complete study-presentation revitalising-the-european-dream.-a-corporate-view

European Executive Council

A CORPORATE VIEW

RevitalisingtheEuropean Dream

Brussels, 29 June 2011

Overview of the study

Re-energising the European economy

Reshaping the European social model

Redefining the European role in

international affairs

Re-vitalising the European Dream:

A corporate view

1

The State of Europe project was conducted in three steps, focusing on two outputs: a white paper and inputs for three roundtables

Survey of European business leaders

Interviews with policymakers and thought leaders

Analysis and synthesis of results

White paper:Revitalizing the

European dream: A corporate view

Roundtable discussions at

The State of the European Union

European Commissions and

Delegations

OECD

Academia

Business leaders

…

Survey sent to 38,000 European

business leaders from EU27,

Norway and Switzerland. Yield:

~2,000 respondents

Social roundtable: Reshaping the

European social model

International roundtable: Redefining the

European role in international affairs

Economic roundtable: Reenergising the

European economy

Approach

2

The online survey was sent to a wide community of business leaders across Europe

3%

Sweden

Romania

1%Portugal

Poland

1%Norway

2%Netherlands

Italy 8%

Ireland2%

Hungary1%

Greece

United Kingdom France

17%

Finland2%

Spain

Estonia

Denmark3%

Germany12%

Czech Rep.

Cyprus

Switzerland

3%

Bulgaria

1%

Belgium

5%

Austria

2%

Mix by countryMix by industry

20%

Education

Other

Business

Services

2%

3%

1%

Finance &

Insurance

18%

Information,

Comm. &

Technology

19%

Consumer

Goods

Energy, mining

& utilities

Transport

Automotive

4%

Agriculture, Fishing, Forestry

1%

Response Rate 5%, ~ 2,000

Female

10%

Male 90%

Mix by gender

Over 60

14%

50-59 25%

40-49

36%

30-39

23%

20-29

3%

Mix by age

Slovakia

Slovenia

Malta

Latvia

Luxembourg

Lithuania

Law/Justice & Public Admin.

Health & Other social serv.

Retail

Response Period: Feb., 28th – Apr., 1st 2011

Source: Booz & Company analysis

Survey questions revolved around four key themes

3

Emotional perceptions of

Europe

Reshaping the European social

model



Reenergising the European economy

Emotions with regard

to Europe

Perceptions of current

situation in Europe

(e.g., financial crisis,

unemployment)

European Union’s

position as a global

power, today and in

2030

Social policy

Labour policy with

regards to the

anticipated decline in

the EU workforce

Education system and

its evolution towards

2030

European economic

growth perspectives

and drivers

Economic policy

Climate and

sustainable energy

policy

Presence and

influence of the EU,

today and in 2030

– Regions of

focus

– International

aid policy

Potential new

member states by

2030

Trade policy

A solid majority of respondents have positive feelings about Europe

Note: Numbers may not add to 100% due to rounding.

Source: Booz & Company and INSEAD 2011 State of Europe Survey (1,914 respondents); Booz & Company analysis

All respondents

What are your emotions about Europe?

4

2%

100%

CH

31%

24%

31%

12%

UK

7%

18%

17%

41%

17%

NO

10%

27%

33%

30%

IT

13%

19%

50%

16%

NL

1%10%

21%

57%

10%

IE

12%

14%

53%

21%

DK

2%

12%

12%

49%

25%

RO

4%

21%

58%

17%

PT

4%

11%

10%

49%

26%

DE

3%5%

17%

47%

28%

ES

3%8%

14%

43%

33%

FR

3%

10%

11%

49%

27%

HU

8%

15%

54%

23%

PL

5%

18%

55%

23%

FI

3%

19%

69%

9%

SE

4%

18%

45%

33%

GR

10%

9%

43%

38%

BE

5%

13%

60%

23%

AT

2%5%

10%

45%

38%

BG

7%

7%

53%

33%

Avg

3%

10%

16%

48%

24%

Very negativeNegativeNeutralPositiveVery positive

72%

Concern dominates feelings about Europe’s current situation



All respondents

How do you feel about the current situation in Europe?

5

DK

7%

64%

8%

20%

CH

6%

63%

10%

18%

2%

UK

11%

56%

11%

20%

2%

PT

13%

65%

22%

FR

16%

58%

4%

22%

1%

NL

5%

70%

2%

24%

GR

19%

52%

4%

23%

1%

ES

11%

58%

6%

23%

2%

IT

8%

62%

5%

24%

1%

RO

65%

9%

26%

SE

8%

53%

12%

27%

IE

9%

56%

7%

26%

2% 100%

FI

3%

59%

6%

31%

PL

14%

45%

9%

27%

5%

BE

6%

56%

5%

31%

2%

AT

5%

38%

19%

38%

BG

13%

47%

33%

7%

NO

13%

43%

3%

37%

3%

DE

9%

37%

12%

43%

HU

8%

46%

46%

Avg

10%

55%

7%

27%

1%

AlarmedConcernedIndifferentConfidentEnthusiastic

Most respondents think that the European Union’s position today one of a second-tier power or even more limited



How do you see the European Union’s position today?

6

6%

100%

IT

40%

19%

19%

16%

BE

1%

34%

28%

19%

17%

DK

37%

24%

25%

14%

UK

1%

40%

17%

26%

15%

RO

4%

29%

25%

29%

13%

AT

2%

27%

27%

29%

15%

NL

6%

25%

24%

30%

15%

PL

36%

18%

14%

32%

HU

31%

23%

31%

15%

IE

35%

19%

19%

28%

FR

1%

37%

15%

26%

21%

NO

14%

38%

28%

21%

CH

26%

26%

32%

17%

DE

1%

28%

21%

23%

26%

FI

28%

22%

34%

16%

PT

3%

32%

15%

24%

26%

ES

4%

31%

14%

22%

29%

SE

14%

33%

35%

18%

GR

24%

16%

38%

22%

BG

20%

13%

27%

40%

Avg

2%

32%

20%

26%

20%

A group of countries with no influence

A group of countries with limited influence

A second-tier power

A major power

One of the main global powers

All respondents

Despite this, respondents are cautiously optimistic about the future



7

100%

CH

24%

29%

27%

20%

DK

2%

16%

33%

29%

21%

UK

4%

24%

22%

27%

23%

HU

46%

38%

15%

AT

17%

29%

26%

29%

NO

13%

32%

29%

26%

NL

14%

29%

27%

30%

FR

4%

14%

21%

35%

26%

IT

12%

26%

26%

35%

ES

3%

14%

22%

32%

30%

BE

7%

28%

37%

26%

DE

2%

14%

20%

29%

36%30%

BG

14%

14%

7%

29%

36%

IE

14%

19%

24%

43%

FI

3%

10%

19%

48%

19%

PT

3%

13%

15%

31%

39%

PL

10%

15%

55%

20%

SE

6%

16%

42%

33%

RO

9%

13%

39%

39%

GR

10%

7%

31%

51%

Avg

2%

14%

22%

31%

A group of countries with no influence

A group of countries with limited influence

A second-tier power

A major power

One of the main global powers

How do you see the European Union’s position in 2030?

All respondents

61%

8

While business leaders favour EU leadership on monetary and budgetary issues, they are more reluctant to delegate social matters

In which fields should the EU prevail over national states?

Source: Booz & Company and INSEAD 2011 State of Europe Survey (2,030 respondents on monetary; 2,020 on budgetary; 2,017 on industry; 2,007 on educational; 2,005 on public health and 2,003 on social); Booz & Company analysis

13%

26%

35%

Industrial policy

16%

35%

15%

Budgetary policy

10%

44%

20%

Monetary policy

9%

40%

38%

41% 42% 42%

Social welfare

policy

17%

32%

9%

Educational

policy

17%

27%

14%

Public health

policy

16%

33%

11%

78%64%

48% 44% 41% 41%

Economic and business issues Social issues

Agree Disagree Strongly disagreeStrongly agree

Respondents from early EU member states and the Eurozone tend to be more inclined to delegate policy to the EU

GR

73%79% 74%

Ø 56%

UK

38%

CH

39%

NO

41%

PL

43%

DK

44%

SE

46%

DE

46%

IE

50%

FI

50%

NL

51%

AT

57%

ROBG HU

63%

PT

64%

FR

61%

IT

71%

ES

72%

BE

64%

In which fields should the EU prevail over national states?% of strongly agree and agree

Overall

75%

DE

76% 71%

DK

Ø 79%

UK

47%

IE

62%

CH

63%

HU

69%

SE

71%

ROPL

83%

AT

77%

NONL

84%

FI

84%

PT

85% 73%93%

BG

93%

IT

94%

FR

94%

ES

96%

BE

97%

GR

Monetary

CH

55%

DK

56%

IE

57%

DE

58%

NL

60%

PL

64%

RO

67%

AT NOFI

69%

HU

69%

PT

69%

FR

72%

IT

81%

GRBE

84%85%

BG

87%

ES

Ø 66%68%

UK

36%50%

SE

52%85%

29%

NL

30%

PL

32%

SE

34%

NO

34%

UK

40%

FR

44%

AT

45%

FI

46%

BE

47%

RO

58%

IT

59%

ES

59%

HUPT

63% 62%

BG

79%

GR

Ø 45%

DKIE

20%25%

DE

28%

CH

73%

32%

DE

34%

UK

35%

FI

41%

SE

42%

RO

46%

IE

48%

AT

48%27%

49%

NL

52%

DK

58%

FR

59%

ES

62%

IT

63%

HUGR

70%

BGBE

81% 71%

PT

Ø 51%

NOCH

29%

PL

69%

Social

Public

health

Industry

ES

63%

Ø 40%

UK

12%

PL

14%

NO

18%

CH

18%

NL

27%

UK

30%

SE

30%

FI

31%

DE

34%

IE

37%

AT

41%

HU

46%

GR

48%

FR

53%

PT

54%

BE

55%

IT

58%59%

ROBG

64%

Education

9Countries which entered after 1973 or are not €-zone membersCountries which joined prior to 1973 or €-zone members


Re-energising the European

economy





A corporate view

Business leaders responded to questions around growth prospects and drivers as well as economic and sustainable energy policy

10

European economic growth and drivers

What are business leaders’ expectations for growth? How

realistic are those expectations? How do they vary?

What key growth drivers would be most effective to achieve high

Europe-wide growth?

Economic policy

Sustainable energy policy

How can we avoid new Eurozone crises?

In which areas should EU policy prevail over nation states?

By 2050, the EU objective is that 40-80% of energy will be

renewable energy– what will be the outcome of this policy?

How could the EU leverage sustainable energy to foster foreign

investments inside the EU?


economy

European economic growth and

drivers

Economic policy

Climate and sustainable energy policy


A corporate view

11

Respondents believe that slow growth (less than 2%) is structural –results biased by local conditions

All respondents

74%

26%

Slow growth is

structural in Europe

The current

economic slowdown

is temporary

% of respondents who

believe slow growth

is structural

100%

80%

60%

20%

0%

Forecasted ’09-’12 GDP growth

4.5%4.0%

40%

3.0%2.5%2.0%1.5%1.0% 3.5%0.5%0.0%-2.5%

HURO

NL

PT SEIE

PLDKES

DEUKGR

BE BGATFRIT

National GDP growth forecasts and expectations of slow growth 1)

1) Responses by country with sample size > 10.

Source: Global Insight data and forecasts, Booz & Company and INSEAD 2011 State of Europe Survey (2,034 respondents); Booz & Company analysis

What are, in your opinion, the growth perspectives for the EU towards 2030?

Avg. 74%

Forecasted growth is

higher than 2% but

~75% of respondents

have more pessimistic

expectations

Forecasted growth is

~2% but half of

respondents have more

optimistic expectations

Forecasted growth and respondents’

expectations are aligned

Reenergising the European economy – Growth

12

Across countries and industries, decision makers strongly agree that innovation and SME activity are key to fostering high growth

Note: Numbers may not add to 100% due to rounding. According to the European Commission’s annual SME Performance Review (2009), SMEs are defined as ‘enterprises in the non-financial business economy that employ less than 250 persons.’

Source: Booz & Company and INSEAD 2011 State of Europe Survey (2,035 respondents on innovation; 2,018 respondents on boosting SME participation; 2,000 respondents on budgetary discipline; 1,966 respondents on share of exports in GDP; and 2,015 on Turkey); Booz & Company analysis

13%21%

42%

100%

Enlarge the Union to

high growth countries

(e.g., Turkey)

24%

26%

8%

Foster share of

exports in GDP

4%

56%

19%

Focus on budgetary

discipline of states

(e.g., debt)

2%

50%

35%

Boost SME participation

in economy

1% 5%

43%

52%

Aggressively invest

in innovation

1% 4%

31%

64%

All respondents

Strongly disagreeDisagreeAgreeStrongly agree

What would be the best strategies to reach high growth in Europe?


95% 95%85%

75%

34%

13

Regardless of home country R&D intensity, there is broad consensus that Europe must aggressively invest in innovation

What would be the best strategies to reach high growth in Europe?- Aggressively invest in innovation

3.4%3.2%3.0%2.8%2.6%2.4%2.2%2.0%1.8%1.6%1.4%1.2%1.0%0.8%0.6%0.4%0.2%

94%

HU

RO

PT

IE

FI

GR

DK

AT

PL

SE

BE

NL

ES

IT

FR

UK

% of respondents

who agree

investment in innovation

drives growth

100%

99%

98%

97%

96%

95%

93%

0.0%

92%

91%

81%

80%

R&D as % of GDP (2008)

3.8%3.6%

DE

Level of R&D and enthusiasm about innovation1)


Note: According to the European Commission’s annual SME Performance Review (2009), SMEs are defined as ‘enterprises in the non-financial business economy that employ less than 250 persons.’

Source: Eurostat data, Booz & Company and INSEAD 2011 State of Europe Survey (2,035 respondents); Booz & Company analysis

Avg. 95%


21%

8%4%

100%

Select priority industries

for the R&D agenda

55%

48%

Create crossborder

centres of excellence

40%

1%

Foster collaboration between

universities and companies

5%

31%

43%

2%

42%

Increase the share

of applied research

0% 3%

43%

54%

14

Most respondents share common views on how to leverage innovation to drive EU growth


Source: Booz & Company and INSEAD 2011 State of Europe Survey (1,953 respondents on universities; 1,950 on applied research; 1,946 on centres of excellence and 1,945 on priority industries); Booz & Company analysis

Strongly disagreeDisagreeStrongly agree Agree

All respondents

How can innovation drive the EU growth over the next 20 years?

97% 95% 90%74%


15

Decision makers believe SMEs are a lever of future growth -regardless of the current level of SME participation

What would be the best strategies to reach high growth in Europe?- Boost small and medium enterprise participation in economy

Note: According to the European Commission’s annual SME Performance Review (2009), SMEs are defined as ‘enterprises in the non-financial business economy that employ less than 250 persons.’

Value added is defined as ‘the gross income from operating activities after adjusting for operating subsidies and including indirect taxes. Value adjustments (such as depreciation) are not subtracted. This is equivalent to gross domestic product in macro-economic analysis.'

Source: European Commission data on SME Performance Review, Booz & Company and INSEAD 2011 State of Europe Survey ( 2,018 respondents); Booz & Company analysis

Share of SME valued added and positive opinion about SME activity

By country

98%

98%

97%

97%

97%

97%

96%

96%

95%

94%

94%

92%

91%

91%

90%

89%

88%DK

AT 31%60%

PL 39%52%

DE 39%53%

HU 40%52%

SE 38%56%

PT 27%67%

20%68%

IT 18%72%

IE 44%52%

UK 45%51%

RO 54%42%

FI 43%54%

NL 35%62%

ES 29%68%

GR 24%73%

FR 42%55%

BE 40%58%

% of respondents who ’agree’ or ’strongly agree’Share of SME value added (2008)

Positive opinion about SME activity

By industry

91%

91%

92%

93%

94%

94%

94%

95%

95%

95%

96%

97%

100%

Finance

Other

Info. Com & Tech

Consumer Goods

Education

% of respondents who ’agree’ or ’strongly agree’

Transportation

Automotive

Retail

Law & Justice

Health

Energy

Business Services

Agriculture


0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110% 120% 130% 140% 150%

% of respondents

who agree budgetary

discipline drives growth

95%

90%

85%

80%

75%

65%

Debt as % of GDP (2010)

HU

RO

PTIE

FI

GR

DKAT

PL

SE

BE

NL

ESIT

FR

UK

DE

16

At the same time, Europe should emphasize budgetary discipline –though results suggest some national bias

What would be the best strategies to reach high growth in Europe?- Focus on budgetary discipline of states (e.g., low level of debt)

Level of debt and positive opinion about budgetary discipline 1)

Low and medium levels of debt

with the highest level of

agreement with

statement

Avg. 85%


Source: Eurostat and Global Insight data, Booz & Company and INSEAD 2011 State of Europe Survey (2,000 respondents); Booz & Company analysis

High level of debt with high

level of agreement with

statement


17

Nearly 80% of respondents agree that exports fuel economic growth - except for French respondents who are neutral

What would be the best strategies to reach high growth in Europe? - Foster share of exports in GDP

55%50%45%40%35%30%25%0%

SE

ES

RO

PT

45%

NLITIE

HU

GR

DE

FR

FI DK

BG

BEAT

% of respondents

who believe in

fostering the exports

95%

90%

85%

80%

75%

70%

65%

40%

35%

30%

PL

Average share of export in GDP

(’00-’10)

90%85%80%75%70%65%60%

Share of exports in GDP and enthusiasm towards exports 1)

High export countries

whose respondents are

optimistic about exports



50%

Avg. 78%


Low to medium export countries whose

respondents are strongly enthusiastic

about exports

18

A majority feel that expanding the EU to include neighbouring high growth countries would not stimulate growth

All respondents

8%

26%

42%

24%

-16pp

Strongly agreeAgreeDisagreeStrongly

disagree

What would be the best strategies to reach high growth in Europe? - Enlarge the Union to high growth countries (e.g., Turkey)

41% 43% 42%32%

100%

Academia

19%

29%

21%

Private sector

7%

26%

24%

NGO

10%

24%

24%

Government/

International

organisation

10%20%

29%

Respondents by sector

Strongly agreeAgreeDisagreeStrongly disagree

77%42%

50% 46% 53% 51% 49% 40% 45% 34%50%

30%38% 42% 39% 31% 36%

44% 39% 32%

IT

10%

33%

PL

21%

PT

13%

30%

9%

26%

UK

14%

41%28%

19%

ES

10%

30%

19% 18%

NL

11%

29%

SE

23%

RO

9%

26%

10%

35%

FI

6%

39%28%

16%

DK

3%

31%

32%13%

CH

8%

22%

IE

24%

NO

3%

27%14%

30%

AT

5%

33%

24%

22%

BE

9% 100%

3%

26%

20%

BG

7%

20%

20%

GR

26%

28%

DE

6%

20%

25%

FR

4%

19%

34%

HU

15%

8%

Respondents by nationality 1)





66%


economy


Economic policy

Climate and sustainable energy policy


A corporate view

19

Respondents call for the reinforcement of the stability pact with the use of penalties for failure to comply

How could we avoid other Eurozone crises?- Strictly enforce the stability pact, use penalties, revoke voting rights and exclude risky states



50%

60%

70%

80%

90%

100%

10%5%0%

HURO

PT

% of respondents who agree that budgetary discipline is necessary

90%80%70%60%50%45%35%30%25%20%15%

FR UK

DE

IE

IT

NL

ES

FIBE

PL

SE

GR

AT

DK

40%

Agreement on need to reinforce stability pact vs. Need for budgetary discipline1)

Avg. 85%

Avg. 80%

50%

60%

70%

80%

90%

100%

0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11%

HU

RO

Deficit as % of GDP (2011)

% of respondents

who agree that

the stability pact

should be reinforced

PT IE

FI

GR

DKATPL

SE

BE

NL ES

IT FR

UK

DE

Agreement on need to reinforce stability pack1) vs. National deficit

Low to medium deficit and

strong support for reinforcing

the stability pact

High deficit and less support for

reinforcing the stability pact

Avg:80%

% of respondents

who agree that

the stability pact

should be reinforced

Reenergising the European economy – Economic policy

20

There are differences in opinion concerning the financial safety net: Only respondents from high debt countries wish to reinforce it

How could we avoid other Eurozone crises?- Extend the current financial safety net supporting Eurozone stability




32%31%35%41%

10%

18%20%

48%14% 100%

Over 60

9%

47%12%

50-59

12%

44%13%

40-49

14%

40%11%

30-39

15%

34%

20-29

All respondents


62% 44% 51% 57% 59%

Debt burden and support for reinforcing financial safety net 1)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110% 120% 130% 140% 150%

HU

RO

PT

IE

FI

GR

DK

UK

DE

80%

90%

% of respondents

who agree on reinforcing

the financial safety net

70%

60%

50%

40%

0%

Debt as % of GDP (2010)

ITES

NL

BE

SEPL

AT

FR

Countries with high debt and high support for

reinforcing the financial safety net

Countries with low or

medium debt and against

reinforcement of the

financial safety net


21

With the exception of U.K. respondents, the majority of Europeans feel that the EU should prevail on budgetary policy

ROPT

IE

FI

GR

DK

ATPL

SE

BE

NL

ESIT

FR

UK

DE

Debt in % of GDP (2010)

% of respondents

wishing the EU

to prevail on budgetary policy

HU

Debt burden and Prevalence of the EU on budget policy 1)



Respondents from high debt

countries who strongly

agree that the EU should

prevail on budgetary policy

Respondents from

low debt countries are

more evenly divided

on EU budgetary

prevalence

Anglo-

Saxon

model

In which fields should the EU prevail over national states?- Budgetary

50%

Avg. 66%


22

Eurozone respondents tend to favour European monetary policy more strongly

% of respondents who believe the EU should prevail over national states for monetary policy% of ‘strongly agree’ and ‘agree’

UK

77%

HU

69%

47%

RO

71%

SE IE

71%

CH

63%

PL

73%

62%

DK

75%

DE

76%

NOAT

83%

NL

84%

FI

84%

PT

85%

FR

93%

BG

93%

IT

94%

GR

94%

ES

96%

BE

97%

Non-EurozoneEurozone

Avg. 79%

1) The Guardian ('Poll shows little support for joining euro despite pound's fall', 2 Jan. 2009)



23

Eurozone candidate countries wish to strengthen entry criteria and do not seek to include all European countries in the Eurozone

How could we avoid other Eurozone crises?- Strengthen the entry criteria to the Eurozone

33% 36% 46%

73%

27%

100%

HU

38%

15%

PL

5%

45%

14%

RO

4%

38%

25%

BGAverage

2%

14%

45%

39%

Note: Numbers may not add to 100% due to rounding. Only EU member states which are not members of the Eurozone, do not have an ‘opt out’ (U.K., Sweden, Denmark) and have more than 10

respondents are shown.


53%

58% 41%31%

100%

HU

31%

38%

PL

23%

36%

RO

13%

25%

4%

BG

27%

13%

7%

How could we avoid other Eurozone crises?- Include all European countries in the Eurozone to limit

competition with other European currencies



Average

6%

21%

49%

24%


economy


Economic policy

Climate and sustainable energy

policy


A corporate view

Respondents have mixed views on how effective current EU renewable energy policy will be

By 2050, the EU objective is that 40-80% of energy will be renewable energy, what do you think will be the outcome of this policy?

Respondents by country


Source: International Energy Agency data, Booz & Company and INSEAD 2011 State of Europe Survey (2,030 respondents); Booz & Company analysis

24

27%

DE BE

22%20%

PL

36%

47% 42%

45%

PT IT

42%

15%

31%33%

56%

29%

NO

31%

38%

27%

NL

31%

14%

RO

45%

17%

54%

20%

HUESGR

15%

UK

40% 37%38%

58%

28%

SE

22%

26%

38%31%31%

CH

100%

41%

40%

14%

Avg

41%

BG

27%

38%

23%

16%

30%

38% 35%

40%

DK AT FR

53%

25%31%

42%48%

28%

37% 33%

24% 23%

42%

37%

FI

49%

31%

IE

21%

33%

40%

37%

The EU will lack execution capabilities

EU companies will pay to meet the targets

EU companies will benefit from this energy policy

Reenergising the European economy – Climate and sustainable energy policy

32%

47%

7%

Strengthen education and

skills of the workforce

30%

17%

50%

10%

6%

42%

38%

Create leadership in

technological innovation

20%

1%

Reinforce specialisation by

country (wind, water, solar)

100%

1% 4%

39%

56%

25

Leadership in innovation and strengthening the Eur. skill base are considered to be the best ways to attract FDI in sustainable energy


Source: Booz & Company and INSEAD 2011 State of Europe Survey (2,031 respondents on innovation; 2,022 on education; 2,018 on specialisation and 2,013 on subsidisation). Booz & Company analysis

All respondents

DisagreeAgree Strongly disagreeStrongly agree

How could the EU leverage sustainable energy to foster foreign investments inside the EU?

95% 92%

58%

36%

Reinforce subsidised policy

to foster production and

consumption


With the exception of Poland, respondents look to the EU for a unified position on climate



All respondents

On which topics should the EU take a unified position to increase its voice in international institutions? - Climate and sustainable energy

26

1%1%

6%

24%

33%

HU

15%

23%

62%

UK

8%

7%

36%

49%

FR

2%10%

36%

52%

CH

4%6%

47%

43%

DK

7%4%

28%

61%

NL

1%9%

31%

58%

AT

5%5%

31%

60%

SE

2%7%

33%

58%

ES

5%4%

34%

57%

DE

3%6%

40%

51%

100%

PL

24%

19%

IT

4%5%

38%

54%

RO

8%

38%

54%

BG

7%

40%

53%

FI

6%

26%

68%

NO

48%

45%

BE

6%

27%

67%

GR

3%

28%

68%

PT

3%

33%

63%

IE

2%

37%

61%

Avg

4%6%

36%

54%

Disagree Strongly disagreeAgreeStrongly agree





model




A corporate view

Respondents were asked key questions about their views on the European social model

27


Should EU member states share a common social model? If so, what

would it entail and what should it resemble?

What trade-offs would be implied/ required?

Declining workforce

Education

The EU is expected to face a deficit of 20.4m workers by 2060. How can

this be offset to guarantee the balance of our social model?

Should we use subsidies to provide the unemployed and with skills to

contribute to the labour market?

What about encouraging extra-EU migration or expanding the EU’s

borders to provide easy access to labour?

How will European education evolve in the 2030 horizon?

How well does today’s education fit with the needs of business? How do

business leaders expect this relationship to evolve?

Will we be able to close the education gap between Eastern and

Western Europe?


model


Declining European workforce

Education


A corporate view

28

While a majority indicate that the EU should strive for a common social model, they were not aligned on which model to choose



10%

40%

FI

47%

13%

41%

SE

38%

21%

41%

PT

42%

46%

13%

HU

46%

38%

15%

ES

38%

42%

20%

BE

44%

23%

33%

IT

31%

33%

35%

NL

49%

15%

36%

IE

21%

50%

29%

RO

46%

25%

29%

GR

51%

19%

30%

100%

NODK

34%

22%

44%

DE

23%

25%

52%

CH

14%

33%

53%

AT

44%

20%

37%

UK

18%

42%

40%

FR

42%

18%

40%

50%

BG

40%

7%

53%

PL

9%

36%

55%

Avg

33%

29%

38%

Strong welfare stateFlexible labour marketNo common social model

Towards which social model should the EU strive?Respondents by country

62%


model



Education


A corporate view

29

To compensate for the decline in the Eur. workforce, respondents are much less willing to enlarge the EU than welcome extra-EU migrants


Source: Booz & Company and INSEAD 2011 State of Europe Survey (1,949 respondents on reintegration of unemployed; 1,944 on female integration; 1,942 on extra-EU migrations and 1,938 on potential new members); Booz & Company analysis

22% 25%30%

40%

Leverage the

demographic growth of

potential new members

19%

32%

100%8%

Resort to extra-EU migrations

12%

47%

10%

Subsidise female

integration in the workforce

8%

50%

18%

Subsidise reintegration of

unemployed in the labour market

8%

54%

16%


All respondents

The EU workforce will decline by 20.4 million workers (2020-2060). How to offset this

decrease to guarantee the balance of our social model?

70% 68%57%

40%

30

With the exception of the Swiss, a majority of respondents approve of subsidies to reintegrate the unemployed in labour market



- Subsidise reintegration of unemployed in the labour market

0%

20%

40%

60%

80%

100%

8%7%6%5%4%0%

Unemployment rate, Jan. 2011

15%14%13%12%11%10%9%

CHPL HU

ITDENL

PTFRATNO ROUK DK IE

BE BGSE

GRFI

Unemployment growth rates and opinions on subsidies to reintegrate the unemployed1)2)

%

1) Responses by country with sample size > 10. 2) Statistics for Greece and Romania: Dec. 2010. 3) Selected industries.

Source: Data: Eurostat, IMD, WE, Cedefop. Booz & Company and INSEAD 2011 State of Europe Survey (1,949 respondents); Booz & Company analysis

Transportation

65%

Health

67%

Bus. Services

70%

Agriculture

71%

Education

79%

% of jobs

needed7.0% 6.5% 21.5% 9.7% 25.9%

Opinion on subsidies for reintegration of the unemployed3)

% of resp. favouring

subsidies to reintegrate

unemployed into workforce

50%

Avg. 71%

31

Similarly, subsidizing female integration in the workforce is privileged by respondents from all countries except Switzerland



- Subsidise female integration in the workforce

20%

40%

60%

80%

100%

0%

CH

PTPLES DK

Female participation

in workforce, 2010

96%95%94%93%92%91%90%89%88%87%86%85%84%83%82%81%80%79%78%77%76%75%74%

% of resp.

wishing to subsidise

female integration

SEUK DEIT IE

73%

BE FRATGR FI

NL

Female participation in the labour force and approval for subsidies to reintegrate

women into the labour force1)2)3)

%

1) Responses by country with sample size > 10. 2) January 2011 for Switzerland. 3) Female participation is defined as 'female-to-male participation ratio in the labour force.'


Source: Data: EVA, IMD. Booz & Company and INSEAD 2011 State of Europe Survey, (1,944 respondents); Booz & Company analysis

26%

Female

14%9%

49%

17%

57%

Male

28%

Male vs. Female respondents %

27%8%

Total respondents

100%

50%

18% Strongly agree

Agree

Disagree

Strongly disagree

All respondents%

Avg. 68%

32

Most respondents see extra-EU migration as a viable option to address the future needs of the labour market



- Resort to extra-EU migration

Additional migrants needed by 2020 and opinion on extra-EU migration1) 2)

%


2) January 2011 for Switzerland. Migration needed to maintain the active pop. at 2008 level / Expected migration for 2008-2020 - Result is % of 2008 active pop.

Source: Data: Eurostat, IMD, WEF, Cedefop. Booz & Company and INSEAD 2011 State of Europe Survey (1,942 respondents); Booz & Company analysis

0

10

20

30

40

50

60

70

80

90

Additional migrants needed by 20202 (thousands)

1009080706050403020100

SE

RO

PTPLNL

IT

IE

HUGR

UK

FR FIES

DK

DE

BE

AT

Avg. 57%

% of resp. wishing to resort

to extra-EU migration

Relative number of migrants needed (min. 857k, max. 18,208k, avg. 6,207k)

33

Only 41% of respondents favour enlarging the EU to ease anticipated labour shortages–vs. 31% to stimulate economic growth



- Leverage the demographic growth of potential new members (e.g., Turkey)

25%20%0%

PL

SE

IE

IT

PT

UK50%

NL

RO

FI

DK

CH

NO

AT

BE

BG

GR

DE

FRHU

60%

55%

45%

40%

35%

30%

ES

0%

50%45%40%35%30%

Enlargement for growth vs. enlargement to compensate workforce%



Avg. 41%

% of resp. approving of EU

enlargement to compensate

workforce deficit

% of resp. approving of EU enlargement

to stimulate high economic growth

Avg. 31%

R²=0.358


model



Education


A corporate view

20%

30%

44%

100%

EU will be home to more top

100 universities (vs. 28 today)

4%

43%

10%

The education gap between Eastern

and Western Europe will close

3%

59%

8%

Education’s fit with business will improve

1%

66%

12%

34

Respondents are rather confident on the future competitiveness of the European education system in the world


Source: Times Higher Education (2010), Booz & Company and INSEAD 2011 State of Europe Survey (1,942 respondents); Booz & Company analysis

All respondents

How will the education system evolve towards 2030?

53%67%

78%


35

A strong majority believe that education’s fit with business will improve by 2030

50%

55%

60%

65%

70%

75%

80%

85%

90%

95%

Fit of today’s education system to business needs (from 1 to 7)

6.05.55.04.54.03.53.00

SE

RO

PLNO

NL

ITIE

HU

GR

UK

FR

FI

ESDK

DE

CH

BG

BE

AT

Expected improvement in education’s fit with business vs. current fit1)

%

1) Answer to the question 'How well does the educational system in your country meet the needs of a competitive economy? [1 = not well at all; 7 = very well] .

Source: WEF data, Booz & Company and INSEAD 2011 State of Europe Survey (1,942 respondents); Booz & Company analysis

% affirmative answers


- Education’s fit with business needs will be improved

4.0 4.3 4.8

Avg. 78%

36

A small majority thinks that the European universities will become more internationally competitive by 2030

75%70%65%60%55%50%0

SE

RO

PT

55%NL

IT

IE

HU

GR

UK

FR

FI

ES

DK

DE

BE

AT

75%

65%

60%

50%

45%

40%

PL

35%

% of 25-34 with a sec. or ter. education (2009)

95%90%85%80%

EU will rank more universities in the top 100 vs.

share of 25-34 years old with secondary or tertiary education%


% affirmative answers


- EU will rank more universities in the top 100 (currently 28)

Avg. 53%

R²=0.275







A corporate view

Respondents were asked about the political influence of the EU, prospects for EU enlargement and trade policy

37

EU presence and influence

What is the political influence of the EU today? What will it be in

2030?

Where should Europe focus its international presence and influence?

Should the EU pursue its international aid policy?

EU enlargement

Trade policy

Should the EU continue to expand its borders?

If so, which countries should be prioritised for entry by 2030?

What should be the trade policy of the EU?

Is free trade the best policy option for Europe?




EU enlargement

Trade policy


A corporate view

European business leaders believe that the EU’s political influence will increase by 2030

Note: Bolded countries are among initial six EU countries (Germany, France, Italy, Belgium, Luxembourg, Netherlands).

Source: Booz & Company and INSEAD 2011 State of Europe Survey ('Today': 1,924 respondents and '2030': 1,925 respondents); Booz & Company analysis

60%

50%

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

38%36%34%32%30%28%26%24%22%20%18%16%14%12%10%8%6%4%2%0%

SE

RO

PT

PL

NONL

55%IE

HU

GR

UK

FR

FI

IT

DK

DE

CH

BG

BEAT

ES

What is the political influence of the EU today? And what will it be in 2030?

% of respondents who thinks that the EU’s political influence is strong and global today vs. in 2030

Avg. 16%

Avg. 34%

In 2030

Today

R²=0.366EU founding

member states

38

y = x

17%15%15%

China

3%

35% 35%

3%

Russia

100%

46%

36%

IndiaEurope

45%

3%

47%

1% 4%29%

67%

31% 34%18%16%

Other Asia

25%100%

15%

4%

South AmericaMiddle East

6%

53%51%

42%

4%

49%

5%

29% 18%

Africa

Respondents would like to see Europe increase its influence worldwide, though not to the same extent in all regions


Source: Booz & Company and INSEAD 2011 State of Europe Survey ('Europe': 1,894 respondents; 'Russia': 1,881; 'India': 1,879; 'China': 1,888; 'Africa': 1,866; 'Middle East': 1,860; 'Other Asia': 1,803 and 'South America': 1,814); Booz & Company analysis

Agree Strongly disagreeDisagreeStrongly agreeStrongly agree

All respondents%


96% 82% 82% 80%

80% 78% 64% 60%

39

A majority of respondents believe that Europe should focus on the Middle East


- Middle East

50%

55%

60%

65%

70%

75%

80%

85%

90%

Oil imports from the Persian Gulf as a share of total energy consumption

6.0%5.55.04.54.03.53.02.52.01.51.00.50

SE

ITIE

HU

GR

UK

FR

FI

ES

DKDE

CH

BE

AT

PL

PT

NL

NO

Presence/influence in the Middle-East vs. national oil imports from the Persian Gulf1 in the total energy consumption%

1) The Persian Gulf countries include: Bahrain, Iran, Iraq, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates.

Source: Europe’s energy portal data (energy.eu ), U.S. Energy Information Administration data, Booz & Company and INSEAD 2011 State of Europe Survey (1,860 respondents); Booz & Company analysis

% of respondents who agree that Europe should focus on the Middle East

40

R²=0.444

Avg. 78%

A majority of respondents favour increasing Europe’s presence in other parts of Asia


Source: UN Statistics, Booz & Company and INSEAD 2011 State of Europe Survey (1,803 respondents); Booz & Company analysis

All respondents%


- Other Asia

41

100%

RO

64%

27%

9%

HU

8%

46%

38%

8%

SE

10%

44%

39%

8%

PT

6%

38%

36%

20%

PL

19%

24%

52%

5%

FI

3%

38%

41%

17%

AT

8%

33%

50%

10%

DE

7%

32%

46%

15%

IT

2%

37%

44%

17%

NO

36%

57%

7%

BE

2%

33%

51%

13%

UK

8%

27%

51%

13%

FR

5%

29%

46%

20%

NL

3%

29%

51%

17%

BG

8%

23%

46%

23%

DK

7%

22%

56%

15%

GR

2%

26%

62%

11%

CH

0%

25%

59%

16%

ES

3%

21%

59%

17%

IE

24%

55%

21%

Avg

5%

31%

49%

15%


History influences commercial trade flows at the country level



42

9%

9%6%

58%

45%34%

41%

6%

52% 55%

PLSENL

41%

17% 16%

44%

CHDE

7%

40%

GR

100%

8%

35%

5%

39%

14%

48%52% 30%

RO

52%

10%3%

18%

AT FI

42%

15%

2%

48%

HU

15%

26%

34%

34%

49%

16%

49%

10%

UK

16%

IT NO

38%

17%

40%33%

BE

17%

7%

5%

47%

36%

3%

53%

12%

DK

39%

24%

FR

8%

46%

4% 9%

BGIE

39%

9%

13%

42%

21%

30%

49%

17%

25%

PT

3%

28%

17%

45%50%

28%

ES

6%

34%

42%

18%

Avg

Strongly agree DisagreeAgree Strongly disagree

All respondents%


- South America

Two-thirds of respondents believe that the EU should continue to pursue its current international aid policy (~0.6% of EU GDP)

The EU spends ~0.6% of its GDP in international aid while the US spends only ~0.2%.

- Should the EU pursue its current international aid policy?

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

ODA as % of gross national income (2009)

1.2%1.1%1.0%0.9%0.8%0.7%0.6%0.5%0.4%0.3%0.2%0.1%0.0%

IE

BEATSEESGR

DEIT NLFRCH

PT DKUK

FI NOBG

RO PL

HU

National official development assistance (ODA) vs. continue aid policy to increase influence %

1) The alternative response is 'No, given the financial instability in Europe.'


% of respondents who agree with ODA policy to increase influence 1)

43

Avg. 67%




EU enlargement

Trade policy


A corporate view

24%

30%41%

7%18%

28%

24%

100%

Countries from the Balkans

(Croatia, Albania, Bosnia)

22%

30%

Turkey Far Eastern European countries

(Belarus, Ukraine, Moldova)

15%

46%

16%

44

While most favour admitting the Balkans to the EU, many are hesitant with regards to Turkey and far E. European countries


Source: Booz & Company and INSEAD 2011 State of Europe Survey ('Far Eastern countries': 1,907 respondents; 'Balkan countries': 1,919 respondents; 'Turkey': 1,942 respondents); Booz & Company analysis

All respondents

Which countries should enter the EU by 2030?

Strongly disagreeStrongly agree Agree Disagree

37%46%

62%

Admission of the Balkan states is the favoured means of EU enlargement prior to 2030



All respondents%

Which countries should enter the EU by 2030? - Countries from the Balkans (Croatia, Albania, Bosnia, Serbia, Macedonia)

45

8%

25%

FR

17%

NL

100%

15%

14%

24%

46%

16%

PT

31%

22%

14%

62%

17%

BE

46%45%

9%

8%

ES IT

35%

50%

7%

39%

GR

11% 14% 16%

47%41%

7%

9%

21%22%

DE

13%

66%

27%

NO

28%

10%

34%

19%13%

BG CH

21%

62%

13%

DK

20%

45%46%

48%

27%

53%

29%

22%

24%

AT

22%

21%

44%

29%

5%

27%

45%

10%

50%

48%

22%

22%

14%

15%10%

21%

36%

FIPL RO

9%17%

UK

19% 15% 13%

41%

18%

41%

SE

50%

28%

6%

IE

12%

HU

20%

Avg

12%

Strongly agree Strongly disagreeAgree Disagree

Turkey is not seen as a desirable EU entry candidate in the medium term…



All respondents%

Which countries should enter the EU by 2030?- Turkey

46

35%

27%34%

CH

17%

PT

24%

7%

43%

24%

20%

BE

20%

FRHU

18%

35%

21%

19%

SE

23%

32%

27%

13%

16%

9%

27%

27%

22%

32%

GR

35%

18%

22%

25%

IE BG

54%

27%

NO

15%

28%

25%

35%

35%

23%

26%

25%

31%

23%

46%

IT

23%

16%

24%

38%

FI

31%

14%9%

16%

38%

16%

29%

UK

35%

21%

ES

30%

DKNL

35%

23%26%

7%

PL

37%

RO

29%

17%

10%

21%

8%

24%

17%27% 28%

34%

46%

29%19%

Avg

38%

DE

30%

AT

100%

27%24%

30%

28%

18%

26%

Disagree Strongly disagreeAgreeStrongly agree

… nor are the far Eastern European countries

Note: Numbers may not add to 100% due to rounding. Countries in bold are EU founding members: Italy, France, Belgium, the Netherlands and Germany


All respondents%

Which countries should enter the EU by 2030? - Far Eastern European countries (Belarus, Ukraine, Moldova)

47

23%

43%

NO

33%

DK

24%

53%

3%

29%

SE

16%

35%

23%

CH DE

31%28%

41%

5%

NL

29%

33%

23%

7%

47%

4%

FR

3%

55%

14%

21%

38%

BE

100%8%

28%

42%

BG

22%

37%

13%

39%

7%

46%

15%

GR

10%

39%

5%

12%10%

3%

35%

ES

49%

23%

9%6%

31%

ITUK

8%

HU

46%

30%

38%

46%

IE

15%15%

22%

17%

15%12% 15%

34%

32%

32%

31%

AT

10%

23%40%

43%

32%

Avg

36% 39%

PL

35%

22%

32%

35%

FI

41%

36%

48%

30%

21%

7%

ROPT

Strongly agree Strongly disagreeDisagreeAgree




EU enlargement

Trade policy


A corporate view

12%23%

41%

39%

8%

3%

4%

10%

49%

48%

2%

28%

14%

Adopt protectionist

measures

Respond strongly to

protectionist threats

38%

Implement a social tariff

100%

Foster free trade

47%

37%

36%

Favour intra-EU trade

42%

17%4%

48

European business leaders overwhelmingly favour free trade over protectionism – with a certain dichotomy in the responses


Source: Booz & Company and INSEAD 2011 State of Europe Survey (1,899 respondents on free trade policy; 1,898 respondents on protectionist threats; 1,895 on intra-EU trade; 1,896 on 'social tariff' and 1,891 on protectionist measures); Booz & Company analysis

All respondents

%

In your opinion, what should be the trade policy of the EU?

Strongly disagreeAgreeStrongly agree Disagree

90% 84%74%

42%

13%

Free trade is clearly the trade policy espoused by business leaders


Source: The Economist, 'Capitalism's waning popularity', April 7th 2011, Booz & Company and INSEAD 2011 State of Europe Survey (1,899 respondents); Booz & Company analysis

All respondents%

In your opinion, what should be the trade policy of the EU? - Foster free trade

49

3%1%3%1%

9%

NO PT

53%44%

2%

GR

56%

30%

ROPL ESUK NL

41%

5%

35%

68%

DE

47%

18%

59%

DK

41%

6%2%

36%

FR

3%

29%

FI

4%

42%

3%6%

71%

45%

38%

2%

HU

52% 48%

CH

25%

43% 41%

6%

27%

38%

BEBG

100%

41%

AT

12%

53%35%

73%

53%

45%

13%

61%

47%

55%

Avg IESE

15%

47%

17%

38%43%

IT

7%

46%

23%

56%46%

2%

48%

2%8%

42%

48%39%


50

There is a consensus that the EU should strongly respond to protectionist threats

Lowest % of interviewees who agree

or strongly agree

Across country 74%

Across industry 80%

Across sector 80%

Across age 69%

Across gender 74%

Across level of seniority 79%

In your opinion, what should be the trade policy of the EU? - Respond strongly to protectionist threats (by complaints to WTO, or counter measures)

% of respondents

Strongly agree

Agree

84%

47%

37%


Respondents from countries with negative trade balances tend to seek to favour intra-EU trade, a more protectionist stance

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Net trade in goods and services as % of GDP

15%7%6%5%43%21%0-1%-2-3%-4-5%-6-7%-8

NODK

SE

DEFIUK NLPLIE

HUPTAT

GR IT BEES

FR

Net trade in goods and services vs. Favour intra-EU trade %


% of respondents who agree that intra-EU trade should be favoured

51

In your opinion, what should be the trade policy of the EU? - Favour intra-EU trade

Avg. 74%

R²=0.444

Social tariffs as an EU trade policy divides the opinion

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Social security paid by employer as a % of total labour costs

31%30%29%28%27%26%25%24%23%22%21%20%19%18%17%16%15%14%13%12%0%

PLSE

DK CH DEUKHU

NLFIAT

BG BE

ES

ROPT FR

Support for a social tariff vs. Social security contributions paid by employers %

Note: Data for social security paid by employer in Italy not available; 43% of Italian respondents replied favourable (‘agree’ or ‘strongly agree’)


% of respondents who support a 'social tariff'

52

In your opinion, what should be the trade policy of the EU?- Implement a social tariff to reduce imports from countries with lower social protection

Avg. 42%

R²=0.216

The overwhelming majority of respondents is against protectionism


Source: Time, 'Protectionism on the Rise in Europe?', 4 Feb. 2009, Booz & Company and INSEAD 2011 State of Europe Survey (1,891 respondents); Booz & Company analysis

All respondents%

In your opinion, what should be the trade policy of the EU? – Adopt protectionist measures

53

9%

40%

IE

3% 3%

46%

65%

7%

31%

53%

8%

54%

54%

46%

ES

16%

BG

13%

41%

7%

51%

49%

1%

46%

5%

RO

29%

5%

NL

33%

33%

47%

3%

DK

21%40%

42%

31%

GR

46%

AT

10%13%

PT

66%59%

28%

3%

38%

2%6%

37%

37%

3%5%

25%

3% 1%

IT

38%

10%

NOHU

47%

13%

CH

38%

FISE

16%

FR

100%

64%

31%

UK

26%

8%

PL

43%

Avg

33%

23%

37%50%

56%

BE

33%

DE

49%

39%

10%3%

71%

Strongly disagreeStrongly agree Agree Disagree

Study contact information


A corporate view

Per-Ola KarlssonSenior Vice PresidentBooz &Company+46 8 [email protected]

Melissa JacobSenior AssociateBooz & Company+33 1 [email protected]

Ludo Van der HeydenThe Mubadala Chaired Professor in

Corporate Governance and StrategyINSEAD+33 1 [email protected]

Bruno LanvinDirector of e-LABINSEAD+33 1 [email protected]

Robert GogelEuropean Executive Council+33 1 [email protected]

complete study-presentation revitalising-the-european-dream.-a-corporate-view

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