Why Europe’s best days lie ahead

Late last year, amidst all the good news about COVID-19 vaccines, I had an illuminating conversation with the CEO of a European manufacturer. Looking at me through my laptop screen during a video chat, he remarked that he was filled with hope for 2021, while at the same time having some anxieties about the road ahead: would Europe lag Asia and North America? What were the implications for his company’s strategy and resource allocation decisions? Is there a future for Europe and, if so, what are its foundations?

As chairman of PwC Europe, I am well aware of the tide of negativity that has swept our continent, parts of which have been very badly hit Clearly, growth will be uneven as the world bounces back from the pandemic. Based on the forecasts of 180 research institutes and other academic organisations, European Union GDP is likely to have shrunk Europe has to be realistic. We obviously lack big platform companies in technology like Alibaba, Amazon, Facebook, Google and Tencent, and having those will enable other regions, notably the US and China, to accelerate their recoveries. To catch up, we will need exceptional entrepreneurs, a more supportive regulatory environment, and a culture that prizes the opportunities in this space as much as individual privacy and the protection of data.

There are challenges in banking and financial services. Granted, thanks to increased capital requirements, the sector is more resilient than it was in 2008 and has provided the real economy with much needed liquidity in the wake of the latest crisis. Most players are striving to implement their digitisation agenda and to cut costs and consolidate within national borders, while the growth of fintechs and the incursions of big tech companies have injected new competition.

Nevertheless, structural weaknesses remain. Too often, the authorities have sought to mitigate risk This said, there is much to brighten the gloom. Innovation is in our European DNA, and we need look no further for inspiration than the brilliant scientists at Germany’s BioNTech who in partnership with Pfizer developed the first approved vaccine against COVID-19 based on BioNTech’s proprietary mRNA technology. European academics and commentators have been quick to see a correlation between business success on the one hand and diversity and inclusivity on the other, so it is noteworthy in my view that the husband-and-wife team who co-founded the company that allows new vaccine candidates to be developed more quickly than conventional ones are first- and second-generation immigrants from Turkey.