Reappraisal of Global Markets
Business leaders are reappraising the attractiveness of global markets:
US. For the majority of CEOs in our interviews, the long-term attractiveness of the US as a market for investment has not diminished, despite short-term falls. Many point to the strength of the US’s innovation networks, the advantages of its further drives for deregulation, and its world-leading access to capital. Some also believe current policies will increase manufacturing capacity in the US. However, several view the US policy of reducing emphasis on renewable energy and climate change technology as short-sighted, leading to weakness in the future. They point to the US’s dependence on European technologies in certain sectors. Others point to the time it takes to reshore supply chains and build up US manufacturing capacity — it will not happen overnight, and the prevailing uncertainty undermines long-term business confidence. Whether the US administration will continue to seek to influence companies directly based on their political stance is also seen as a risk.
Europe. The European market is the target of widespread criticism for many business leaders, including those whose businesses are based in Europe. The biggest barriers are regulatory complexity, fragmentation, risk aversion, and the slowness of integrating technological innovation, which have compromised its competitiveness as a region for many years. Europe still drives change too slowly. However, some business leaders are still championing Europe, pointing to its underlying strengths in science and knowledge, as well as in green technologies.
China and Asia. Asia is seen as the next most attractive global region after the US. Many point to its growing strength in innovation and as a source of world-leading, high-quality suppliers backed by more capital — a very long way from its former position as a low-cost manufacturing location.
“The European market is the target of widespread criticism for many business leaders, including those whose businesses are based in Europe”
US
“The US is still hugely dynamic, big, innovative, with a lot of access to capital.”
[Industrial group]
“[The] US is most attractive, then SE Asia [Malaysia, Indonesia, or India]. Skeptical about reindustrialization policy in [the] US, but [it is] very successful in pushing innovation.”
[Industrial group]
“The federal government in the US encourages environments where people can get access to capital. Taxation mechanisms are different; the permit and regulatory regime is helping those guys. So that’s the challenge in Europe.”
[Aerospace group]
“If we were to consider [a] new manufacturing footprint in the US, between the moment we trigger that and the moment it will be operative, it will be at the end of the current administration.”
[Nutrition group]
Europe
“Europe may be a great opportunity, but most people are probably unfortunately deprioritizing Europe in the scheme of the world.”
[Asset management group]
“The problem in Europe is the regulatory framework.”
[Aerospace group]
“The intention is very good, but the way they try to solve it is not good. So it’s just bureaucracy, all those reports and ESG reports and double materiality.”
[Chemicals group]
“But the [European] regulations… what we have to do as a stock-listed company is unbelievable.”
[Construction group]
“International competitiveness has to be prioritized in Europe, top of the agenda again. There are lots of words, but we are waiting on deeds.”
[Manufacturing group]
“The US is far behind in smart cities, green energy, regeneration, solar wind energies — Europe is a leading group here.”
[Construction group]
China
“Whenever you talk to the Chinese customers or suppliers … they have better quality, they have better delivery accuracy, they have much more capital, and they can fund you with inventories and consignment stock.”
[Industrial group]
