McKinsey: What are the biggest disruptive current Europe is facing and how can the region overcome these vulnerabilities?
Sven Smit: There’s a long list of issues facing Europe at the moment. I don’t think we’ve confronted this many issues since the 70s. The particular area presenting a new set of issues is the fact we’re now facing a supply shortage. We have supply shortages in semiconductors, materials, energy, and so on—and supply shortages take time to resolve. And that, to me, is why we are in a very special moment.
The other crises that I lived through, the financial and the dot.com crises, were largely demand cycles with a psychological amplification. But this one is physical, so we have to solve the physics of this, and that’s why it’s a bit more complex. But as a result, we will have more fundamental innovation as we confront the physicality of this crisis, which is much more clarifying to the mind than just esoterically debating elitist issues.