June 17, 2013
The European internal market is bound to shrink in global relevance whatever economic policy Europe will pursue.
Every ambitious European company beyond a certain size that wants to avoid shrinking sales/profits and remain globally competitive has little choice but to operate globally.
Global integration will have to go far beyond conventional exports/imports and outsourcing of labour intensive activities. In future, business will have to develop in-depth presence in major Asian and American markets, including full-scale manufacturing, service and research operations. Such presence should normally go along with local mergers/partnerships, including key management positions in the hands of senior local staff. Such mingling of staff should lead to added value resulting from the interaction of different business cultures, that will set in motion an intercontinental learning process.
Major US companies like GE or GM have embarked on deep global presence decades ago, starting in Europe. Japanese, Chinese and Korean business are in the very beginning of the process, while Europe can boast of a rising number of global companies with an increasingly more intense presence in USA and, more recently, China.
German, Swiss and British companies have a lead, while Spanish, Italian and even French companies lag far behind. The latter will first of all have to learn how to operate as full-fledged European companies in the EU internal market.
This is not sound for the long-term future. We need a much broader global deployment of European investments, especially in North America and China. The planned EU-US partnership agreement should help giving a powerful impetus to much more European business presence in North America.
“Business Europe” should spread the gospel, explain the rationale for a much more intensive business presence in other countries and continents and demonstrate that such presence will make European business more competitive without a loss of jobs in Europe.
Eberhard Rhein, BrusselsAuthor : Eberhard Rhein