Europe has been tasked with many challenges as of late which have pushed industries to their limit. Maddie Walker, Industry X lead for Accenture in the UK and Ireland, shines a spotlight on where companies in Europe should be investing to increase and secure the region’s overall competitiveness.
Russia’s war on Ukraine, the pandemic and the energy transition has been testing Europe’s industry to the limit. They have faced forced-accelerated switches from physical to digital operations, soaring energy and material costs amidst economic instability, ongoing supply chain disruptions and the scarcity of skilled labour. As a result, companies and the wider industry have been questioning how they operate and have started to take decisive action to improve productivity and remain competitive.
According to recent research from Accenture, manufacturers and other industrial companies are reinventing their enterprises from the ground up. Relying heavily on advancements in automation, robotics, Artificial Intelligence and other technologies, they have kicked off holistic change programmes beyond single functions and isolated goals. Their transformation goals are not just resulting in better financial results but are also fostering innovation, increasing resilience and creating value for stakeholders, establishing ‘a new performance frontier’ that is agile, flexible and predictive.
The transformation of Europe’s industrial sector is one of the key themes that came out of this year’s Hannover Messe 2023, the trade fair for industry and technology. But, despite the changes being made, Accenture’s research paints an ambiguous picture:
• Manufacturers and other industrial companies in Europe are changing more ambitiously and holistically. Almost three-quarters (72%) have started far-reaching transformation programmes during the past two years, versus 64% of companies across other sectors. Over half (57%) said they wanted to achieve ‘a major step change that sets a new level of performance in the industry’ (vs. 45% overall).
• Companies in Europe rate their transformation efforts a success. When asked how successful their transformation was or is expected to be, manufacturers and other industrial companies in Europe rated their achievements on par with companies in other sectors and regions. A quarter said they had exceeded or will exceed the business case; almost 60% stated they had met or will meet the business case.
• Europe’s industry has invested more broadly than others in technology. During the past two years, companies have increased the implementation of key technologies – for example, cloud services (82% vs. 70% of global industrial sector companies) and AI and automation (76% vs. 64% of global industrial sector companies). The research shows similar leads in data, security and network and connectivity technology investments.
• Commitments to transformation remain strong. Even in a recession, 86% of Europe’s manufacturers and other industrial companies would accelerate their programmes (vs. 75% overall). For many, Metaverse and Web 3.0 technologies will be part of this ongoing enterprise transformation, as 61% said they were planning to implement these technologies within the next 12 months (vs. 53% of all companies).