Technological innovation is transforming how businesses plan and invest. Evidence shows that European businesses fare well on investing in technology compared to peers around the world. With competition intense, firms must balance thorough due diligence with staying ahead of the curve in order to invest successfully. This infographic highlights the technology investment in the European Union.
We know that technology will change the way we live and work forever. But our familiarity with that knowledge does not dampen its power. According to Luis Pastor, Global Head of Blockchain at Grant Thornton Spain, “Technology is a source of growth. It opens up business opportunities. It can facilitate better relationships with customers, improve supply chain and production, and act as an enabler of market disruption.”
European businesses recognise that investment in technology and investment in future growth are synonymous. But they are not the only ones.
The world’s two largest economies are going head-to-head in the competition for tech supremacy. For every Apple and Google based in the US, a Tencent or Weibo emerges from China. According to recent news articles the former chair of Google’s parent company, Alphabet, thinks China could overtake America when it comes to AI by 2025.[i]
Against this backdrop, data from the Grant Thornton International Business Report suggests that European businesses are keeping pace in the technology stakes. Net 42% of EU firms plan to increase investment in technology over the next 12 months in Q1 2018. This is up from net 38% in the previous quarter. The figure is identical to businesses in Asia Pacific, and ahead of counterparts in Latin America (37%).
These are encouraging signs. Yes, the proportion of firms in North America planning to boost investment in technology is some way higher at net 62%. But country comparisons reveal a more even contest. Ireland (net 66%) outstrips the US (net 63%), for example. And the UK (net 50%) currently pips China (net 49%) for investment intentions.
The types of technology available, and their applications, are vast. But one of the fastest growing areas of opportunity for businesses lies in Blockchain. Wayne Pisani, head of financial services at Grant Thornton Malta, explains that Blockchain’s power can be most effective when firms are “using multiple processes that you want to simplify.”
We see Blockchain being used to make significant efficiency improvements to invoicing processes. Or, to bring together multiple supply chain parties’ data in a digital platform that offers a way to track and verify activity.
Elsewhere, technology helps tax functions operate more smoothly. As Andrew Burman, Partner at Grant Thornton says, “tax authorities expect a greater amount of information in more detail, with less time and in some cases, even real-time. Investment in automation and AI may be the only feasible way to respond with the speed and accuracy required.”
If tax functions become more automated, it can free up individuals previously in those roles to play a more central role in advising on and influencing business strategy.
From Blockchain to AI to the cloud to smartphones, technology is disrupting how we do businesses. But the same rules of business investment still apply. It is important to spend time understanding how individual areas of technology work, what their applications are, and the benefits it could create for your firm.
As with other investments outside the realm of technology, have specific objectives and growth targets in mind.
Additionally, new European regulation is an important consideration. General Data Protection Regulation (GDPR), the European Union’s new data law, comes into effect this May. Businesses must ensure customer data privacy complies with the new rules.
This regulation will affect social media platforms, cloud computing, geolocation services and other technologies your business may use. It will also affect companies that use technology platforms, such as Amazon, to sell and distribute their products and services. Customers of these companies will expect assurances on data security.
Our research shows that businesses around the world, not just in Europe, see the importance of investing in new technologies. European firms, therefore, must strike a fine balance. Avoid a gold rush mentality and invest without proper planning. But don’t fall back from the pack and lose out to competitors.