McKinsey recently held its second Europe Media Day in our Brussels office. Our largest media day ever, the event drew dozens of journalists, including bureau chiefs, columnists, and editors from 15 countries, who spent the day moderating panels and participating in discussions and interviews.
McKinsey partners and experts representing 12 countries shared insights with the standing-room-only audience on topics that reflected the wide range of our research, from inflation to decarbonization, innovation, security, and economic inclusion. It was also an opportunity to preview our latest perspective on Europe, “Securing Europe’s competitiveness: Addressing its technology gap,” published with McKinsey Global Institute (MGI).
Video
Lifting Europe’s Ambition
McKinsey also used the event to launch its new, pan-European publishing series, Lifting Europe's Ambition. As part of his opening remarks, Europe managing partner Magnus Tyreman introduced the flagship series, explaining to journalists that the series will be a multi-year, multi-media project covering the most important issues on European business leaders’ and policymakers’ minds. It features a dedicated microsite where visitors can find all of McKinsey’s European insights in one place, along with a video interview series featuring McKinsey leaders and external experts.
Magnus continued with his opening remarks by noting the meeting had been planned and cancelled twice due to the pandemic; for this third time, the moment was auspicious. “Never has there been so much uncertainty. We are experiencing a convergence of issues—war, inflation, an energy crisis, and geopolitical tensions are at their highest level,” explained Magnus Tyreman, the managing partner of McKinsey Europe in his opening remarks. “We will not return to normal. This is the end of an era.”
The second panel examined how the war in the Ukraine was upending the development of net zero pathways; another discussion posited the industries in which Europe could lead; in the closing session, the managing partners from France, Germany and the UK shared findings on what keeps CEOs up at night in their respective economies.
While European leaders have shown great resolve in responding to the war and resulting shocks, they will need to build the same momentum to face the region's ́slow-motion technology crisis, as outlined in our report. Europe has many high-performing companies, but in aggregate, they are falling seriously behind. Between 2014 and 2019, large European companies with more than a billion in revenue were 20 percent less profitable, grew revenue 40 percent more slowly, and spent 40 percent less on R&D, compared with US firms.
We strive to provide individuals with disabilities equal access to our website. If you would like information about this content we will be happy to work with you. Please email us at:
McKinsey_Website_Accessibility@mckinsey.comSolveigh Hieronimus, McKinsey senior partner
“In this study, instead of looking at Europe through the lens of sectors, we look at it through the lens of 10 transversal or interlinking technologies,” explains Solveigh Hieronimus, a senior partner. “Europe leads on only two of these—next generation materials and clean tech. We have strong STEM talent…a strong bio industry…we should be able to gain excellence here. However, there are some technology areas where it is too late to lead, particularly where we have not invested in the past few years.”
While this trend is not new, the issue now is that technology is overtaking almost every sector, and reshaping competitive dynamics.
Eric Hazan, a senior partner, outlined the reasons for this slow rate of growth: “The region leads in so many areas: cleantech, materials, the bio revolution, advanced industries, and more. Our human capital is second to no one. But there’s the question of scale, particularly when it comes to technology investment. There are few established ecosystems for sharing expertise and data, and our regulatory environment and scarce risk capital don’t encourage disruption and innovation.”
We strive to provide individuals with disabilities equal access to our website. If you would like information about this content we will be happy to work with you. Please email us at:
McKinsey_Website_Accessibility@mckinsey.comTunde Olanrewaju, managing partner, McKinsey UK, Ireland and Israel
“It's not surprising that in such a challenging environment, 'resilience' comes up again and again as business concern,” points out Maria del Mar Martinez, a senior partner. “For businesses, this means having the ability and all of the levers—resources, flexibility, redundancy—to deal with adversity and shocks and continually adapt. Companies have to prepare not only for the coming recession, but also how to recover after it.”
At times throughout the day, the discussion turned existential. “Are we being too pessimistic? too focused on fragmentation and regulations? Maybe we should be looking more at our mindsets, correcting our self-image, and raising our levels of ambition?” These were just some of the questions raised by the audience. Everyone agreed that it will take bold action to solve the challenges facing Europe’s business leaders and policymakers and to lift the continent’s ambitions.