This year, Eurozone growth seems to have halved in the second quarter, returning to the slow pace seen in the latter half of 2018. While a weak industrial sector, downbeat investor confidence and a worsening global backdrop likely dampened momentum, fears of a hard Brexit continue to affect European companies. Many fear higher volatility, complexity and costs due to changing regulations and a reduction in export opportunities. A study by Germany’s Bertelsmann Foundation, predicts Germany and the UK will be the hardest hit, with estimated annual income losses of €10 billion and €57 billion per year, respectively, with total EU losses (excluding the UK) at €40 billion annually.
As a result, risks for European business remain high and include other political concerns. The European Business Climate reading on FXCM’s economic calendar shows how the market has been extremely volatile recently, which is an indication of how industries in the continent have been reacting to the recent geopolitical events. But despite Brexit and the continuing uncertainty, companies are excited about the new business potential, which in large part is driven by new technologies that are changing the way they do business.
Digitalisation and Going Paperless
Denmark is one of the most digitalised countries in the world and the most digital country in the EU. The Danish government has committed to go digital in every aspect, with paper being used only as a last resort. This has not only enabled business growth in the country, with businesses buying and selling from each other using online transfers, it has also saved a lot of time and money. In our post ‘Has the Time Run Out for the Heavy Briefcase’ we mentioned how 75% of companies do not have an accurate indication of how much time and money is spent on printing. Digitalisation can help by centralising all paper documents on one digital device.
AI Robotic Process Automation (RPA)
While digital businesses like Amazon UK and Google have a significant operational advantage in the native use of AI to keep costs low and drive exponential growth, born-analogue companies have struggled when it comes to operations. Now, with the advent of robotic process automation (RAP), which seamlessly integrates AI into business processes, companies can automate repetitive tasks. McKinsey estimates that over 60% of date collection and processing can now be automated with RAP. By being freed from repetitive work, employees and companies will be able to focus on more meaningful value-added work and deliver better customer service.
Driving Blockchain Innovation
When it comes to setting new trends and technological innovations, Berlin has positioned itself as an industry leader. In fact, Berlin could claim the title of Europe’s number one destination for tech startups. With a new company founded every 20 minutes, it is rapidly becoming known as a leading Crypto-Community. This thriving community provides infinite potential for blockchain investors and developers who want to improve existing processes. As a result, there is significant interest from investors across a variety of industries including cars, pharmaceuticals energy and the public sector that look to transform mass-market business processes using blockchain. Through intelligent contracts, an immutable ledger, and the streamlining of operational inefficiencies that businesses currently face, blockchain will continue to be an important part of digital transformation.
General Data Protection Regulation (GDPR)
A trend affecting all of Europe and in many ways global businesses is the European digital data protection standard which aims to provide huge layers of protection for its users and their private information. As of August of last year, 1/3 of companies were still not compliant with GDPR, including about 1,000 U.S. news sites which are blocked in Europe due to lack of compliance. Many companies don’t care enough about data security, which means informed customers will instead choose companies that truly care about protecting their data. GDPR is not only a European initiative, it is the start of a global trend that aims to hold companies responsible for how they treat privacy and personal data.