%

31

3

7

5346%

33

3618

3

43

Very optimisticOptimistic

Pessimistic

Neutral

Very pessimistic

2013 2014

Source: Accenture European Business Summit Survey 2014

47%

26%

27%

Europe’s international competitiveness will increase in the next 3 years

Europe’s international competitiveness will decrease in the next 3 years

Europe’s international competitiveness will remain the same in the next 3 years


THE GROWTH AND COMPETITIVENESS CHALLENGE

1 Appendix: Q22 Appendix: Q3

12

This confidence, however, belies underlying problems that continue to plague the EU’s economies. Modest EU growth rates have not yet returned to historic trend levels and, infact, still fall short of the higher growth rates forecast for the BRIC economies as well as mature markets (see Figure 3). The International Monetary Fund (IMF) forecasts average developed-economy growth in 2014 at 2.2 percent, nearly double that forecast for the EU.iii Other forecast data highlight the continuing growth gap in the next few years with competing economies such as the United States and China (see Figure 4). Additionally, with few exceptions, unemployment is projected to remain stubbornly high across the EU member state economies, well above that of the US and China, during the next several years (see Figure 5). Economic recovery is expected to lead to only a minor positive impact on employment in 2014, but a more visible impact in 2015 and 2016.

The US, in particular, is gaining momentum, fuelled by low energy prices, greater labour market flexibility, and greater openness to innovation. For instance, research and development (R&D) investment in the US has been outgrowing that in the EU significantly— 8.2 percent versus 6.3 percent growth compared with the previous year (above the global average of 6.2 percent).iv This momentum is also evident in higher productivity growth. In 2013, productivity—output per hour worked—grew one-third faster in the US than it did in the EU area.v

In other words, while the growing optimism of EU business leaders is welcome, as is the forecast of a modest return to growth, significant challenges remain when one places thiseconomic improvement in the wider context of competing economies on the global stage.

-4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0

1.8%2.3%

2.9%1.5%

6.0%4.9%

7.2%7.7%

3.0%1.9%

2.7%1.9%

0.7%-0.2%

0.5%-1.9%

1.4%0.5%

0.8%0.2%

% real change pa

France

Germany

Italy

Spain

UK

US

China

India

Russia

Brazil

2014 forecast 2013 dataSource: The Economist Intelligence Unit 2013 data and 2014 forecast

Figure 3: GDP growth: Percentage change in real GDP, over previous year.

13

Figure 4: GDP growth per head – EU, United States, China and world 2011-2016.

Figure 5: Unemployment rate in EU, United States and China 2011-2016.

10

8

6

4

2

0

-2

% Percentage change in real GDP per head

2011 2012

8.9

1.71.4

1.3 1.4

7.2

1.4

2.0 1.81.6 1.7

0.9

6.9

1.8

6.6

2.0

6.5

2.1

7.3

1.1

2013 2014 2015 2016

-0.61.1

China World United States of America EU27Source: Economist Intelligence Unit Country Database 2014

-0.2 1.0

12

10

8

6

4

2

0

6.5

6.15.8 5.5

6.4

2011 2012 2013 2014 2015 2016

6.58.9

6.9 6.4 6.17.2

8.1

9.710.3

11.110.6 11.0 10.7

% Official unemplyment as a percentage of total labour force

China United States of America EU27Source: Economist Intelligence Unit Country Database 2014

14

THREE KEYS TO ADDRESSING THE WIDENING EU COMPETITIVENESS GAP

”A competitive economy is an economy with a consistently high rate of productivity growth. The EU must outperform its competitors in terms of research and innovation, information and communication technologies, entrepreneurship, competition, education and training.”

—The European Commissionvi

While the EU is slowly recovering from the recession and maintains a strong legacy position in a number of key industries (including Pharmaceuticals, Aerospace, Testing and Control Instruments and knowledge-intensive servicesvii), the Eurozone crisis has slowed the recovery process further. Thus, the gap in competitiveness with other major economies globally has continued to grow.

Policy makers, business leaders, academia, non-governmental bodies, and other interest groups have been debating—and searching for—responses to the challenges of growth and job creation in the EU. The survey carried out for this report highlights what business leaders believe would help the most. When asked which initiatives would most improve EU competitiveness in the next three years, leaders cited smarter regulation (41 percent), innovation resulting in the creation of new products and services (40 percent), and the adoption of new technologies to drive productivity (35 percent) as the top-priority initiatives. Other notable initiatives included easier access to credit and financing (34 percent), cheaper energy resources (33 percent), better education and training of the workforce (33 percent), and less-expensive and more flexible labour resources (31 percent).3

Indeed, productivity is a major challenge for EU economies. While labour productivity growth (real GDP growth per person employed) has been recovering in the EU with a 0.5 percent growth in 2013, and 1 percent and 1.2 percent growth forecast for 2014 and 2015 respectively, a comparison shows productivity growth below that in the United States in the forecast period (see Figure 6). China’s labour productivity, while still below that of the EU, isforecast to grow at four times the EU rate in 2014.viii

Figure 6: Labour Productivity growth in percent for EU, USA, Japan and China.

Productivity growth below that of the USAProductivity growth above that of the USA

China data: Conference Board Total Economy database, 2014

Source: EU Eurostat Economic Forecast, February 2014

EUUSAJapanChina*FranceGermanyItalySpainUnited Kingdom

1.2

1.6

1

NA

1.2

1.4

0.7

0.6

1.4

2015 Forecast

0.5

0.9

1.2

7.1

0.6

-0.1

0.8

2.1

0.8

2013

1.0

1.4

1.1

4.1

0.6

1.2

0.4

1.0

1.2

2014 Forecast

3 Appendix: Q5

15

“The nation that goes all-in on innovation today will own the global economy tomorrow.”

— Barack Obama, President of the United Statesix

Despite some areas of weakness, the EU boasts pockets of innovation capability4—especially in Sweden, Denmark, Germany and Finland—that match and exceed many countries globally (see Figure 7). Internationally, the EU continues to compare favourably to the leading economies (including Australia, Canada and all BRIC countries, which the EU leads). However, South Korea, the US and Japan have a performance lead in innovation over the EU. In addition to having a relatively larger skilled workforce than the EU, these three countries’ collaborative knowledge-creation between public and private sectors is better developed and enterprises in these countries invest more in research and innovation.x

Figure 7: Global innovation performance.

Some interesting trends emerge when you consider research and development (R&D) expenditure—another key indicator of innovation in an economy. The EU has set a headline target of 3 percent of EU GDP to be invested in R&D by 2020, as part of Europe 2020 Strategy. Yet comparing R&D intensity (R&D expenditure compared to GDP) for the United States, China and the EU is striking. China in 2011 already had a higher R&D intensity than Italy, Spain and even the United Kingdom, and has been growing its R&D investment at about 18 percent annually in the past 10 years. At current investment rates, China’s total spend on R&D is expected to surpass that of the U.S. by about 2022.xii

Of course, regulation continues to be an on-going challenge within the EU business community as well—particularly as it applies to digital technologies. As mentioned, 41 percent of executives said smarter regulation would most improve EU competitiveness in the next three years.5 An even greater percentage—46 percent each—indicated excessive regulation and lack of adequate EU policies due to the fragmented landscape of Europe were impeding the development of digital technologies in the EU. These were the two most frequently cited among all the prospective challenges covered by the survey.6 Perhaps an area of greater concern is the general lack of awareness among the business community towards EU policy on digital with 80 percent of respondents being either unaware of the Digital Agenda for Europe or having no awareness of the objectives and content.

The main conclusions from this is clear: To prevent the gap in European competitiveness from growing and to potentially begin closing it, business leaders and policy makers will need to urgently address two critical areas of competitiveness—productivity and innovation—while creating the regulatory environment needed to help the EU compete on a global basis.

South Korea

United States

Japan

EU

Canada

Australia

China

India

Russia

Brazil

South Africa 0,105

0,178

0,191

0,207

0,275

0,389

0,497

0,630

0,711

0,736

0,740

0,000 0,200 0,400 0,600 0,800 1,000

Source: Innovation Union Scoreboard 2014, Executive Summary

4 Innovation capability index measurement goes beyond R&D expenditures and includes other factors like human resources, research systems, public‐

private co-publications and intellectual assets.5 Appendix, Q56 Appendix, Q17

DIGITAL DISRUPTION:

16

17

A disruption of societies, industries and economies is underway as a result of the emergence and adoption of digital technologies. These include the internet of things, mobile computing, business analytics and big data, cloud, social media and other technologies like connected devices and sensor networks that have both reached critical mass and are working together to define the digital world (see “Five key digital technologies”). They are forces of change,creating opportunities that previously were either technically impossible or uneconomical. In fact, examples abound of how connected vehicles, connected workers, digital factories, intelligent pipelines, smart grids and many other applications of digital technologies are transforming products and services and the way people work.

In fact, an overwhelming majority of business leaders believe digital technologies will play an important or a critical role in boosting EU competitiveness (96 percent), EU economic growth (93 percent), and EU job creation (83 percent) in

the next three years.7 With the impact of traditional levers such as fiscal and budgetary policy currently limited, the EU finds itself in a unique set of circumstances in which digital presents itself as a powerful lever that can be effectively used to bridge the ever-widening competitiveness gap. Digital technologies can make processes more efficient and reduce operating costs while creating substantial new growth opportunities through innovation in products, services and new ways of reaching customers.

Furthermore, business leaders expect digital to have an immediate and profound impact on their industries in the short term. Sixty-two percent of respondents believe that digital will result in major change or a complete transformation of business models in their industry inthe next 12 months, and almost two-thirds (63 percent) are concerned they will lose customers to competitors if they do not embrace technology in that timeframe (see Figure 8).

Total

62% 63%

Belgium

49%53%

France

52%46%

Germany

42% 45%

Italy

77%74%

Spain

71%

77%

UK

58%

82%

Other EU countries

72%

62%

Very concerned or somewhat concernedComplete transformation or major changeSource: Accenture European Business Summit Survey 2014

A CATALYST FOR EU GROWTH AND COMPETITIVENESS

Figure 8: Impact of digital technologies on industry business models in the next 12 months and concerns about losing customers if businesses fail to embrace digitally transformation over this period.

7 Appendix: Q7

18

Yet despite executives’ enthusiasm for digital, most European companies are not fully capitalizing on the full potential of digital. For instance, the major focus of executives’ digital investments to date has been primarily on driving efficiencies (60 percent) instead of making their products and services digital (40 percent).8 Additionally, a majority of respondents (54 percent) said the primary impact of digital technologies is to make processes more efficient and reduce costs rather than create substantial new growth opportunities through the development of new products and services and reaching customers in new and innovative ways (46 percent).9 There’s no question of the positive impact digital can have to drive process efficiencies and cost reductions. However, organisations must not underplay the capacity of digital technology to drive innovation and growth. Companies should consider allocating the balance of their current digital investment to better support their strategic growth agenda.

Figure 9:

Even as they express enthusiasm for digital’s ability to help improve EU competitiveness, business leaders fear the EU will struggle to compete with other major economies in digital adoption. While 51 percent think Europe is ahead of China in the development and use of digital today, 50 percent believe China will overtake the EU within the next three years.

Additionally, 61 percent believe that Europe lags the U.S. today, and more than half (53 percent) expect this to still be the case in three years’ time (see Figure 9).

51%

30%

11%

20%

38%50%

Now

EU compared with China regarding the development and implementation of digital technologies

EU compared with the US regarding the development and implementation of digital technologies

22% 24%

17%23%

61% 53%

In 3 years Now In 3 years0%

20%

40%

60%

80%

100%

0%

20%

40%

60%

80%

100%

Europe is/will be behind ChinaEurope is/will be level with ChinaEurope is/will be ahead of China

Europe is/will be behind the USEurope is/will be level with the USEurope is/will be ahead of the US


8 Appendix: Q108 Appendix: Q9

19

While Europe’s business leaders expect to see China’s ability to develop and implement digital technologies power ahead of Europe in the next three years, that does not necessarily equate to the level of competitive impact China can achieve through these efforts. At the same time, business leaders and policy makers should not underestimate the strength of the US and its capacity for innovation. It is likely the US will continue to maintain its healthy advantage over both Europe and China based on its proven ability to develop and implement technology-based innovation.

That said, there appear to be strong foundations in the EU on which companies can build in their pursuit of digital. For instance, when asked to identify EU’s most important strengths to help improve its competitiveness in digital, business leaders pointed to the large base of EU companies with international presence (49 percent), strong innovation capabilities (47 percent), highly-reputed educational system (38 percent), thriving entrepreneurship (35 percent), and strong local demand in both business (34 percent) and consumer (33 percent) markets.10

The education system in the EU is clearly considered to be a competitive strength. In fact, surprisingly, two out of three business leaders believe the EU currently has enough skilledworkers in digital (e.g., data scientists and engineers).11 However, 52 percent of business leaders said they plan to increase the number of recruits from outside the EU to fulfil the digital skill requirements for their own business.12 This suggests an expectation that demand for skilled workers in digital will outpace supply rise in the coming three years as competition for resources intensifies (see Figure 10).

In the near term, one course of action is to retrain and up-skill existing workers to meet the increasing demand for digital skills. When asked what initiative should be taken at the EU level to help address this issue, executives most frequently cited the use of technology to enable lifelong learning and development of skills (58 percent); promoting re-skilling/retraining programs for older age groups (51 percent); and promoting the direct involvement of business in the professional education system (51 percent).13

Figure 10: In the EU, there could be a shortfall of up to 900,00 digitally skilled people by 2015 at a time when average youth unemployment is nearly 24 percent.

0

100

200

300

400

500

600

700

800

900

2011 2012 2013 2014 2015

In ‘000

Digital jobs: vacancies and graduates

Vacancies in the digital sector New ICT graduatesSource: Accenture European Business Summit Survey 2014

10 Appendix: Q1811 Appendix: Q2312 Appendix: Q2413 Appendix: Q27

20

Looking further forward, business leaders believe a number of priority actions can be taken at the EU level to develop the digital skills of graduates and first-time workers to meetdemand. Educational programs with specific training on digital technologies and business (49 percent), developing entrepreneurial skills (45 percent), and promoting the direct involvement of business in curriculum development for the tertiary educational system (43 percent) were the top-ranked initiatives.14

A third element on which Europe can build is its entrepreneurial skills and culture, which business leaders across the EU recognise as key to success in the digital economy (59 percent deemed them important and 35 percent said they are critical15). And within this context, 87 percent of respondents said it is important or critical to foster closer collaboration between large corporations and entrepreneurs/SMEs for the EU to succeed in its digital transformation. Among the actions business leaders see as vital to fostering such collaboration are stimulating joint investment (cited by 60 percent), supporting the development of local clusters (57 percent), and supporting collaborative initiatives with universities and education (52 percent).16

Arguably the biggest asset that can fuel digital transformation in Europe is the fact that digital technologies already are pervasive across the EU’s consumers and businesses. Broadband penetration is at 95.5 percent across the EU and mobile broadband at 59 percent. There are more than 400 million unique mobile subscribers in the region, where smartphone penetration is at 49 percent. Nearly half of the population routinely purchases products or services online and more than 40 percent use eGovernment services. However, consumer activity varies widely across the EU with relatively low online purchases in Eastern and Southern European countries and cross-border activity lower still.xiii Many businesses are still reluctant to sell online and online sales are still a relatively small part of overall sales activity for many organisations.xiv This is reflected in the Digital Agenda for Europe, where the near term targets for cross-border online purchases and small and medium enterprises selling online still look far from being achieved.xv

Just as consumers are embracing digital technologies, a number of businesses and governments in the EU also are demonstrating how digital can help boost productivity andfoster growth.

On the productivity side, digital technologies are helping European organisations automate and streamline business processes to make them more efficient and increase output per employee—as these real-life examples illustrate:

• A major private Italian bank developed and deployed a mobile iPad® application to support personal financial advisors in their sales conversations with customers. The app provides the ability to take a real-time snapshot of customer accounts and incorporate this information into a presentation highlighting the bank’s investment products. As a result of using the app, the bank has increased the effectiveness of its personal financial advisors, eliminated costs associated with paper management, and boosted advisor productivity by minimising rework and repeat trips between the office and clients.xvi

• One hospital in Spain has deployed a technology solution for chronic disease management that includes patient segmentation, modelling, self-management, connected patient network, electronic medical record, telemedicine, and new roles and responsibilities for homecare, hospitals, and nurses. It is estimated that if this type of program were extended and applied at the European level, it could lead not only to better services but also to health management-related cost savings that could amount to ‐62 billion, or 5 percent of European governments’ health spendingxvii.

• In the energy sector, the United Kingdom is embarking on a deployment of smart meters, supported by mobile and analytics technologies, to more than 50 million electricity and gas meters.xviii The effort is expected to enable the UK’s energy producers to manage and analyse high volumes of meter data more effectively to help customers conserve energy and to enhance providers’ outage management processes with near real-time outage and restoration verification capabilities.

14 Appendix: Q2615 Appendix: Q2516 Appendix: Q36

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In terms of product and service innovation, digital technologies are enabling European companies to develop new and relevant products and services to sell to today’s digitally inclined customers, both in domestic and international markets. For example:

• A European carmaker launched a new range of connected vehicle services designed to meet the increasing wants and needs of drivers and passengers to have access to connected services in their vehicles. The services deliver the latest in-vehicle technologies providing consumers with entertainment and information, enhanced safety features, and seamless integration with their mobile devices. The company benefits through revenues from subscription fees from end customers for the connected services.

• A French bank adopted a cloud-based analytics solution that automates risk assessment to help it fulfil state-mandated obligations to provide short-term lending while managing credit quality. Ten days after rollout, the system was handling more than 300 loan applications worth more than ‐250 million.xix In effect, the analytics approach is helping the bank grow and is also enabling the bank to contribute to economic growth by providing liquidity to businesses while managing risk.

• A European tire manufacturer has created a solutions-oriented business for its commercial customers—based on selling “tyres as a service” with fees charged per kilometre driven—to complement its existing product-oriented business model (i.e., selling tires outright). The company uses data transmitted by the tires, combined with other metrics (such as fuel savings data and driving style), to optimise customers’ total cost of ownership.

With high penetration rates across broadband, mobile and smartphones, extensive use of eGovernment services, and strong digital initiatives already under way in many European companies, the EU is in a good position to build on this progress. However, to sustain this momentum and succeed in rebuilding competitiveness in both the short and long term, Europe’s business and policy makers must take urgent steps to convert the region’s digital potential into higher levels of productivity, innovation, and growth to ensure the EU can become a leader in a new era of digital business.

22

Music, books, art, maps, the ways we communicate—these and countless other things that used to be primarily physical or analogue are now digital as well, and that has changed the ways we live, work, learn and play. But that is just the tip of the iceberg. Today, technology is enabling the digitisation of almost everything. Five such technologies are particularly influential in transforming the lives of consumers and the organisations that serve them.

CONNECTED EVERY-THING – THE INTERNET OF THINGSConnected devices of all kinds and sensors integrated nearly everywhere have tremendous potential to enable new ways of automated and personal interaction. They allow businesses and public sector organisations to manage assets more effectively; optimise performance and improve operational efficiency (through, for instance, better supply chain tracking and management); and create new business models and lines of business.

MOBILITYMobility simply used to be another forum for enterprises to deliver information—that is, develop an application that would let employees (and later, customers) use a browser to navigate through company data on a mobile device. Now, mobility enables companies to do so much more. Companies can use mobility to optimise business processes, simplify tasks and enable employees to be more productive. And they can use it to improve user engagement—interacting with customers and prospects no matter where they are—and create new revenue streams for their businesses.

FIVE KEY DIGITAL TECHNOLOGIES

23

BIG DATA ANALYTICSUsing sophisticated analytics, European businesses, government agencies and other public service organisations can generate deep insight from the data they collect—insights that can help them improve their business in a myriad of ways. For instance, analytics can increase growth by helping companies understand and reach new customer segments more effectively. It also can drive operational excellence by helping to identify ways to improve key business processes and enhance workforce skills.

CLOUDCloud computing can improve the economics of IT for companies and governments, as well as provide greater operational flexibility and responsiveness. It also enables organisations to shift to operational costs and entirely new business models, including flexible “pay-as-you-go” service models.

SOCIAL MEDIASocial media excels in its ability to personalise interactions with customers and support new ways of interacting within and outside of the organisation. Social media can be a powerful tool for helping European companies keep in tune with changing customer demands and behaviours, as well as serve as an efficient channel for reaching today’s digital consumer —especially those in fast-growing markets.

24

THE DIGITAL RE-INDUSTRIALISATIONOF EUROPE

25

THE DIGITAL RE-INDUSTRIALISATIONOF EUROPE

As noted earlier, Europe is well positioned to benefit from the digital revolution. The region has a strong corporate base (it is home to 14 of the world’s 50 largest companies by market capitalisation) with a significant innovation capacity. Europe also boasts a significant number of entrepreneurs and young businesses, (which account for half of the jobs created in Europe each year),xx that tend to be experienced with and receptive to the use of a wide variety of technologies. European consumers are similarly sophisticated and open to innovation—they are asking for and actively using digital technologies in their daily lives.

And the high esteem in which the education system in Europe is held is one of the most important strengths that will help to improve digital competitiveness in the EU.17

But while the impact of digital is being felt everywhere, the real change has barely started. The power of digital is in the interplay of the different technologies. It is not about social media, but the potential for social collaboration at any time or place. It is not about using analytics to create a better marketing campaign, but leveraging enterprise data across the whole supply chain. It is not about smart tollgates on motorways, but the opportunity to use the data from millions of real-time traffic movements and from road sensors to help optimise traffic flows across a whole region. It is not about online back-up, but giving a young business access to near-unlimited computing power that years ago only massive organisations could afford. It is about helping to solve everyday challenges for citizens, consumers and organisations in new ways based on new combinations of information, resources, and technologies.

To illustrate this, we explore how specific digital technologies are helping to transform five key sectors of the European economy—and further demonstrate the potential digital has to rebuild competitiveness and create economic growth across the EU.

17 Appendix: Q18

26

MANUFACTURINGThe manufacturing industry is arguably the “engine” of the European economy. A strong industrial base is essential for Europe’s recovery and long-term competitiveness, growth and job creation.xxi Digital technologies offer manufacturers a variety of opportunities to close the competitive gap. Industry 4.0, a ground-breaking approach to production with digital technologies as its foundation, promises to usher dramatic changes into the industrial world and serve as a catalyst for the reindustrialization of Europe (see Figure 11).18

Billed as the fourth Industrial Revolution, Industry 4.0 is poised to combine classic production techniques with cyber-physical production systems (CPPS), leading to thecreation of an “Internet of things, data, and services.” Industry 4.0 represents a tectonic shift from centralised to decentralised production. This means that industrial production machinery no longer simply “processes” the product, but that the product communicates with the machinery to tell it exactly what to do.

Decentralized intelligence helps create intelligent object networking and independent process management. The interaction of the real and virtual worlds represents an entirely new way of approaching the manufacturing and production process. Industrial processes, for example, can be made more efficient by connecting them to the Internet in a “Smart Factory.” Cyber-physical production systems also signal a paradigm shift from existing business models, as revolutionary new applications are developed, new service providers emerge, and new value chains become possible.

The new and intelligent products, embedded in intelligent networks, can be harnessed to spin off a host of new business models. The horizontal integration of these intelligent products and networks can also help expand the value chain.

Figure 11: The fourth Industrial Revolution.

4. Industrial Revolution based on Cyber-Physical Production Systems

3. Industrial Revolution through introduction of electronics and IT for a further automatization of production

1. Industrial Revolution through introduction of mechanical production facilities powered by water and steam

2. Industrial Revolution through introduction of mass production based on the division of labour and powered by electrical energy

Cyber physical systems combine communications, IT, data and physical elements using the following core technologies:• Sensor networks (receptors)• Internet communication infrastructure (IP)• Intelligent real-time processing and event management (CPUs)• Actors for mechanical activities• Embedded Software for logic• Big Data and Data Provisioning• Automated operations and management of system activities

Industry 4.0

Industry 3.0

Industry 2.0

Industry 1.0

End of 18th Century Start of 20th Century Start of '70s Today

Degr

ee o

f Com

plex

ity

Source: Accenture analysis

18 Accenture, “Digital Industry 4.0”, 2013

27

Companies can up the ante from merely producing intelligent devices to adding more value by coupling the product with a host of services brought about by the deep analysis of data. New big data processing technologies allow the analysis of large amounts of data collected from digitized products and networked sensors. They can also help accelerate the entire data cycle from insight to action, enhancing the enterprise’s ability to deal with data velocity.

For example, Trumpf GmbH, a German producer of intelligent machine tools and industrial laser systems is taking the next step beyond efficiently manufacturing its machines.xxii Instead, Trumpf is interested in mining the information provided by the machines, to gain deeper, actionable insights and to network machines in an intelligent way to create smart factories. In this way, they autonomously exchange information, trigger actions, and control each other, improving productivity and speed and reducing costs.

At Trumpf, networking has already advanced greatly. Apart from a cloud-based platform for remote diagnostics, there is the Trumpf software for production control, which takes the inventories and the urgency of order processing into account and allows the production status to be remotely monitored via an app. According to Trumpf, all of its Industry 4.0 activities are designed to further increase its machines’ productivity, making better use of resources and thereby helping to improve the performance of Trumpf’s customers.xxiii

The common denominator enabling Industry 4.0 is greater leverage of industrial software. Driven by the continuous need to reduce costs and increase process transparency and flexibility, manufacturing companies increasingly embed industrial software in their installed machine base. This enables them not only to better manage the entire automation processes, but also creates new opportunities to transform their current business models from one focused on making products to one that is oriented toward providing solutions.

Four solutions, in particular, are poised to support the entire set of operations along the value chain in an integrated manner, adding value in the process. One solution is nextgeneration corporate optimization and

execution systems that can help manufacturers drive down costs. Enterprise Resource Planning (ERP) systems already provide many applications, from customer relationship management (CRM) to sourcing, manufacturing and forecasting. Future ERP systems will leverage in-memory computing, advanced Web portals and cloud computing, thereby offering all the entities along the supply chain access to real-time data and need-based data processing. Benefits include lower capital expenditure, reduced costs and quicker implementation. By harnessing the cloud skilfully, companies can also enter completely new businesses or quickly launch new products.

Crowdsourcing is another solution that can help manufacturers to further leverage the power of social media to boost innovation. As several successful innovators have learned, opening up the innovation process to the collective wisdom of ‘the crowd’ can dramatically increase the odds of coming up with the next big idea before someone else does. It is possible that the future will see entire parts of the supply chain outsourced to an undefined, anonymous ‘crowd’ using technologies such as the Internet.

A third solution is next-generation 3-D printing. This powerful tool is likely to be one of the leading technologies in the future that will significantly change the way products are developed, produced, delivered and serviced. Consumers may have the opportunity to design products on their own personal computers or co-design them with companies using the Internet, producing them within the confines of their own homes. With further refinement in technology and a reduction in printing costs, 3-D printing could render an entire phase of traditional supply chains obsolete.

Finally, Product Lifecycle Management (PLM) can have a major impact on manufacturers’ operations by helping them organize, develop and manage new products and services throughout their lifecycle. Integrated PLM—which closes the loop between product usage and engineering, and provides a foundation for collaboration among engineers and other experts around the globe—can enable manufacturers to get products to market faster and more efficiently. Manufacturers using PLM have increased the speed of product launches by up to 55 percent and reduced operational and product development costs by 10 percent to 30 percent.xxiv

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BANKINGWhile banks in the EU are recovering from the downturn, growth is slow and profitability remains low. The return on equity (ROE) at the average large EU bank in the first half of the 2013-2014 financial year was 8.2 percent, compared with 8.7 percent for the United States. ROE of large EU banks is forecast to remain below 10 percent in 2015.19

Digital offers a multitude of benefits for banking institutions that can help them achieve stronger growth and profitability—including cost containment through automation, risk management, increased revenues through new digital products and services, enhanced quality of services through digital channels, and ultimately increased profitability (an estimated ROE uplift by 3.8pp through technology-enabled business transformationxxv).

A French bank for example, adopted a cloud-based analytics solution that automates risk assessment to help it fulfil state-mandated obligations to provide short-term lending while managing credit quality. Ten days after rollout, the system was handling more than 300 loan applications worth more than ‐250 million.xxvi In effect, the analytics approach is helping the bank to grow and is also enabling the bank to contribute to economic growth by providing liquidity to businesses while managing risk.

Despite such benefits, however, EU banks appear to be slow in adopting digital. Across Europe, retail banks have only digitized 20 percent to 40 percent of their processes. In addition, 90 percent of European banks are investing less than 0.5 percent of their total spending on digital.xxvii

Making their outlook worse is the aggressive entry of non-banks with digital innovations such as mobile and online payments, and capturing a growing part of the banking value chain. By being slow to embrace digital technologies, banks risk being consigned, by digitally enabled competitors from other industries, to a limited role as utilities. Bank-customer loyalty has also become more tenuous (on average, 20 percent of banking customers switch banks or banking products each yearxxviii). Together, these factors could have a devastating impact on banks’ customer bases.

To avoid being relegated to a form of utility banking, where they become a back-office function for their customers, banks must innovate through digital products and services to fight back and gain new market share. It is estimated that 40 percent of revenues and 55 percent to 60 percent of operational processes in the average financial institution, could be impacted by technology.xxix Up to two-thirds of the profitability uplift required by banks to be in the high performer category is linked to technology-led transformation (see Figure 12).xxx

Figure 12: For a bank, up to two-thirds of the profitability uplift required to be a high performer could come through technology-led transformation.

Technology Enables business transformation ROE uplift

5.7

Strategic costreduction

12.0

Asset qualitynormalization

ROE potential2012

2.82.6

1.9

0.90.21.3

Regulatoryadjustment

1.3

Momentumgrowth

Balance Sheetefficiency

0.6

Delivering performance improvement through technology enabled change

Business transformation & Economic ROE uplift

Source: Accenture analysis

19 Accenture, “Technology that matters, Harnessing the technology wave in banking,” 2013.

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Payments are the primary touch point with banks’ customers and account for up to 25 percent of the typical bank’s revenues. Right now, banks have vast amounts of big data—information clarifying where people shop, how much they spend, and what they use to make payments. If they lose that to alternative providers, they lose customer insight and customer touch points. But they are beginning to fight back.

BNP Paribas Fortis, SA/NV, for example, has teamed up with Belgium’s largest telecom company and Accenture to create Belgium’s first mobile wallet. It will allow consumers to use their mobile devices to purchase goods or services, redeem coupons, or use their loyalty cards when visiting the mobile application of participating merchants. It is not just a mobile payments tool; they are creating a commerce “ecosystem” for Belgian merchants and consumers. Theprogram is currently in the pilot stage with major Belgian merchants.

In mature markets, where banks have been busily cutting costs for five years, they are now using digital for growth. Accenture estimates that if a bank can shift a customer fully from physical branches to a digital platform, it can reduce costs by around 70 percent. But a bank also can provide value-added digital products to its customers to grow both revenues and market share.

For instance, Lloyds Bank plc analyses its data to offer cash back for goods and services that its customers buy using their debit cards, all based on customers’ past spending habits and merchant promotions. T. Garanti Bankası A.S. (Garanti Bank) in Turkey has designed a highly sophisticated mobile banking app that uses GPS data and analytics to provide customers with discounts relevant to the stores they happen to be passing by. It also helps them manage their money based on past spending behaviour and withdraw cash using their mobile phones. Barclays Bank PLC’s number-one digital avenue for attracting new customers has caught on quickly amongst young people in the UK. The service, called Barclays PingitTM App, allows customers to transfer money to one another using a mobile phone.

All these digitally enabled products will help generate growth and protect customer relationships because they allow banks to become more a part of people’s everyday lives, not just a utility for processing transactions and holding deposits. Following the financial crisis, governments in mature markets are encouraging competition in banking. That will include efforts to make it easier for customers to switch providers. Banks know they need to improve their image with customers. With digital products and services, they have an opportunity to differentiate themselves, not least through establishing these innovative services with leaders in other industry sectors.

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ENERGY AND UTILITIESEnergy costs are a critical component of competitiveness for EU-based companies, particularly for manufacturers in energy-intensive industries, which account for about 25 percent of industrial employment and 70 percent of industrial energy use, according to the International Energy Agency20. In 2011, the EU was the world leader in the production of energy-intensive goods with a 36 percent market share, far outpacing other countries such as the United States (10 percent), China (7 percent), and Japan (7 percent).xxxi Today, this leadership position is threatened by the disparity in energy costs between EU and othercountries. In fact, partially because of their lower energy costs, the US and key emerging economies are expected to see a rise in export shares of energy-intensive goods up to 2035, while EU and Japan are likely to see a sharp decline. (See Figure 13)xxxii.

Figure 13: The United States and key emerging economies are forecast to increase their share of energy-intensive goods, while the EU and Japan are likely to see a sharp decline.

As it is unlikely that the EU will be able to compete with the United States on energy costs in the foreseeable future, it needs to become more energy efficient and take fundamental market model decisions regarding fuel mix, interconnection, the EU Emissions Trading System, and capacity remuneration to optimize the overall energy system. Digital technologies can play a role in helping the EU’s transition to this ‘new energy architecture’.Technologies such as smart grids, smart metering and analytics can help make the EU a world leader in energy efficiency and intelligent, distributed energy, compensating to some extent for the EU’s energy cost disadvantage. These technologies also provide opportunities for global leadership in high-value exports of energy technology.

In fact, 58 percent of European business leaders believe digital technologies are important to enabling access to competitive energy and 56 percent agreed they are important to improving energy efficiency. Just over one third said digital technologies are critical to addressing both of those issues (see Figure 14).

Figure 14: Digital technologies will be key to address key energy challenges Europe is facing.

How important are the digital technologies (connection of renewable energy to efficient smartgrid, smartmetering) to address challenges Europe is facing?

European Union

-10

36

Japan

-3

7

+3

China

7

+2

Middle East

3

+2

India

3

USA

10

+1

Export share in 2011 Expected changes for 2035 in ppSource: Accenture, IEA, WEO 2013

Critical

Important

93%

35%

58%

92%

38%

56%

Access to competitive energy Energy efficiency


20 International Energy Agency (IEA), “World Energy Outlook, 2013”.

31

Adoption of technologies such as smart grids, smart metering and analytics can help make the EU a world leader in energy efficiency and intelligent, distributed energy, compensating to some extent for the EU’s energy cost disadvantage. These technologies also provide opportunities for global leadership in high-value exports of energy technology.

Business leaders believe there are three key priority actions that should be taken at a European level to boost the adoption of digital technologies to address energy challenges in the region: the promotion of energy efficiency (cited by 73 percent); support and investment in Smart Grids (61 percent); and support and investments in renewables (60 percent) (see Figure 15).

Figure 15: Digital technologies will be a key driver of energy efficiency.

What priority actions should be taken at European level to boost the adoption of digital technologies to address energy challenges in Europe?

Smart technologies, in particular, hold massive promise. Smart grids can convey real-time information on the state of the grid and, in conjunction with advanced analytics, help reduce electricity waste, spending on monitoring and diagnosis of network problems, and maintenance costs. They also are key enablers of distributed energy generation (for example, district heating and cooling systems and photovoltaic (PV) panels), which allows for more responsive demand management and a reduction in transmission and distribution (T&D) losses. The European smart grid market is projected to be worth more than $82 billion by 2020, and represents 20.6 percent of the global smart grid opportunity.xxxiii Amongst a majority (60 percent) of energy executives globally, analytics solutions will be the highest-priority smart grid investment for their company in the coming years.xxxiv

Similarly, smart metering deployment can help energy producers manage and analyse high volumes of meter data more effectively while providing customers with detailed energy usage data—which in turn, results in decreased peak energy consumption and electricity bills. By integrating the meter data management system with existing utilities network management systems, an energy company can enhance its outage management processeswith near real-time outage and restoration verification capabilities.

While new technologies are an important component of driving energy efficiency, there also needs to be a fundamental change in industrial, commercial and residential consumer behaviour to encourage them to be more proactive about the way they manage their energy use. From a residential perspective, mobility, combined with products such as NestTM home automation products and services (recently acquired by Google, Inc.), can help consumers regulate energy use when they are out of their homes, thus reducing overall consumption.

Of course, there is no single pathway to this ‘new energy architecture’. However, the most effective approaches all share several common features, including a long-term approach to energy policy that helps to support investor certainty; low-carbon fuel mix with base-load hydro and nuclear power-generating capacity; and energy efficiency across industrial, commercial and residential sectors.

73%

61%

60%

53%

52%

Promote energy efficiency

Support and invest in Smart Grids

Support investment in renewables

Support and invest in storage technologies

Support the development of new transportation modes (e.g., Electic car)

Ranked within top 3

Sample base = All respondents (N=513)


32

PUBLIC SERVICESPublic services are a crucial and substantive component of the EU economy, accounting for more than 50 percent of GDP across the EU as an average. That gives Europeangovernments’ significant leverage in orchestrating economic activity as well as creating strong foundations for competitiveness and growth. However, doing so will require significant effort, both within public service to increase productivity, as well as innovation through the public service to create ripe conditions for businesses and citizens to thrive.

Political and economic realities such as an aging population, high unemployment, cyber security, and environment sustainability—all against the backdrop of fiscal tightening—are putting enormous pressure on public services. In addition to this, citizens’ expectations fromtheir governments have risen significantly in recent years, encouraged in part, by their experiences with the private sector, such as banking, consumer goods, media andentertainment services. Citizens and businesses are consequently expecting better and more personalised services, multichannel and ubiquitous access, real-time information, increased transparency, and participation.

The public service ecosystem is changing dramatically as well. Disruptive technological trends like social media and collaboration, mobility, analytics, big data, and cloud arecreating a paradigm shift in how people live, work and interact. European Governments will need to fully embrace this if they want to be seen as relevant and in touch with citizens.

This is also a clear expectation from business leaders. As shown in the survey carried out for this report, when asked how confident they are that public services in Europe will be able to leverage digital technologies to improve the quality of service to citizens and businesses in the next three years, 68 percent of respondents were optimistic, while 32 percent were pessimistic (see Figure 16).

Digital technologies can help public service organisations in a number of ways. For starters, integrated online portals—underpinned by cross-agency data sharing and providing a “onestop shop” experience for all citizens’ requests—such as taxes, pensions and benefits—can help drive significant

cost efficiencies through self-service and automation, while providing a much higher quality of service. Such an improvement would be welcomed by citizens. On a global level, according to a separate survey in 2012, 46 percent of citizens would prefer a single website to deal with the government.xxxv A significant element of the portal is the ability for organisations to personalise services to meet citizens’ specific circumstances and needs.

Figure 16: Digital technologies will support the improvement of public services.

How confident are you that public services in Europe will be able to leverage digital technologies to improve the quality of service to citizens and businesses in the next three years?

At the same time, digital fosters and supports the transformation of public-services delivery by allowing new types of partnerships across public, private, and third-sector actors. Through much stronger integration of data, using common and open standards and being device- or channel-agnostic, digital offers fundamental shifts in the interaction between governments and citizens as well as businesses to create a seamless experience. For example, in the future, citizens should be able to access, in real-time, individual pensions holding through a portal, which could indeed be co-managed by public and private sector. In this co-production model, the citizen has access to updated pensions information, but can also correct and modify personal data. Digitally skilled officials could be on stand-by for exception handling, via chat or other remote technologies, to guide the user through to service fulfilment.

Very optimisticOptimistic

65%

29%

3%

6%

62%

PessimisticVery pessimistic


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Social networking and mobility provide the platform to further engage citizens and create participative democracy. In fact, overall, 64 percent of citizens already use social media or would like to use it in the future as a means of interacting with their government (see Figure 17).xxxvi In return, they call for Governments to be more responsive and accountable. Crowdsourcing initiatives encourage citizens to discuss and debate issues or voice their concerns, exchange information, petition governments to make improvements in public services, and even to work together to improve the quality of life in their communities.

Figure 17: Adoption of social media by citizens.

The co-design and co-delivery of public services with stronger ownership and participation of recipients of these services will lead to a repositioning of public services, whether it is with “government as a platform” or “new public movement” initiatives, but in any case enabledby digital. For example, through labour market analytics solutions governments would be better placed to forecast future supply and demand of skills and, as a result, be able to facilitate much higher-quality matching between vacancies and skills, target investment in educational programs to address skills shortages, and thereby improve overall competitiveness of industry. In taxation, such tools help reduce fraud and errors, identify revenue leakage opportunities, and reduce costs through streamlined operations or crossagency collaboration.

Finally, digital technologies can help public service organisations solve the “public productivity puzzle” and deliver better outcomes for the same or lower cost. For instance, a Digital Efficiency Report commissioned by the UK government found that the average cost of a central government digital transaction can be almost 20 times lower than the cost of one done by telephone and 50 times lower than one executed face to face.xxxvii In Portugal, an initiative called “Zero Licensing” spearheaded by the agency for administrative modernization (AMA), was able to reduce the time to start a business to just one day frommore than 30 days.xxxviii The impact of efficiency improvement on the bottom line is significant: One percent annual productivity gains would amount to cost savings of US$180 billion in France, US$190 billion in Germany, and US$140 billion in the United Kingdom.xxxix

At a macro level, digital can drive significant benefits for public services organisations. Accenture’s research and analysis shows that adoption of digital technologies in government brings substantial benefits to society and the economy: A 1 percent increase in digitization (in the economy) correlates with a 0.5 percent gain in gross domestic product level, and a 2 percent increase in international trade levels. Increasing digitization also has a positive impact on addressing social challenges: A 10-percent increase in digitization correlates with a drop of 0.9 percent in the unemployment rate.xli

Overall, our research tells us that an enthusiastic adoption and facilitation of digital technologies could improve overall productivity, transform the relationship between citizens and governments and play a major role in economic growth and competitiveness in Europe.

64%

of citizens stated they already use social media or would like to use it in the future to interact with their government.

Source: Accenture, 2014

34

HEALTHCAREHealthcare is already a major public-spend item in most European countries and will become unsustainable if not urgently addressed. People are living longer and often face multiple health conditions that require long-term care. In some countries, a small minority of the population with serious, long-term medical conditions accounts for more than half the healthcare budget. Increasingly, life diseases such as obesity will put pressure on providers as the range of healthcare requirements becomes even more diverse.xlii

Patients want access to top-quality healthcare, which means governments will need to make healthcare reformation a priority if they are to provide equal, accessible and affordable care. In the current economic climate, they will need to find ways to not only maintain but improve patient outcomes at a lower cost.

The answer for Europe lies in transforming the way that health services are provided and managing legal, business, credit, political and strategic risks proactively.

Digital tools can play a major role in this effort, as they can help promote wellness and preventive care to reduce the incidence of costly treatment for chronic diseases, deliverbetter treatment outcomes, and cut overall operating costs. These tools include remote patient monitoring, proactive health, fact-based personal analytics and coaching, patientmonitoring and education, disease management, and home health. Mobile platforms are also enabling, through smartphones and tablets, the adoption of greater patient access to healthcare on a “do it yourself” basis, as well as telemedicine solutions for chronically ill patients.

Technological innovation is also fostering organisational changes—such as “connected health” and integrated healthcare service models—that are enabling providers to deliver more cost-effective services and better quality of care. In this scenario, health management efficiencies and improved care integration may be found by integrating treatments amongst community-based care, primary care, hospitals, nursing homes and other providers, rather than silos.

Many telehealth pilot programs, for instance, have reported success in reducing the number and length of hospital stays and emergency visits (as well as increasing patient satisfaction). One of these, a three-year telemonitoring pilot in the United Kingdom across three sites, has resulted in a 45 percent reduction in mortality rates, a 15 percent cut in emergency visits, a 20 percent drop in emergency admissions, and a 14 percent cut in number of bed days of care.xliii

Predictive analytics may potentially enable interventions ahead of long-term hospital admissions and may ensure that the right facilities are available to meet future public needs. Health Information Technology (IT) systems with telehealth techniques that remotely monitor patients’ vital signs, may also facilitate new care-models. Innovative payment structures that reward outcomes rather than activity may also be prudent.xliv

In Spain, for instance, Osakidetza, the Basque public health service, deployed a technology solution for chronic disease management that included patient segmentation, modelling, self-management, connected patient network, electronic medical records, telemedicine, and new roles and responsibilities for homecare, hospitals, and nurses. This holistic approach to tackling the challenge of chronic diseases in the Basque Country generated ‐59.5 million in cost savings in 2012 (see Figure 18). In addition, pharmaceutical prescription costs have decreased by 2.5 percent.xlv

35

It is estimated that if Osakidetza’s programme was extended and applied at the wider European level, it could lead not only to better services but also to health management-related cost savings that could amount to ‐62 billion, or 5 percent of EU governments’ health spending.xlvi

In Valencia, Spain, digital technologies are the foundation of a health management solution that enables La Fe Hospital to address multiple population segments, with a particular focus on the “top of the population pyramid”— the 17 percent of the patients who drive approximately 60 percent of the total health system’s expenditure. Use of predictive analytics along with case management could help a region like Valencia reduce its total health expenditures by approximately 10 percent.

Transitions in healthcare delivery will bring with them their own new challenges for public and private healthcare providers and payers, which may include cost pressures relating to advances in healthcare technology, or regulations protecting patient information. Digital technology is, however, a key lever that could help to lower costs and help improve the productivity of Europe’s healthcare systems. Digital health information is a critical requirement, and “one patient, one medical record,” must become the industry’s mantra. Through connecting the fragmented healthcare information, a single view of the patient becomes possible allowing for efficient allocation of resources required for quality care and effective cost management to reduce overall country spend.

Figure 18: Cost savings in chronic disease management in the Basque public health service in 2012.

59.5 million in health cost savings through

Patient Segmentation

Modelling

Self-Management

Connected Patient Network

Electronic Medical Records

Telemedicine

New roles and responsibilies forhomecare, hospitals, and nurses

Source: Accenture client experience

SEIZING THE OPPORTUNITY

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As the preceding sections have demonstrated, digital technologies offer tremendous potential for organizations to dramatically improve their performance and the overall economy of the region. This is something the European Commission recognized in adopting the Digital Agenda for Europe, as part of its Europe 2020 growth and jobs strategy.

Yet the only way the EU can realize the promise of digital as an accelerator for competitiveness and growth, is if businesses—large and small—and governments work closely together to create an environment in which digital technologies can flourish. To that end, we have identified a number of key actions businesses and governments should take to help pave the way for increased development and deployment of the digital technologies that are crucial to improving their own and the region’s competitiveness.

Of course, the EU is made up of many countries, industries and businesses all starting at vastly different points of the journey, which means a “one size fits all” strategy is neither advisable nor practical. Combined with this, countries and industries are emerging from the recent crisis at different speeds with some needing to do more to accelerate their progress towards adopting best practice. And there are a number of important challenges that need to be addressed, by both businesses and governments, to seize the opportunity and create a foundation for renewed growth and prosperity.

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BUSINESS RECOMMENDATIONSAs an economy’s competitiveness is, amongst other things, an aggregate of the competitiveness of its businesses, business leaders in the EU have a defining stake in creating prosperity through transforming existing businesses into digital businesses and creating new digital enterprises. We refer to a digital business as one that achieves growth and results by creating unique customer experiences through new combinations of information, business resources, and digital technologies.xlvii

In pursuing their own strategies for renewal in a digital world, companies in the EU should concentrate on using digital technologies in two critical ways. The first is to increase productivity and internal efficiency to reduce costs. This includes improved process efficiency, better asset utilization to optimise production and inventory costs, a more responsive organisation to reduce the cost to serve and implementing new cost models like self-service, and reduced time spent on non-selling activities. The second is to generate new levels of innovation and growth by better serving customers and consumers demanding new products, services, and better experiences. This includes defining digital business strategies that target new business outcomes, the development of new and improved products and services, new and optimised channels to customers, efficient expansion into new markets, and new pricing and earnings models to maximise profitability.

A digital business can create revenue and results by using innovative strategies, products, processes, and experiences. Being digital requires the adoption of four key principles:

• Growth tends to come through customer experiences and relationships that adapt to their customer dynamics and demands.

• Operational results can be delivered via new combinations of information, processes, channels, and workforce abilities that leverage new high-performance business and operating models.

• Information is at the centre of the business model. It is usually the basis for differentiating customer experiences and the fuel for more efficient operations that deliver these experiences.

• IT infrastructures become digital platforms. Companies may not be able to realise digital ambitions if they continue to be shackled by the cost, complexity, and limited capacity of their legacy infrastructures. A digital business platform supports a diverse set of customer and operational requirements with a single set of resources.

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In addition, success in digital requires businesses to develop eight foundational digital capabilities:

• Strategy and governance, which focuses on how the company develops strategy that is aligned within business functions; evaluates opportunities to generate new areas of growth throughout the business; and makes, evaluates, and enforces decisions across the enterprise.

• Organisation and collaboration, which involves how the company organises resources and responsibilities to achieve business goals; fosters collaboration among teams in their daily work; and builds the capacity to enhance the workforce and its abilities.

• Customer experience and interaction, which includes how the enterprise interacts with its customers and incorporates digital solutions in creating unique and marketmaking experiences.

• Technology and platforms, which concerns how the enterprise leverages digital technologies and platforms to generate business results.

• Information and insights, which targets how the company leverages information in products, services, experiences, and company decisions.

• Growth and innovation, which considers the agility with which the enterprise uses innovation and operations to define new and uniquely valuable products and services and take them to market.

• Operations and ecosystem, which concentrates on the efficiency and effectiveness of operations and the business ecosystem.

• Security and privacy, which involves how well the company controls and secures business and customer data, information, and intellectual property.

Critically, executives need to recognize that an organisation that simply applies new digital technologies to existing products and services is not the same as a digital business. These applications can represent important steps forward. However, they will not be sufficient to capture the digital growth opportunity or address disruption from more digitally sophisticated competitors. Companies should identify the new customer-driven outcomes that digital makes possible, consider how their business and operating models need to change to deliver these new outcomes, and then define the combination of digital and traditional technologies, operations, and information required to realise these outcomes.

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POLICY RECOMMENDATIONSIn parallel, EU governments, policy makers and businesses must help create the vision and put in place the enablers for the digital transformation of the economy, to drive productivity, innovation and growth and accelerate a return to competitiveness. This includes improving the regulatory environment for digital uptake, addressing the digital skills’ issue, and fostering growth and innovation through entrepreneurship.

IMPROVING THE REGULATORY ENVIRONMENT FOR DIGITAL UPTAKE

As highlighted earlier in the report, 41 percent of executives surveyed believe smarter regulation will make Europe more competitive.21

When it comes to digital, this means addressing the current fragmented regulatory environment faced by businesses operating across the EU, which is preventing the uptake ofdigital technologies and solutions, at scale, and thus limits the full potential of the digital single market. It has been estimated that Europe could gain 4 percent of GDP by fullydeveloping the digital single market by 2020 (based on 2010 figures).xlviii

If we look at the adoption of cloud computing in the EU, the current regulatory—and particularly data protection—framework poses several barriers, for both cloud users and providers. A lack of harmonised requirements across the EU means that cloud users—and by extension their cloud service providers-are subject to many country-specific data protection and data security obligations, with many countries placing restrictions on data location. The associated compliance and liability concerns mean that the cloud market in the EU is not reaching its full potential or scale, thus limiting the benefits of cloud, including lower IT costs and flexibility in IT usage, greater speed, and the ability to fully leverage new and innovative technologies and services.

In addition, in today’s globalised and data-driven world, traditional regulatory approaches are being challenged, as the evolution of technology outpaces the regulatory response.

Europe therefore needs to adopt a strategic approach to regulation that recognises the blurring of both geographic and industrial boundaries and leaves room for innovation, while ensuring the protection of personal data.

The promise of digital is based on the ability to gather, store and analyse various types of data so organisations can make better decisions about key aspects of their business, to drive productivity and the development of new business models. By modernizing and harmonizing rules to protect personal data and streamlining compliance, policy makers can enable businesses and consumers to leverage the full benefits of new data and technology-based products and services.

Finally, in addition to adopting data-friendly policies, policy makers must put in place a supporting regulatory environment for investment in technology, innovation and digital infrastructure, which are the backbone of the digital transformation of the economy and essential ingredients to the success of innovative entrepreneurs. The harmonisation of rules in the communications markets is equally critical to enabling players with operations in multiple EU countries to capture the full potential of cross-country synergies, thedevelopment of pan-European IT platforms and services. For example, the allocation of radio spectrum and the harmonisation of its management across the EU level are essential to supporting investment in wireless broadband networks.

21 Appendix: Q5

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ADDRESSING THE DIGITAL SKILLS ISSUE

The region continues to struggle with a widening digital skills gap that will impact the ability of EU businesses and governments to leverage the digital opportunity. Jobs growth in the Information and Computer Technology (ICT) sector is forecast to run at 7.6 percent in the next decade, more than double the overall rate of job creation forecast.xlix The EU produces nearly 1 million science, technology, engineering and maths (STEM) tertiary education graduates every year, almost double the number in the United Statesl but far behind emerging countries such as China (1.7 million) and India (nearly 1.2 million).li Yet the number of graduates in Europe is not sufficient to close the gap between skills supply and demand. According to the European Commission, if nothing is done to change the situation, about 900,000 vacancies may go unfilled in EU by 2015, which will greatly reduce the opportunity for growth and for the digital transformation that is required in Europe’s economy.lii

At the same time, unemployment remains stubbornly high and there is the real possibility that digital disruption, while accelerating economic growth and competitiveness, willdisplace workers due to automation and changing skill requirements.

Solutions for these two complementary problems must be linked, targeting relevant technical and vocational training while employing digital platforms and tools, such as online learning through Massive Open Online Courses (MOOC) and Open Educational Resources, which will improve and accelerate access to the right skills while providing the unemployed or those in danger of losing their job the skills to gain or maintain employment. These initiatives should be promoted and implemented across the 28 EU member states. While the dropout rate for MOOC is high and standards may not be quite so rigorous, such courses arestill a very cost-effective way of reaching people who may otherwise not have access to such training. There are a number of examples of successful partnerships among governments, businesses, educational institutions, and non-governmental organisations (NGOs) that are providing these groups with the opportunity to get and maintain the necessary skills.

EU governments, businesses and educational institutions also need to forecast future skills needs and make targeted investments in new educational and training policies to continuously up-skill and re-skill existing and future employees to address structural changes in skills requirements. Other initiatives should include the joint development of innovative educational partnerships among governments, businesses and educational institutions, aimedat increasing the employability of non-STEM students through the development of courses and apprenticeships that help students develop and use digital skills in a professional environment.

Policies that enhance the mobility of qualified talent within, and into, the EU, and promoting older workers to remain in the work force must also be part of the solution. This includes reexamining the framework for the recognition of skills across the EU to enhance the quality of information available to potential recruiters; promoting the development of language skills; and providing incentives to remain in the workforce longer. One successful example is the development of a new intermediary “YourEncore,” which focuses on engaging a growing segment of experienced talent: retirees and provides short-term solutions to skills needs YourEncore, Inc. maintains a network of specialists – retired scientists and engineers – who are called on to work on projects at more than 50 companies, such as Procter & Gamble Company, Eli Lilly and Company, and General Mills, Inc. One “YourEncore” Expert, a retired chemical engineer who had spent 35 years specialising in colour for Eastman Kodak Company, helped a consumer products client solve a colour challenge with a new hair-care product.liii

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FOSTERING GROWTH AND INNOVATION THROUGH ENTREPRENEURSHIP

Innovation and entrepreneurship are vital to competitiveness and job creation. The EU is no different, with many young and innovative businesses already contributing the majority of employment growth in the region. In fact, 40 percent of executives surveyed believe that innovation and the creation of new products and services will lead to greatercompetitiveness in Europe and are looking to EU governments and policy makers to make a concerted efforts to attract and retain inventors, innovators, and entrepreneurs—particularly those that are young and digitally proficient. Appropriate steps must therefore be taken to develop and nurture the current and coming generations of entrepreneurs that will play a central role in Europe’s recovery through the launch and development of new business models, the creation of new products and services and innovative partnerships between large and small companies.

Some current actions in place to help entrepreneurs are still valid and should continue to be an area of focus. Policy makers should further promote the delivery of public advisory services, such as those regarding tax or fiscal matters, and simplified online administrative processes, while strengthening “second chance” policies to promote a higher acceptance of failure—such as adapting bankruptcy rules to the new unstable business environment to make it easier for businesses to start, grow, and further flourish. Amid these on-going initiatives, however, European governments should consider two other efforts that could help create a more entrepreneurial culture: virtual clusters and non-traditional sources of funding.

While many factors contribute to entrepreneurial success, one of the biggest—and hardest to measure—is the ability to consort with other entrepreneurs in a cluster, the most famous of which is Silicon Valley. Having other like-minded individuals nearby who can serve as both a sounding board for new ideas and a support group when times get tough is something that has been proven valuable to entrepreneurs time and again. There are a number of examples of cluster development in Europe, including those in London, Berlin, and Paris,liv yet, while entrepreneurs value clusters, oftentimes geographic barriers can make it difficult for many to join them.lv Thus, virtual clusters, supported by

digital technologies, can bring together educators, large and small businesses, and talent—wherever they are in the world, to accelerate the pace of innovation and job creation.

Governments and businesses need to support the further development of virtual clusters in the EU. By collaborating via virtual clusters, entrepreneurs gain access to new markets, specific skills, expensive technologies, funding, economies of scale, and the possibility to eventually sell one’s business to a collaboration partner. Large companies will benefit from greater exposure to a wide range of innovation that may potentially disrupt their markets, gain access to a new talent pool, and indirectly stimulate internal entrepreneurship among their own employees.lvi Virtual clusters, supported by digital technologies, can bring together all these players to accelerate the pace of innovation and job creation.

Entrepreneurs also need money to make their ideas a reality; therefore, greater strides toward fostering access to non-traditional sources of financing must be made. The EU should continue to explore ways to facilitate access to traditional sources of financing such as private loans, credits, and public support—which was a major issue for 34 percent of European executives, not only entrepreneurs—and complement those with efforts to promote non-traditional, innovative and digital forms of financing such as crowd funding.

Crowd funding in the region has already become more widespread, growing in 2012 by an estimated 65 percent over 2011 for a total of ‐735 million.lvii This figure is all the more important given the shrinking European venture capital market, as crowd funding helps bridge the finance gap for small firms with innovative projects. The EU, together with national governments, should further explore opportunities to support the development of crowd funding, including how EU and other traditional public funding can be better utilised in this area, as outlined in the European Commission Communication, “Unleashing the potential of Crowdfunding in the European Union.”lviii

THE REALITY IS THAT WITH-OUT SIGNIFICANT POLICY CHANGES TO STIMULATE THE DEVELOPMENT AND GROWTH OF ENTREPRENEURS, THE EU WILL BE DEPRIVING ITSELF OF ONE OF THE MOST PROVEN DRIVERS OF COMPETITIVENESS, GROWTH AND JOB CREATION.

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THE NEED TO MEASURE PROGRESS AND IMPACT—A DIGITAL INTENSITY INDEXOf course, one of the keys to effectively capitalizing on the potential of digital technologies to accelerate competitiveness and growth in the EU is to understand where one is and how far one still needs to go from a business, government and policy-making perspective.

In addition, businesses need to assess their current position and set out a roadmap of initiatives and targets for integrating digital technologies into processes, products, and services—all of which can be tracked. Accenture has recently measured the progress of large German companies in leveraging digital technologies, using an Accenture-developed digital index that measured progress in three areas: development of a digital strategy aligned to the overall corporate strategy; digital product and service innovation; and digital enablement and automation of the organisation.

The research found there are a number of large, high-growth businesses that are already well advanced in leveraging digital technologies (see Figure 19).lix One such company is BMW Group, a traditional industry leader that has developed a comprehensive digital transformation strategy and is aggressively pursuing new digital-based offerings. For instance, via its BMW i Mobility Services,lx the company launched “DriveNow,” a car-sharing service that teams BMW, MINI, and Sixt AG to enable users to rent cars flexibly, when and where they need them. Billing is on a per-minute basis, and fuel costs and parking charges in public car parks are included. Users can locate available cars using the app, website, or on the street, and a chip in the customer’s driving license acts as an electronic key. Another example of a BMW i Mobility service is “ParkatmyHouse.com,” an online marketplace that brings together owners of private parking spaces and people in search of parking.

In the public sector, Accenture’s recent digital government research evaluated progress in digital services implementation across 10 countries—Brazil, Germany, India, Norway, Saudi Arabia, Singapore, South Korea, the United Arab Emirates (UAE), the United Kingdom and the United States.lxi

This Citizens Service Experience index is based on a combination of weighted quantitative and qualitative measures in three key areas: the voice of citizens related to the role of their governments in providing excellence in services; the level to which a government has developed an online presence; and the extent to which government agencies manage interactions with their customers—citizens and businesses—and deliver service in an integrated way. Using this index, Accenture was able to assign an overall score on digital service progress for each country. Singapore emerged as the overall leader (7.4), followed by Norway (7.3), and the UAE (6.7). South Korea (6.0), Saudi Arabia (5.9), the United States (5.9) and the United Kingdom (5.7) formed the middle pack, and India (5.4), Germany (4.7) and Brazil (4.3) followed.lxii

Finally, the European Commission, as part of its Digital Agenda for Europe, measures and publishes an annual scorecard of progress toward the adoption of digital technology and services across EU member states.lxiii While this is an important and positive initiative, it does not measure the impact of digital on the factors that influence competitiveness—at an EU, national or industry level.

As part of Accenture’s research programme on European Competitiveness, and as a contribution to the discussion on how digital technologies can accelerate competitivenessand growth across the EU and its industries, it will develop a methodology for measuring the impact of digital on European competitiveness—both from a country and industry perspective—against which progress can be measured over time.

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Figure 19: Measuring progress: Germany’s digital champions.

5

1.0

1.5

2.0

2.5

3.0

0

3.5

4.0100959085807570656055504540353025201510

Business Result

Average digital maturity: 2.8

Average business result: 49.7Digitization Challengers

Digitization Laggards

Digitization Champions

Traditional Champions

Digital Maturity

Peers

Source: Top500 study 2014, Accenture analysis (n = 187)The Business Result has been calculated based on the compound annual growth rate (CAGR) of revenue and the average profitability (as measured by the Return on Sales and the Return on Equity) for the period of 2008 to 2012. Scale used is: 100 = highest value and 0 = lowest valueThe Digitization Index is derived from the value of the three underlying components i.e. digital strategy, digital offerings and digital processes, each of which is based on further underlying criteria. Scale: 1 = largely digitized, 2 = partially digitized, 3 = little digitization, 4 = minimal digitization. All averages are unweighted.

Growth Champions

THE LAST WORD

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The EU continues to faces considerable challenges in rebuilding its competitiveness and carving out a path to stronger growth—challenges that are exacerbated by the vastly different starting points among countries, industries and organisations across the region. Digital technologies can be a powerful tool that can help the region build its economic future and accelerate the required transformation of its organisations and industries. The prize is a massive potential upside in growth and thus in job creation.

By leveraging digital technologies to reshape their organisations, businesses and public sector agencies can become more efficient and their employees can become more productive. New products and services will result in new revenue growth—domestically and in export markets.

Of course, while digital is a powerful catalyst that can accelerate and amplify the EU’s competitiveness and growth, it is not the only one. Other factors also need to be considered: stable public finances; removing regulatory and other barriers within the internal European market; investment in physical trans-European infrastructure; tackling the cost of energy; opening access to global markets; and promoting innovation. Yet as we have seen, in many of these pursuits, digital technologies play a significant role.

The EU has an opportunity to use these powerful disruptors to not only help address some of the challenges that have been holding its economies back, but more importantly, to capitalise on the substantial upside in growth—and subsequently, in employment—that is possible. Overlooking the revenue growth opportunities made possible by advances in digital technology may hinder the competitive potential of companies in the EU and could slow overall growth prospects.

In other words, the pressure is on for the EU to adopt a new approach to growth and competitiveness, one that involves embracing digital technology to the fullest. The risk of business as usual is likely to be “results as usual”—which means ultimately watching other economies pass the EU by as they capitalise on the digital advantage.

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ABOUT THE RESEARCHTo identify the opportunities (short, medium and long term), the barriers to overcome and recommended actions for policy makers and businesses to seize all the possibilities of the digital transformation of the European economy and rebuild a competitive Europe, Accenture commissioned a survey of more than 500 business decision makers across Europe.

This research report presents the major findings of this extensive survey as well as of macro and microeconomic analysis.

THE SAMPLE

A total of 513 C-level executives representing European businesses were interviewed.

INDUSTRY COVERAGE

47% of Business Executives represented manufacturing or energy companies. 53% represented Service companies.

The sample included a broad mix of industries, ranging from chemicals to banking, retail, manufacturing and services.

SIZE OF ORGANISATIONS

Four sizes of companies were represented:16 percent Small (less than 50 employees)19 percent Medium (between 50 to 500 employees)48 percent Large (between 500 to 10,000 employees)17 percent Very large (more than 10,000 employees)

GEOGRAPHIC SCOPE

The sample included 27 countries* across Europe, including at least a 10 percent representation each from Belgium, France, Germany, Italy, Spain, and the United Kingdom.

*Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, France, Finland, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom

ACKNOWLEDGEMENTSThis report and the research on which it is based would not have been possible without the generous participation of many people.

CORE PROJECT TEAM MEMBERS

Francis Hintermann, Edvina Kapllani, Georgina Lovati and Charlotte Raut from Accenture Research.

Also from Accenture we would like to recognise the significant contributions of Bruno Berthon, Alex Broeking, Matthew McGuinness, Alexandra Paul, Mark Purdy, Matthew Robinson, Mark Spelman and Barbara Wynne.

Queries relating to this report should be directed to: [email protected],[email protected],[email protected].

ADDITIONAL THANKS

From BUSINESSEUROPE, we would like to acknowledge the support and contributions of Thérèse de Liedekerke.

From the European Business Summit, we would like to acknowledge the support and contributions of Arnaud Thysen.

We also wish to thank the 513 business leaders who completed the survey.

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APPENDIX

EU DIVERSITY

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COUNTRY ANALYSIS UNVEILS A VARIED AND CONTRASTING LANDSCAPE

The EU has navigated its currency crisis through turbulent waters, and improving economic conditions are creating a sense of renewed optimism that Europe is finally on the road to recovery. As mentioned earlier, the Accenture research in collaboration with BUSINESSEUROPE research revealed that at an aggregate level, there is a growing sense of optimism among EU business leaders about Europe’s growth; that smarter regulation, innovation resulting in the creation of new products and services, and the adoption of new technologies to drive productivity (35 percent) are the top-priority initiatives to restore European growth and job creation; and that digital technologies are critical to Europe’s competitiveness.

However, Europe comprises many different economies, and perceptions and perspectives on those issues vary across the region. In the following sections, we highlight these differences in summaries of our research findings within the five largest EU economies—Germany, the United Kingdom, France, Italy, Spain—and Belgium.

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GERMANY The level of confidence expressed by business leaders in Germany is above the EU average (60 percent), with 68 percent of German leaders optimistic about the economic growth prospects of the EU in the next three years. Furthermore, business leaders are highly positive about the EU’s ability to compete, with 85 percent of respondentsindicating they considered Europe to be competitive internationally (compared with the EU average of 61 percent) and 77 percent stating their confidence that Europe’s international competitiveness will at least remain at this level in the next three years. Just over half ofGermany-based respondents are confident that Europe’s international competitiveness will increase. The country’s economic performance, is expected to register 1.4 percent GDP growth in 2014, and a significant increase in investment and exports is projected. Challenges remain in terms of competitiveness at a European level.

Three keys to addressing the widening EU competitive gap: Executives in Germany (51 percent) and Spain (47 percent) cited adoption of new technologies to drive productivity as the top-priority initiative to improve EU competitiveness in the next three years. Next in importance for German-based executives are better education and training of the workforce (48 percent) and innovation resulting in the creation of new products and services (46 percent). Other notable initiatives included smarter regulation (42 percent) and cheaper energy resources (29 percent).

Regulation continues to be an on-going challenge, as 49 percent indicated excessive regulation is impeding the development of digital technologies in the EU. Nevertheless, there is a high degree of trust among the German business community towards EU policy on digital, as 75 percent are confident that the EU has the right level of actions in place to enable digital transformation (considerably above EU average of 63 percent).

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Digital disruption: a catalyst for EU growth and competitiveness: The majority of German business leaders believe digital technologies will play an important or critical role in boosting EU competitiveness (98 percent, slightly above the EU average), EU economic growth (92 percent, slightly below the EU average), and EU job creation (85 percent, slightly above the EU average). German business leaders see digital as less of a burning platform, and only 41 percent of German businesses expect digital technologies to impact business models in the industry in the next 12 months. Only 44 percent of German-based executives share the concerns of 63 percent of EU executives, who fear losing customers if their company does not embrace digital transformation in the next 12 months. Yet German companies are not fully capitalizing on the promise of digital, as major investments to date have been primarily on driving efficiencies (62 percent) instead of making their products and services digital (38 percent); this is lower than the EU average (60 percent and 40 percent, respectively).

German business leaders are less fearful than their EU counterparts that the EU will struggle to compete with other major economies in digital adoption. While 63 percent think Europe is ahead of China in the development and use of digital today, 48 percent believe China will overtake the EU within the next three years. Additionally, 49 percent believe that Europe lags US today, and 35 percent expect this to still be the case in three years. German executives are by far the most optimistic about the position of Europe versus China and mostly the US regarding development and implementation of digital technologies in next three years.

Only 49 percent of German leaders believe Europe has enough skilled workers in digital, and 65 percent plan to increase the number of recruits outside Europe to find the digital skills needed. When asked what initiative should be taken at the EU level to help address upskilling/retraining of existing workers, German executives think top-priority actions should be to promote reskilling/retraining programs for older age groups (60 percent), use technology to enable lifelong training and development of skills (58 percent), and promote direct involvement of businesses in the professional educational system (52 percent). To develop the level of skills of graduates, German businesses think EU-level initiatives should focus on increasing STEM graduates (57 percent), developing educational programs targeted at the success of digital (52 percent), and promoting vocational training/improving apprenticeship (45 percent).

In Germany, there is a clear indication that Europe needs to nurture and foster its current and potential entrepreneurs: Eighty-two percent of Germany-based respondents believe it is important or critical to foster closer collaboration between large corporations and entrepreneurs/SMEs to succeed in digital transformation. Among the actions business leaders see as vital to fostering such collaboration are supporting the development of incubators (58 percent), stimulating joint innovation (55 percent), and supporting the development of local technology clusters (55 percent).

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UK The level of confidence expressed by business leaders in the UK is the highest in the survey, with 75 percent optimistic about the economic growth prospects of the EU in the next three years. Despite this, they are only moderately positive about the EU’s ability to compete, with just 60 percent of respondents indicating they considered Europe to be competitive internationally (compared with the EU average of 61 percent). While 77 percent of UK-based respondents believe the EU will be able to at least maintain this level of competitiveness in the next three years, just under half are confident in Europe’s ability to increase international competitiveness. The country’s economic performance, is expected to experience a 2.7 percent GDP growth in 201419. Yet significant challenges remain in terms of competitiveness improvement.

Three keys to addressing the widening EU competitive gap: Smarter regulations are the most important initiative for the UK (42 percent) and France (71 percent), and also is among the top three in Belgium and Italy.

The second-most important initiative for UK (40 percent), French (45 percent) and Belgian (39 percent) business leaders is access to less-expensive and more-flexible labour resources. Access to cheaper energy resources is the third-most important initiative for the UK (34 percent), Spanish (39 percent), and Italian (37 percent) executives. Other notable initiatives for UK-based business leaders include easier access to credit and financing (32 percent) andbetter education and training of the workforce (29 percent).

Regulation continues to be an on-going challenge, as 55 percent indicated excessive regulation is impeding the development of digital technologies in the EU. Moreover, there is a moderate degree of trust among UK business community towards EU policy on digital, as only 57 percent are confident the EU has the right level of actions in place to enable digital transformation (below the EU average of 63 percent).

19 AEIU data, 2014

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Digital disruption: a catalyst for EU growth and competitiveness: The majority of UK business leadersbelieve digital technologies will play an important or critical role in boosting EU competitiveness (97 percent, slightly above the EU average), EU economic growth (95 percent, slightly above the EU average), and EU job creation (80 percent, slightly below the EU average). UK businesseshave reached a tipping point in their digital transformation, as 59 percent of UK leaders believe digital will result in major change or complete transformation of business models in their industry in next 12 months and 82 percent of UK executives (above the EU average of 63 percent) are concerned they will lose customers to competitors if they do not embrace technology in that timeframe. Yet, UK companies are not fully capitalizing on the promise of digital, as major investments to date have been primarily on driving efficiencies (74 percent) instead of making their products and services digital (36 percent)—whereas European counterparts on average are capitalizing more on digital by investing 60 percent and 40 percent, respectively.

Despite the enthusiasm, UK business leaders fear more than other EU business leaders that the EU will struggle to compete with other major economies in digital adoption: Forty-eight percent think Europe is ahead of China in the development and use of digital today and 57 percent believe China will overtake the EU within the next three years. Additionally, 66 percent believe Europe lags the US today and 65 percent expect this to still be the case in three years.

Only 48 percent of UK leaders believe Europe has enough skilled workers in digital and 48 percent plan to increase the number of recruits outside Europe to find the digital skills needed. When asked what initiative should be taken at the EU level to help address upskilling/retraining of existing workers, UK executives think priority actions should be to promote reskilling/retraining programs for older age groups (63 percent), use technology to enable lifelong training and development of skills (62 percent), and invest in and promote digital learning and training (54 percent). To develop the level of skills of graduates, UK businesses think EU-level initiatives should focus on developing educational programs targeted at the success of digital (51 percent), increase STEM graduates (49 percent), and promote vocational training/improve apprenticeship (49 percent).

There is a clear indication that Europe needs to nurture current and potential entrepreneurs, as 89 percent of UK respondents believe it is important or critical to foster closer collaboration between large corporations and entrepreneurs/SMEs to succeed in digital transformation. Among the actions business leaders see as vital to fostering such collaboration are stimulating joint innovation (62 percent), supporting venture capital development (54 percent), and supporting the development of local technology clusters (49 percent).

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FRANCE The level of confidence expressed by business leadersin France is well below the EU average (60 percent), with just 38 percent of French leaders optimistic about the economic growth prospects of the EU in the next three years. Furthermore, business leaders are not very positive about the EU’s ability to compete, with only 29 percent of France-based respondents indicating they considered Europe to be competitive internationally (compared with the EU average of 61 percent). Looking forward, only 32 percent of France-based respondents believe that Europe’s international competitiveness will increase, while 66 percent believe that Europe’s international competitiveness will at the least remain at the current level in the next three years. The country’s economic performance is expected to grow by 0.8 percent and slow improvements in investment and productivity are projected. Despite the moderate recovery, significant challenges remain in terms of competitiveness at the European level.

Three keys to addressing the widening EU competitive gap: French business leaders believe that the top initiatives to improve EU competitiveness in the next three years are smarter regulation (71 percent), innovation resulting in the creation of new products and services (45 percent), and less-expensive and more-flexible labour resources (45 percent). Like the UK, easier access to credit and financing (32 percent) and better education and training of the workforce (28 percent) are also important initiatives for France.

Regulation continues to be an on-going challenge, as a slight majority of French executives indicate lack of adequate European policies due to fragmented landscape and excessive regulation are impeding the development of digital tech-nologies in the EU. Moreover, there is a low degree of trust among the French business community towards the EU policy on digital, as only 49 percent are confident the EU has the right level of actions in place to enable digital transformation (considerably below the EU average of 64 percent).

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Digital disruption: a catalyst for EU growth and competitiveness: A majority of French business leaders believe digital technologies will play an important or critical role in boosting EU competitiveness (97 percent, slightly above the EU average), EU economic growth (94 percent, slightly above the EU average) and EU job creation (75 percent, slightly below the EU average). French businesses seem to see digital as less of a burning platform, as only 52 percent of French leaders believe digital will result in major change or complete transformation of business models in their industry in next 12 months and only 46 percent of respondents were concerned they could lose their customers (businesses and customers) to other providers if their company does not embrace digital transformation in the next 12 months. Yet French companies are capitalizing more than other countries in Europe on the full potential of digital, as investments to date have been equally in driving efficiencies (51 percent) and making their products and services digital (49 percent)—compared with 60 percent and 40 percent, respectively, at the European level.

Reinforcing their lack of enthusiasm, French business leaders fear more than European counterparts that the EU will struggle to compete with other major economies in digital adoption. While 57 percent think Europe is ahead of China in the development and use of digital today, 48 percent believe China will overtake the EU within the next three years. Additionally, 48 percent believe Europe lags the US today, and 62 percent expect this to still be the case in three years.

Nevertheless, French leaders are slightly more positive about digital skills, as 69 percent of French leaders consider Europe has enough skilled workers in digital and only 49 percent plan to increase the number of recruits outside Europe to find the digital skills needed. When asked what initiative should be taken at EU level to help address the upskilling/retraining of existing workers, French executives most frequently cited using technology to enable lifelong training and development of skills (57 percent), developingentrepreneurial skills (52 percent), and developing workers’ mobility inside Europe (51 percent). To develop the level of skills of graduates, French businesses think EU-level initiatives should focus on developing entrepreneurial skills (55 percent), developing workers mobility inside Europe (51 percent), and promoting direct involvement of businesses in tertiary educational system (45 percent).

France-based executives also believe in nurturing current and potential entrepreneurs: Eighty-nine percent of France-based respondents believe it is important or critical to foster closer collaboration between large corporations and entrepreneurs/SMEs to succeed in digital transformation. Among the actions business leaders see as vital to fostering such collaboration are supporting the development of local technology clusters (75 percent), supporting the development of incubators (63 percent), and stimulating joint innovation (63 percent).

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ITALY The level of confidence expressed by business leaders in Italy is slightly above the EU average of 60 percent, with 62 percent of Italian leaders optimistic about the economic growth prospects of the EU in the next three years. Furthermore, business leaders are moderately positive about the EU’s ability to compete, with 66 percent ofrespondents indicating they considered Europe to be competitive internationally (compared with the EU average of 61 percent) and 80 percent stating their confidence thatEurope’s international competitiveness will at least remain at this level in the next three years (55 percent are confident that Europe’s international competitiveness will increase). The country’s economic performance is expected to register 0.5 percent GDP growth in 2014 and a significant increase in investment and exports is projected. Challenges remain in terms of competitiveness at the European level.

Three keys to addressing the widening EU competitive gap: Italian business leaders believe that the top initiatives to improve EU competitiveness in the next three years are easier access to credit and finance (49 percent), smarter regulation (43 percent), and cheaper energy resources (37 percent). Other notable initiatives included innovation creating new products and services (32 percent) and less-expensive and more-flexible labour resources (29 percent).

Lack of adequate European policies due to the fragmented landscape continues to be an ongoing challenge for 60 percent of Italy-based respondents. The same is true of excessive regulation, which was cited by just over half of respondents as impeding the development of digital technologies in the EU. There is the highest degree of trust amongst the Italian business community towards EU policy on digital, with 79 percent of respondents confident the EU has the right level of actions in place to enable digital transformation (considerably above the EU average of 63 percent).

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Digital disruption: a catalyst for EU growth and competitiveness: Like their German-based counterparts, the majority of Italian business leaders believe digital technologies will play an important or critical role in boosting EU competitiveness (98 percent, slightly above the EU average of 96 percent). In addition they believe digital technologies will play an important or critical role in boosting EU economic growth (95 percent, slightly above the EU average) and EU job creation (94 percent, well above the EU average). Digital is a burning platform for Italian business leaders, 77 percent of whom expect digital technologies to impact business models in their industry in the industry in the next 12 months. Italy-based executives are the most concerned about losing customers if their company does not embrace digital transformation in the next 12 months (77 percent, compared with an average of 63 percent across the EU).

Considering how concerned their executives are about potential loss of customers and the impact they are predicting on business models, it is surprising that Italian companies are not fully capitalizing on the promise of digital. Major investments to date have been primarily on driving efficiencies (60 percent) instead of making their products and services digital (40 percent) which equals the EU average (60 percent and 40 percent, respectively).

Italian business leaders are somewhat concerned that the EU will struggle to compete with other major economies in digital adoption. While 45 percent think Europe is ahead of China in the development and use of digital today, 48 percent believe China will overtake the EU within the next three years. Additionally, 71 percent believe Europe lags the US today (10 percentage points higher than the EU average), and 51 percent expect this to still be the case in three years. Italian executives are not optimistic about the position of Europe versus China and are clearly concerned about the US regarding development and implementation of digital technologies in next three years.

Italian leaders believe Europe has enough skilled workers in digital (74 percent, versus the 67 percent EU average). Just over half of respondents plan to increase the number of recruits outside Europe to find the digital skills needed. When asked what initiative should be taken at EU level to help address the up-skilling/retraining of existing workers, Italian executives most often indicated promoting direct involvement of businesses in the professional educational system (58 percent), promoting reskilling/retraining programs for older age groups (55 percent), and developing entrepreneurial skills (52 percent). To develop the level of skills of graduates, Italian businesses think EU-level initiatives should focus on developing educational programs targeted at the success of digital (54 percent), developing entrepreneurial skills (48 percent), and invest in and promoting digital learning and training (46 percent).

Eighty-six percent of Italian respondents believe it is important or critical to foster closer collaboration between large corporations and entrepreneurs/SMEs to succeed in digital transformation. Among the actions business leaders see as vital to fostering such collaboration are the support of collaborative initiatives via universities and education (63 percent), stimulating joint innovation (60 percent), and supporting the development of local technology clusters and incubators (48 percent).

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SPAIN The level of confidence expressed by business leaders in Spain is above the EU average (60 percent), with 65 percent of Spanish leaders optimistic about the economic growth prospects of the EU in the next three years. Furthermore, business leaders are highly positive about the EU’s ability to compete, with 57 percent of respondents indicating they considered Europe to be competitive internationally (compared with the EU average of 61 percent) and 83 percent stating their confidence that Europe’s international competitiveness will at least remain at the current level in the next three years (52 percent are confident that Europe’s international competitiveness will increase). The country’s economic performance is expected to register 0.7 percent GDP growth in 2014, and a significant increase in investment and exports is forecast. Challenges remain in terms of competitiveness at the European level.

Three keys to addressing the widening EU competitive gap: Spanish business leaders believe the top initiatives to improve EU competitiveness in the next three years are adoption of new technologies to drive productivity (47 percent), innovation creating new products and services (45 percent), and cheaper energy resources (39 percent). Spanish executives would also like to see smarter regulation (34 percent) and better education and training of the workforce in combination with less-expensive and more-flexible labour resources (32 percent).

Lack of adequate European policies due to the fragmented landscape is the biggest obstacle to competitiveness for 56 percent of Spain-based respondents, while 51 percent of them cited lack of technology clusters to drive innovation as an issue that must be urgently addressed. In addition, excessive regulation continues to be an on-going challenge according to 39 percent of respondents, who felt that excessive regulation and insufficient digital infrastructure are impeding the development of digital technologies in the EU. The Spanish business community has the lowest level of trust when it comes to the EU’s policy on digital, with only 43 percent of them confident that the EU has the right level of actions in place to enable digital transformation (dramatically below the EU average of 63 percent).

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Digital disruption: a catalyst for EU growth and competitiveness: Almost all Spanish business leaders believe digital technologies will play an important or critical role in boosting EU competitiveness (97 percent, slightly above the EU average of 96 percent), EU economic growth (99 percent, higher than the EU average of 93 percent) and EU job creation (87 percent, slightly above the EU average of 83 percent). Spanish business leaders do see digital as a burning platform, with 71 percent of Spanish businesses expecting digital technologies to impact business models in the industry in the next 12 months.

While an average 63 percent of EU executives fear losing customers if their company does not embrace digital transformation in the next 12 months, this concern is significantly higher in Spain, with 76 percent indicating this as a viable threat to their organisation’s growth. Spanish companies run the risk of missing out on the upside of embracing digital as a driver for growth and are not fully capitalizing on the promise of digital.

While an average of 60 percent of EU executives said they intend to make their processes more digital over the next three years, only 53 percent of Spain-based businesses will do the same. On the other hand, they are moderately ahead of their peers when it comes to digitizing their products and services, with 47 percent of them saying this is where they will focus their investment over the next three years (compared with the EU average of 40 percent).

Spanish business leaders are concerned that the EU will struggle to compete with other major economies in digital adoption. While 48 percent of Spanish business leaders think Europe is currently ahead of China in the development and use of digital, 52 percent of them believe China will overtake the EU within the next three years. Additionally, 77 percent believe that Europe lags the US today, compared with the EU average of 61 percent, and 64 percent expect this to still be the case in three years. Spanish executives are by far the least optimistic about the position of Europe vs. China and the US regarding the development and implementation of digital technologies in next three years, with just 4 percent believing the EU will be ahead of the US and 19 percent believing the EU will be ahead of China in three years.

Belgian (76 percent), Spanish (75 percent), and Italian (74 percent) business leaders appear more confident that Europe has enough skilled workers in digital (compared with the EU average of 67 percent), with only 40 percent of Spanish executives planning to increase the number of recruits outside Europe to find the digital skills needed (compared with the EU average of 52 percent). When asked what initiative should be taken at EU level to help address the up-skilling/retraining of existing workers, Spanish executives most frequently identified using technology to enable lifelong training and development of skills (68 percent), investing in and promoting digital learning and training (53 percent), and promoting direct involvement of businesses in the professional educational system (49 percent). To develop the level of skills of graduates, Spanish businesses think EU-level initiatives should focus on developing educational programs targeted at the success of digital (60 percent), investing in and promoting digital learning and training (51 percent), and developing entrepreneurial skills (45 percent).

Ninety-two percent of Spanish respondents believe it is important or critical to foster closer collaboration between large corporations and entrepreneurs/SMEs to succeed in digital transformation. Among the actions business leaders see as vital to boosting such collaboration are stimulating joint innovation (69 percent), supporting collaborativeinitiatives via universities and education (62 percent), and supporting the development of local technology clusters and incubators (48 percent).

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BELGIUM The level of confidence expressed by business leaders in Belgium is well below the EU average (60 percent), with only 43 percent of Belgian leaders optimistic about the economic growth prospects of the EU in the next three years. Furthermore, business leaders are not positive about the EU’s ability to compete, with 51 percent of respondents indicating they considered Europe to be competitive internationally (compared with the EU average of 61 percent) and 56 percent stating their confidence that Europe’s international competitiveness will at least remain at the current level in the next three years (compared with the EU average of 74 percent). Only 29 percent are confident that Europe’s international competitiveness will increase. Challenges remain in terms of competitiveness at a European level.

Three keys to addressing the widening EU competitive gap: Just under half of Belgian business leaders believe the best way to improve EU competitiveness in the next three years is innovation through the creation of new products and services. They also cited smarter regulation (39 percent), cheaper energy resources (39 percent), and less-expensive and more-flexible labour (39 percent) as critical initiatives to enable greater competitiveness, as well as better education and training of the workforce (31 percent) and cheaper raw materials (27 percent).

For 63 percent of Belgian business leaders, the lack of adequate European policies due to the fragmented landscape is the biggest obstacle to the adoption of digital. Excessive regulation is also an on-going challenge, as 43 percent indicated that it is impeding the development of digital technologies in the EU. Next to Spain, the Belgian business community has the lowest degree of trust amongst their peers regarding the EU’s leadership on digital transformation, with just 47 percent of respondents (compared with the EU average of 63 percent) stating they are confident the EU has the right level of actions in place to enable digital transformation.

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Digital disruption: a catalyst for EU growth and competitiveness: Belgian business leaders are less convinced that digital technologies will play an important or critical role in boosting EU competitiveness (88 percent, significantly below the EU average of 96 percent), EU economic growth (84 percent, well below the EU average of 93 percent) and EU job creation (80 percent, slightly below the EU average). While an average of 62 percent of EU executives sees digital as a burning platform, just 49 percent of Belgian business leaders expect digital technologies to impact business models in the industry in next 12 months.

They are also less concerned (53 percent) that they will lose customers if their company does not embrace digital transformation in the next 12 months (compared with the EU average of 63 percent). Belgian companies run the risk of not fully capitalizing on digital’s promise. While 63 percent are intent on investing in the digitization of their processes in the next three years, only 37 percent will invest in making their products and services more digital, and will therefore likely miss out on critical productivity and innovation stimulation required to halt and reduce the competitive gap with their international peers.

Only 43 percent of Belgian business leaders believe Europe is ahead of China in the development and use of digital today, while 65 percent believe China will overtake theEU within the next three years. Additionally, 63 percent believe Europe lags the US today, and 57 percent expect this to still be the case in three years.

Belgian (76 percent), Spanish (75 percent), and Italian (74 percent) business leaders appear more confident that Europe has enough skilled workers in digital (compared with the EU average of 67 percent), with only 43 percent of Belgian executives planning to increase the number of recruits outside Europe to find the digital skills needed (compared with the EU average of 52 percent). When asked what initiative should be taken at EU level to help address the up-skilling/retraining of existing workers, Belgian executives most often cited using technology to enable lifelong training and development of skills (57 percent), developing workers’ mobility inside Europe (53 percent), promoting direct involvement of businesses in the professional educational system (51 percent), and investing in and promoting digital learning and training (51 percent).

To develop the level of skills of graduates, Belgian businesses think EU-level initiatives should focus on and promote the direct involvement of businesses in the tertiary educational system (55 percent), development of entrepreneurial skills (49 percent), and development of workers’ mobility inside Europe (47 percent).

Belgian executives were slightly less likely than their EU peers (84 percent versus 87 percent) to believe it is important or critical to foster closer collaboration between large corporations and entrepreneurs/SMEs to succeed in digital transformation. Among the actions Belgian business leaders see as vital to boosting such collaboration are stimulating joint innovation (65 percent), supporting collaborative initiatives via universities and education (57 percent), and supporting the development of local technology clusters (57 percent). Supporting the development of incubators and venture capital development are also priority actions for 43 percent of Belgium-based respondents.

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RESEARCH RESULTS BY COUNTRY

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Total Belgium France Germany Italy Spain UK Other EU countries

1. Compared with last year, how confident are you about Europe’s economic growth prospects in 2014?

Very optimistic: much better than 2013 8% 6% 8% 12% 9% 1% 11% 10%

Optimistic: better than 2013 45% 33% 23% 51% 54% 51% 57% 43%

Neutral: about the same as 2013 37% 39% 55% 35% 23% 44% 29% 36%

Pessimistic: worse than 2013 8% 18% 12% 2% 11% 3% 2% 10%

Very pessimistic: much worse than 2013 2% 4% 2% 3% 1% 2% 2%

2. How confident are you about Europe’s economic growth prospects in the next three years?

Very optimistic 7% 2% 3% 5% 9% 3% 9% 12%

Optimistic 53% 41% 35% 63% 53% 62% 66% 49%

Neutral 31% 37% 43% 31% 31% 29% 22% 30%

Pessimistic 6% 16% 17% 2% 3% 5% 2% 6%

Very pessimistic 3% 4% 2% 5% 1% 2% 4%

3. What best reflects your views on Europe’s international competitiveness?

Europe is competitive 61% 51% 29% 85% 66% 57% 60% 69%

Europe is not competitive 39% 49% 71% 15% 34% 43% 40% 31%

4. Based on the current level of actions by businesses and policy makers, how do you expect Europe’s international competitiveness to evolve in the next 3 years? Please select what best reflects your views.

Europe’s international competitiveness 47% 29% 32% 52% 55% 41% 46% 58% will increase in the next 3 years

Europe’s international competitiveness 26% 44% 34% 23% 20% 17% 23% 27% will decrease in the next 3 years

Europe’s international competitiveness 27% 27% 34% 25% 25% 42% 31% 14% will remain the same in the next 3 years

5. What do you believe would most improve the competitiveness of Europe in the next 3 years? – Ranked in Top 3

Smarter regulation 41% 39% 71% 42% 43% 34% 42% 30%

Innovation creating new products 40% 45% 45% 46% 32% 45% 28% 40% and services

Adoption of new technologies to 35% 18% 26% 51% 25% 47% 28% 41% drive productivity

Easier access to credit and financing 34% 25% 32% 28% 49% 51% 32% 26%

Cheaper energy resources 33% 39% 23% 29% 37% 39% 34% 31%

Better education and training of 33% 31% 28% 48% 23% 32% 29% 35% the workforce

Less expensive and more flexible 31% 39% 45% 17% 29% 32% 40% 25% labour resources

Cheaper raw materials 20% 27% 11% 11% 17% 12% 26% 30%

Enhanced digital infrastructure 17% 14% 11% 15% 26% 5% 26% 20% (broadband, wireless)

Improved physical infrastructure 15% 22% 9% 14% 18% 3% 15% 22% (roads, ports, water, electricity)

ACCENTURE EUROPEAN BUSINESS SUMMIT SURVEY 2014

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6. What best describes your definition of “digital”?

A major transformation in the way companies 37% 29% 51% 37% 39% 50% 31% 26% make business impacting both efficiency processes and growth opportunities

New business models that companies need 24% 16% 18% 20% 26% 16% 28% 35% to develop in order to continue to grow

A group of new technologies that will help 35% 39% 28% 35% 35% 34% 39% 34% businesses be more efficient

I do not understand what the concept of 4% 16% 3% 8% 2% 4% ‘digital’ really covers

7. How important will digital technologies be to boost in the next three years? - % answering ‘Critical’ or ‘Important’

Europe’s competitiveness 96% 88% 97% 98% 98% 97% 97% 94%

European economic growth 93% 84% 94% 92% 95% 99% 95% 90%

Job creation in Europe 83% 80% 75% 85% 94% 87% 80% 80%

8. In which industries do you expect digital technologies to have the highest impact on business performance?

In manufacturing industries 36% 35% 25% 35% 35% 27% 43% 44%

In services 64% 65% 75% 65% 65% 73% 57% 56%

9. Which of the following best describes the primary impact digital technologies will have on Europe’s competitiveness in your industry?

Digital technologies will make processes 54% 41% 28% 58% 62% 49% 58% 66% more efficient and reduce operating costs

Digital technologies will create substantial 46% 59% 72% 42% 38% 51% 42% 34% new growth opportunities (e.g., new products and services, new distribution)

10. Where will your company primarily focus its investments in digital in the next 3 years?

To make your processes more digital 60% 63% 51% 62% 60% 53% 74% 59%

To make your products and services 40% 37% 49% 38% 40% 47% 26% 41% more digital

11. How concerned are you that your customers (businesses and/or consumers) may change providers if your company does not embrace the digital transformation in the next 12 months?

Very concerned 15% 12% 3% 6% 22% 27% 8% 19%

Somewhat concerned 48% 41% 43% 38% 52% 49% 74% 43%

Not very concerned 31% 43% 51% 42% 26% 17% 15% 30%

Not at all concerned 6% 4% 3% 14% 6% 3% 7%

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12. To what extent do you expect the continued evolution of digital technologies to impact business models in your industry over the next 12 months

Complete transformation 10% 6% 6% 6% 17% 9% 5% 16%

Major change 52% 43% 46% 35% 60% 62% 54% 56%

Minor change 34% 45% 43% 51% 23% 23% 42% 25%

No change 4% 6% 5% 8% 5% 3%

13. Who do you expect to adopt digital technologies first in Europe?

Consumers/households will adopt faster 54% 55% 68% 54% 46% 45% 65% 51% digital technologies than businesses

Businesses will adopt faster digital 46% 45% 32% 46% 54% 55% 35% 49% technologies than consumers/households

14a. How does Europe currently compare with China regarding the development and implementation of digital technologies?

Europe is/will be ahead of China 51% 43% 57% 63% 45% 48% 48% 52%

Europe is/will be behind China 38% 53% 29% 23% 42% 36% 45% 40%

Europe is/will be at level with China 11% 4% 14% 14% 14% 16% 8% 8%

14b. How do you think Europe will compare with China regarding the development and implementation of digital technologies in 3 years?

Europe is/will be ahead of China 30% 16% 32% 29% 29% 19% 23% 46%

Europe is/will be behind China 50% 65% 48% 48% 48% 52% 57% 42%

Europe is/will be at level with China 20% 20% 20% 23% 23% 29% 20% 13%

14c. How does Europe currently compare with the US regarding the development and implementation of digital technologies? Europe is/will be ahead of the US 22% 10% 11% 31% 15% 6% 25% 38%

Europe is/will be behind the US 61% 63% 68% 49% 71% 77% 66% 48%

Europe is/will be at level with the US 17% 27% 22% 20% 14% 17% 9% 14%

14d. How do you think Europe will compare with the US regarding the development and implementation of digital technologies in three years?

Europe is/will be ahead of the US 24% 14% 11% 45% 32% 4% 20% 35%

Europe is/will be behind the US 53% 57% 62% 35% 51% 64% 65% 46%

Europe is/will be at level with the US 23% 29% 28% 20% 17% 32% 15% 19%

15. Are you aware of the Digital Agenda for Europe?

You are aware of it and know the objectives 20% 12% 8% 23% 32% 14% 22% 23% and content

You are aware of it but do not really know 45% 33% 52% 48% 42% 44% 38% 51% the objectives and content

You are not aware of it 35% 55% 40% 29% 26% 42% 40% 26%

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16. How confident are you that Europe has the right level of actions in place to enable its digital transformation?

Very optimistic 8% 2% 3% 9% 14% 3% 5% 16%

Optimistic 55% 45% 46% 66% 65% 40% 52% 62%

Pessimistic 34% 49% 46% 25% 18% 52% 38% 20%

Very pessimistic 3% 4% 5% 3% 5% 5% 2%

17. What are the main challenges to the development of digital technologies in Europe? Select the three most important challenges – Ranked in Top 3

Excessive regulation 46% 43% 52% 49% 52% 39% 55% 38%

Lack of adequate European policies due 46% 63% 58% 37% 60% 56% 32% 30% to fragmented landscape

Lack of technology clusters (i.e. equivalent 39% 41% 49% 42% 31% 51% 31% 33% to the Silicon Valley in the US)

Data security issues 38% 31% 37% 49% 34% 25% 40% 43%

Insufficient digital infrastructure 35% 29% 23% 32% 51% 39% 42% 30% (e.g., high speed broadband)

Data privacy issues 33% 14% 37% 46% 15% 23% 40% 42%

Insufficient competitiveness of European 33% 41% 23% 26% 35% 30% 32% 38% players (e.g., software and hardware providers and suppliers)

Lack of STEM skills (Science, Technology, 27% 31% 15% 18% 22% 34% 28% 36% Engineering and Mathematics)

You do not see any challenge to the 1% 2% 2% 1% 3% development of digital technologies in Europe

18. What are Europe’s most important strengths that will help it improve its competitiveness in digital? Select the three most important assets – Ranked in Top 3

European companies with 49% 51% 58% 35% 49% 58% 49% 45% international presence

Strong innovation capabilities 47% 35% 48% 49% 54% 53% 35% 50%

Highly reputed educational system 38% 39% 45% 45% 29% 34% 38% 36%

Thriving entrepreneurship 35% 27% 38% 48% 35% 22% 40% 33%

Strong local demand – B2B markets 34% 31% 22% 40% 29% 30% 43% 38%

Strong local demand – B2C markets 33% 31% 43% 23% 29% 40% 43% 26% (i.e. sophisticated consumers, purchasing power)

Stable and reliable regulation 31% 31% 18% 34% 31% 30% 37% 32% (e.g., IP protection)

Ambitious European policies to 29% 24% 28% 22% 34% 32% 14% 38% develop digital

None - you do see any strength that will 2% 10% 2% 3% 1% help Europe to improve its competitiveness in digital

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19. Do you consider that European digital players are best positioned to serve B2B or B2C markets?

B2B (other businesses) 64% 57% 58% 71% 63% 64% 51% 74%

B2C (consumers/households) 36% 43% 42% 29% 37% 36% 49% 26%

20. What best reflects your views regarding the main driving force of Europe’s digital competitiveness in the next three years?

Europe’s digital competitiveness will mainly 50% 45% 57% 40% 63% 34% 40% 61% rely on its technology startup companies in the next three years

Europe’s digital competitiveness will mainly 50% 55% 43% 60% 37% 66% 60% 39% rely on its large companies embracing digital technologies in the next three

21. How important is it for your business to have European providers (e.g. telecommunication, IT and technology providers) to support your digital transformation?

Critical 20% 14% 20% 15% 25% 38% 17% 15%

Important 61% 53% 55% 68% 63% 48% 66% 69%

Not very important 16% 31% 22% 14% 11% 13% 14% 12%

Not important at all 3% 2% 3% 3% 2% 1% 3% 4%

22. How important will be digital to address the following challenges in Europe in the next three years? Critical + Important

Skills challenges 94% 92% 92% 92% 95% 95% 95% 94%

Innovation challenges 91% 86% 92% 98% 89% 90% 95% 88%

Energy challenges 83% 80% 75% 82% 91% 81% 85% 84%

Challenges in collaboration between large 82% 73% 89% 78% 85% 86% 86% 80% businesses and entrepreneurs/SMEs

Access to finance 79% 71% 77% 71% 89% 83% 82% 80%

Challenges in public services quality 78% 73% 72% 82% 85% 78% 74% 80%

23. Do you consider that Europe has enough skilled workers (e.g. data scientists, engineers) to succeed in its digital transformation?

Yes 67% 76% 69% 49% 74% 75% 46% 74%

No 33% 24% 31% 51% 26% 25% 54% 26%

24. Do you plan to increase the number of recruits you are making outside Europe in order to find the skills required for the digital transformation of your business in the next three years?

Yes 52% 43% 49% 65% 52% 40% 48% 62%

No 48% 57% 51% 35% 48% 60% 52% 38%

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25. How important are entrepreneurial skills and culture to succeed in the digital economy?

Critical 35% 24% 38% 34% 38% 64% 35% 20%

Important 59% 63% 55% 60% 57% 35% 65% 70%

Not very important 5% 12% 6% 6% 3% 1% 8%

Not important at all 1% 2% 2% 2%

26. What priority actions should be taken at European level to develop the level of skills of graduates / first time workers to meet skills requirements for Europe’ digital transformation? – Ranked in Top 3

Develop educational programs targeted 49% 43% 40% 52% 54% 60% 51% 42% on the success of digital (e.g., training on technologies but also on new business)

Develop entrepreneurial skills 45% 49% 55% 40% 48% 45% 35% 44%

Promote direct involvement of businesses in 43% 55% 45% 40% 40% 44% 34% 43% tertiary educational system (e.g., definition of tertiary educational curricular)

Develop workers’ mobility inside Europe 42% 47% 51% 32% 43% 44% 40% 39% (e.g., improvement of language skills, better synergies between national employment)

Increase Science/Technology/Engineering 42% 37% 29% 57% 32% 23% 49% 54% and Maths graduates

Invest in and promote digital learning and 42% 29% 40% 34% 46% 51% 42% 43% training (e.g., MOOC: massive online open courses)

Promote vocational training/improve 39% 39% 40% 45% 37% 32% 49% 34% apprenticeship

27. What priority actions should be taken at European level to support the upskilling/retraining of existing workers to meet skills requirements for Europe’ digital transformation? – Ranked in Top 3

Use technology to enable lifelong learning 58% 57% 57% 58% 49% 68% 62% 57% and development of skills

Promote re-skilling/retraining programs for 51% 45% 48% 60% 55% 47% 63% 46% older age groups

Promote direct involvement of businesses 51% 51% 43% 52% 58% 49% 40% 57% in professional educational system (e.g., definition of professional education)

Invest in and promote digital learning 49% 51% 49% 51% 42% 53% 54% 47% and training (e.g., MOOC: massive online open courses)

Develop entrepreneurial skills 45% 43% 52% 34% 52% 43% 42% 47%

Develop workers’ mobility inside Europe 45% 53% 51% 45% 43% 40% 40% 46% (e.g., improvement of language skills, better synergies between national employment)

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28. Do you expect digital technologies to accelerate the development of external collaboration (e.g., crowdsourcing, open innovation) in the next three years?

Yes 85% 71% 85% 86% 89% 90% 89% 85%

No 15% 29% 15% 14% 11% 10% 11% 15%

29. How important are the digital technologies (connection of renewable energy to efficient smart grid, smart metering) to address the energy challenges Europe is facing? % answering ‘Critical’ or ‘Important’

Access to competitive energy 93% 86% 85% 97% 100% 95% 95% 94%

Energy efficiency 92% 88% 88% 98% 95% 95% 94% 90%

30. What priority actions should be taken at European level to boost the adoption of digital technologies to address energy challenges in Europe? - Ranked in Top 3

Promote energy efficiency 73% 71% 72% 80% 69% 82% 83% 62%

Support and invest in Smart Grids 61% 57% 57% 62% 66% 69% 66% 55%

Support investment in renewables 60% 73% 49% 52% 69% 47% 62% 69%

Support and invest in storage technologies 53% 39% 66% 68% 38% 51% 42% 59% (e.g., hydrogen)

Support the development of new 52% 61% 55% 38% 57% 52% 48% 55% transportation modes (e.g., Electric Vehicles)

31. Do you consider that digital technologies will improve the business access to finance?

Will improve access to corporate banking 69% 82% 74% 55% 80% 64% 63% 68%

Will improve access to capital markets 67% 65% 51% 51% 71% 65% 72% 82%

Will improve access to retail banking 65% 75% 68% 62% 71% 62% 58% 65%

Will improve access to venture capital 61% 65% 45% 54% 54% 56% 72% 74%

32. What priority action should be taken at European level to boost the usage of digital technologies to address business financing challenges? - Top priority

Facilitate the development of venture 41% 22% 42% 52% 35% 31% 48% 50% capital funding for digital businesses

Develop digital banking for SMEs 35% 49% 31% 29% 40% 30% 34% 34%

Develop adequate regulation for 24% 29% 28% 18% 25% 39% 18% 16% crowdfunding

33. How confident are you that public services in Europe will be able to leverage digital technologies to improve the quality of service to citizens and businesses in the next three years?

Very optimistic 6% 4% 5% 8% 5% 5% 2% 11%

Optimistic 62% 67% 49% 61% 55% 66% 61% 69%

Pessimistic 29% 25% 42% 31% 35% 26% 34% 18%

Very pessimistic

72

i European Commission, Economic Forecast Winter 2014 http://ec.europa.eu/economy_finance/publications/european_economy/2014/pdf/ee2_en.pdf

ii European Commission Economic Forecast, Autumn 2013 http://ec.europa.eu/economy_finance/publications/european_economy/2013/pdf/ee7_en.pdf

iii http://www.imf.org/external/pubs/ft/weo/2014/update/01/pdf/0114.pdf

iv EU Commission. See http://horizon2020projects.com/policy-research/eu-rd-investment-scoreboard-published/

v Conference Board, 2014 Productivity Brief. See http://www.conference-board.org/data/economydatabase/

vi http://ec.europa.eu/enterprise/policies/innovation/glossary/index_en.htm

vii National Science Foundation, “Science and Engineering Indicators 2014.” See: http://www.nsf.gov/statistics/seind14/

viii European Commission, “Economic Forecast”, February 2014. See: http://ec.europa.eu/economy_finance/eu/forecasts/2014_winter_forecast_en.htm. China data: Conference Board Total Economy Database, 2013. See: https://www.conference-board.org/pdf_free/economics/TED3.pdf

ix Barack Obama, “State of the Union Address 2014.” See: http://www.washingtonpost.com/politics/full-text-of-obamas-2014-state-of-the-union-address/2014/01/28/e0c93358-887f-11e3-a5bd-844629433ba3_story.html

x Innovation Union Scoreboard 2014, Executive Summary, p.5

xi National Science Foundation, “Science and Engineering Indicators 2014.”

xii 2014 Global R&D Funding Forecast, December 2013, Battelle and R&D Magazine www.rdmag.com page 3

xiii European Commission Digital Agenda Scoreboard 2013 http://ec.europa.eu/consumers/consumer_research/editions/docs/9th_edition_scoreboard_en.pdf And GSMA, “Mobile Economy Europe, 2013.” See: http://gsmamobileeconomyeurope.com/GSMA_Mobile%20Economy%20Europe_v9_WEB.pdf

xiv Eurostat data; The Consumer Conditions Scoreboard, 9th edition – July 2013, P.20.

xv EU Commission, “Digital Agenda for Europe Scoreboard.” See http://ec.europa.eu/digitalagenda/en/scoreboard

xvi Accenture, Major Italian Private Bank: Mobile Application for Financial Advisors. See: http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture-Major-Italian-Private-Bank-MAFA.pdf

xvii Accenture, EIH, Boosting European growth with Healthcare, Topics for European Symposium, October 2013

xviii Accenture, Realising the Full Potential of Smart Metering, 2013 http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture-Smart-Metering-Report-Digitally-Enabled-Grid.pdf

xix Accenture client experience. See: http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture-Builds-Business-Intelligence-Solution-French-Bank.pdf

xx OECD, “Innovation Scoreboard 2013.” See: http://www.oecd-ilibrary.org/science-andtechnology/oecd-science-technology-and-industry-scoreboard-2013_sti_scoreboard-2013-en

REFERENCES

73

xxi BUSINESSEUROPE statement to the Spring European Council on 20-21 March 2014 http://www.businesseurope.eu/content/default.asp?PageID=568&DocID=32817

xxii Accenture, “Digitizing the Value Chain for High Performance”, 2013. See: http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture-Digitizing-the-Value-Chainfor-High-Performance.pdf

xxiii http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture-Digitizing-the-Value-Chain-for-High-Performance.pdf

xxiv Accenture, PCO Innovation news release, October 2013 http://newsroom.accenture.com/news/accenture-to-acquire-leading-product-lifecycle-management-company-pco-innovation-to-help-clients-take-new-products-to-market-faster-and-more-efficiently.htm

xxv Accenture, Technology that matters, Harnessing the technology wave in banking, 2013

xxvi http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture-Builds-Business-Intelligence-Solution-French-Bank.pdf

xxvii Financial Times, The rise of digital bank, October 2013, http://www.ft.com/intl/cms/s/0/e2bf1534-3ce3-11e3-a8c4-00144feab7de.html#axzz2mILE2mQi

xxviii Accenture, “Technology that matters: Harnessing the technology wave in banking,” 2013. See: http://www.accenture.com/microsites/bankingtechnologyfutures/Pages/index.aspx

xxix Accenture, Everyday Bank, 2013 (Data sources from Tower Group, EMFA)

xxx Accenture, “Technology that matters: Harnessing the technology wave in banking,” 2013. See: http://www.accenture.com/microsites/bankingtechnologyfutures/Pages/index.aspx

xxxi IEA, World Energy Outlook, 2013

xxxii IEA international Energy Agency, WEO 2013

xxxiii GTM Global Smart Grid Technologies and growth markets 2013-2020

xxxiv Accenture, Smart Metering potential, 2013, (results from Accenture utilities executive survey

xxxv Accenture, Delivering Public Service for the future, October 2012

xxxvi Accenture, Digital Government: Pathways to Delivering Public Services for the Future, 2014. See: http://www.accenture.com/us-en/Pages/insight-digital-governmentpathways-delivering-public-services-future.aspx

xxxvii UK Cabinet Office, “Digital Efficiency Report,” Nov 2012. See https://www.gov.uk/government/publications/digital-efficiency-report/digital-efficiency-report

xxxviii See: http://www.portaldaempresa.pt/cve/pt

xxxix Accenture, Delivering Public Service for the future, October 2012

xli Accenture, “Achieving Digital Excellence in Public Service,” 2013. See: http://www.accenture.com/us-en/Pages/insight-achieving-digital-excellence-public-servicesummary.aspx

xlii Accenture Risk Management Research in Healthcare and Life Sciences. See: http://www.accenture.com/us-en/Pages/insight-global-risk-management-study-2013-era-greater-uncertainty.aspx

xliii Accenture, EIH, Boosting European growth with Healthcare, Topics for European symposium, October 2013

xliv Accenture Risk Management Research in Healthcare and Life Sciences. See: http://www.accenture.com/us-en/Pages/insight-global-risk-management-study-2013-era-greater-uncertainty.aspx

xlv Accenture client experience

74

xlvi Accenture estimates

xlvii Accenture, “Growth Strategies for a Digital World,” 2014. See: http://www.accenture.com/digitalstrategy

xlviii THE ECONOMIC IMPACT OF A EUROPEAN DIGITAL SINGLE MARKET FINAL REPORT, MARCH 2010, Copenhagen Economics, The European Policy Centre

xlix See: www.siliconrepublic.com February 2013

l European Commission, Eurostat, ttp://epp.eurostat.ec.europa.eu/statistics_explained/index.php?title=File:Graduates_from_tertiary_education,_by_field_of_education,_2010_(1).png&filetimestamp=20121001105919

li Accenture Institute for High Performance, Where will all the STEM talent come from, May 2012 http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture-Where-Will-All-the-STEM-Talent-Come-From-FINAL.pdf#zoom=50

lii European Council Conclusions, Brussels, 24 October 2013. See: http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/139197.pdf

liii “Old heads, New ideas,” 100thoughts HSBC. http://www. yourencore.com/about-yourencore/news/HSBC-100- Thoughts.pdf

liv Cf Startup ecosystem report, 2012 for a data based classification of clusters (“Startup Ecosystem Index”)

lv Accenture, Entrepreneurial Innovation report for G20 YEA Summit, 2013. See: http://www.accenture.com/g20yea

lvi Accenture, Entrepreneurial Innovation report for G20 YEA Summit, 2013. See: http://www.accenture.com/g20yea

lvii Massolution 2013, Crowdfunding Industry Report, http://research.crowdsourcing.org/2013cf-crowdfunding-industry-report.

lviii European Commission, COM (2014) 172 final.

lix Accenture, “New Businesses, New Competitors: Germany’s Top500 and the DigitalChallenge,” 2013. See: http://www.accenture.com/Microsites/wachstum/de-en/Pages/index.aspx

lx BMW. See Intelligent Solutions for Everyday Life on the Move” http://www.bmw.com/com/en/insights/corporation/bmwi/mobility_services.html

lxi Accenture Digital Government Pathways to Delivering Public Services to the Future,2014. See: http://nstore.accenture.com/acn_com/Accenture-Digital-Government-Pathways-to-Delivering-Public-Services-for-the-Future.pdf

lxii Ibid

lxiii EU Commission, “Digital Agenda”. See: http://ec.europa.eu/digital-agenda/en/scoreboard

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