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Welcome to our new issue for June. At StartEuropa we want to make you want to know more about Europe in order to make you want to get started. This month we naturally bounce back on the study of the attractiveness of Europe made by EY (formerly Ernst&Young) which was just published at the end of May 2020
Welcome to our new issue for June. At StartEuropa we want to make you want to know more about Europe in order to make you want to get started. This month we naturally bounce back on the study of the attractiveness of Europe made by EY (formerly Ernst&Young) which was just published at the end of May 2020
EY provides advisory, assurance, tax and transaction services and is one of the Big Four, the four largest accounting and professional services networks in the world. For almost 20 years, EY has listed and analyzed investment projects in European countries. They focus on the Foreign direct investment (FDI). An investment in a company is normally included in FDI data if the foreign investor acquires more than 10% of the company’s equity and takes a role in its management. FDI includes equity capital, reinvested earnings and intracompany loans. Portfolio investments and mergers and acquisitions (M&A) are excluded. According to EY, FDI shows the reality of investment in services and manufacturing by foreign companies across the continent.
EY provides advisory, assurance, tax and transaction services and is one of the Big Four, the four largest accounting and professional services networks in the world. For almost 20 years, EY has listed and analyzed investment projects in European countries. They focus on the Foreign direct investment (FDI). An investment in a company is normally included in FDI data if the foreign investor acquires more than 10% of the company’s equity and takes a role in its management. FDI includes equity capital, reinvested earnings and intracompany loans. Portfolio investments and mergers and acquisitions (M&A) are excluded. According to EY, FDI shows the reality of investment in services and manufacturing by foreign companies across the continent.
In 2019, EY listed around 6400 projects in 47 countries, for a global amount of more than $7 billion in investment. They are spread in 15 sectors. Digital is the most important one with around 1200 projects. The top 3 countries, which are the 3 main economies in the region, catch 50% of the projects.
In 2019, EY listed around 6400 projects in 47 countries, for a global amount of more than $7 billion in investment. They are spread in 15 sectors. Digital is the most important one with around 1200 projects. The top 3 countries, which are the 3 main economies in the region, catch 50% of the projects.
France reaches 18.8% market share (+17% YoY) and overtakes the UK as Europe’s top FDI destination, for the first time. France’s resurgence, which has gathered pace since 2015, is a direct result of reforms of labor laws and corporate taxation, which were very well received by domestic and international investors alike. Recognized assets of France are diversity of sectors, innovation and infrastructure.
France reaches 18.8% market share (+17% YoY) and overtakes the UK as Europe’s top FDI destination, for the first time. France’s resurgence, which has gathered pace since 2015, is a direct result of reforms of labor laws and corporate taxation, which were very well received by domestic and international investors alike. Recognized assets of France are diversity of sectors, innovation and infrastructure.
UK is number 2 with 17,4 % of market share in 2019 (+5%). The Kingdom lost its pole position it detained over the past two decades. Germany is 3rd with 15,1% of market share, flat in term of number of projects. Germany’s stability reflects the structural difficulty for new entrants to hire staff in crowded labor pools, and the fact that supply chains are already very well organized and integrated. Spain is 4th with 7,6% of market share, with a +55% surge. Its neighbor in Iberian Peninsula, Portugal, is another strong performing country 2,4% of market share (+114%).
UK is number 2 with 17,4 % of market share in 2019 (+5%). The Kingdom lost its pole position it detained over the past two decades. Germany is 3rd with 15,1% of market share, flat in term of number of projects. Germany’s stability reflects the structural difficulty for new entrants to hire staff in crowded labor pools, and the fact that supply chains are already very well organized and integrated. Spain is 4th with 7,6% of market share, with a +55% surge. Its neighbor in Iberian Peninsula, Portugal, is another strong performing country 2,4% of market share (+114%).
Impact of the COVID-19
Impact of the COVID-19
EY gives also insights thanks to qualitative survey done up to April 2020. Among the projects announced in 2019: 65% are already in place or moving as planned; 10% canceled, the rest downsized. EY believes that COVID-19 will accelerate three pre-existing trends: technology adoption, sustainable practices and supply chain reorganization. The acceleration of technology for customer access and cost reduction anticipate a renewed focus on sustainability and climate change in the next three years. Digital economy and Clean Tech are the business sectors that will drive Europe’s growth in the coming years. 82% of respondents consider that the trend to accelerate most is the “Adoption of technology that automates manual human processes”.
EY gives also insights thanks to qualitative survey done up to April 2020. Among the projects announced in 2019: 65% are already in place or moving as planned; 10% canceled, the rest downsized. EY believes that COVID-19 will accelerate three pre-existing trends: technology adoption, sustainable practices and supply chain reorganization. The acceleration of technology for customer access and cost reduction anticipate a renewed focus on sustainability and climate change in the next three years. Digital economy and Clean Tech are the business sectors that will drive Europe’s growth in the coming years. 82% of respondents consider that the trend to accelerate most is the “Adoption of technology that automates manual human processes”.
StartEuropa ‘s Point of View
StartEuropa ‘s Point of View
Attractiveness of Europe is also linked to the economic situation in the region. If we obviously think COVID-19 will have a negative impact on the economy, it is too early to measure the amplitude on European economies. The health crisis is quite almost behind us. The economic emergency is already reaching new heights. The main countries have embarked already on massive stimulus support plans for their economies. It is interesting to see that at the European Union level the ECB (which is the equivalent of the FED for Euro Zone) and the European Commission reacted very quickly and strongly to have a monetary policy and budgetary policy very accommodative. What is very innovative is the European Commission's plan to set up a very important budget to help European businesses by raising debt by itself on the bond market. It is innovative as the European Commission is until now only financed by the State members.
Attractiveness of Europe is also linked to the economic situation in the region. If we obviously think COVID-19 will have a negative impact on the economy, it is too early to measure the amplitude on European economies. The health crisis is quite almost behind us. The economic emergency is already reaching new heights. The main countries have embarked already on massive stimulus support plans for their economies. It is interesting to see that at the European Union level the ECB (which is the equivalent of the FED for Euro Zone) and the European Commission reacted very quickly and strongly to have a monetary policy and budgetary policy very accommodative. What is very innovative is the European Commission's plan to set up a very important budget to help European businesses by raising debt by itself on the bond market. It is innovative as the European Commission is until now only financed by the State members.
On a purely microeconomic level, many of you tell us about your caution. It was our recommendation in our April, 8 Newsletter, when we were talking about resilience. Financial resilience is part of it. We believe that attractiveness of European market is still there for you and it is more than ever relevant nevertheless to position yourself in Europe. A smart approach would be to do it through a partnership based mainly on success sharing. It is our mission at StartEuropa and we are at your disposal to help you kick off in Europe.
On a purely microeconomic level, many of you tell us about your caution. It was our recommendation in our April, 8 Newsletter, when we were talking about resilience. Financial resilience is part of it. We believe that attractiveness of European market is still there for you and it is more than ever relevant nevertheless to position yourself in Europe. A smart approach would be to do it through a partnership based mainly on success sharing. It is our mission at StartEuropa and we are at your disposal to help you kick off in Europe.
Have a good day !
Have a good day !
Best regards
Best regards
Daniel Giovanelli
Daniel Giovanelli
CEO and Co-Founder StartEuropa
CEO and Co-Founder StartEuropa
We open the doors for you in Europe!
We open the doors for you in Europe!
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