In Case You Missed It: New term for Europe’s businesses and politicians. Will they get an A* for fixing productivity and growth issues?

Welcome to ICYMI – a weekly snapshot of European news stories that have given me pause for thought. ICYMI is a chance for you to go beyond the front-page headlines and find out what other stories may be worthy of your attention.  

With much of Europe basking in temperatures in the mid 20s it might not feel like summer is completely done and dusted. However, for businesses, politicians and indeed students and school children, the days of lounging around in the sun are over for this year. 

In the business world the start of September always brings with it a new whirl of activity and this year is no different. In the b2b tech sphere, stand by for a slew of announcements from a range of companies as they set out their plans for Q3/4 and beyond. 

New term for Europe’s politicians 

It is also back to business for the continent’s politicians. In the UK parliament has returned from recess and Keir Starmer’s Labour government has to deliver on the series of promises that won them a huge majority in the election back in June. The tone so far has been one of doom and gloom with Labour insisting it will have to make tough decisions (i.e. tax rises and spending cuts) to address the issues it says were caused by the previous government’s mishandling of the economy. Expect to hear about worker’s rights and public sector pay rises to lighten the mood a little. 

Over in France President Macron is still dealing with the fallout from the summer elections which saw a reshaped French administration with a slightly left-wing flavour begin to emerge. The pressing need to appoint a PM is still top of his agenda, and businesses are starting to become inpatient with the political infighting which is preventing the creation of a stable government. 

Much of Europe will be looking nervously over at Germany where the far-right populist party ADF, made striking progress in the elections in Thuringia and Saxony in the east of the country. How this might impact on next year’s federal elections remains to be seen, but some commentators have pointed to a growing rift between the ideals and aspirations of what once was East and West Germany. 

The inflation/investment quandary 

Politicians across the continent are still dealing with a wave of problems, many of which are linked to issues of low productivity and lack of investment. 

In The Netherlands PwC recently launched a « heatmap » to monitor the Dutch business climate, highlighting that since 2018, there has been a notable decline. The heatmap tracks 60 indicators such as labour market conditions, infrastructure, policy predictability, and innovation investments. It shows how The Netherlands has fallen behind countries like Denmark and Switzerland in maintaining a competitive business environment. Key areas of concern include the unpredictability of government policies and insufficient investment in innovation.  

For b2b tech companies, understanding the trends in the Dutch business environment is crucial. The decline in policy predictability and innovation investments might affect market dynamics, investment opportunities, and operational strategies.  

In France La Tribune reports that there has been a dramatic rise in startup bankruptcies, signalling potential challenges in the sector. Factors contributing to this trend include economic instability and difficulties in securing new investments, raising concerns about the resilience of the French startup ecosystem. 

It is not all bad news though. Eurozone inflation hit a three year low falling to 2.2% in August 2024. This might be the catalyst for cuts in interest rates which in theory would lead to much needed investment for Europe’s tech sector. Those cuts might not be imminent. “Policy should proceed gradually and cautiously since the current level of headline inflation understates the challenges monetary policy is still facing,” said Isabel Schnabel, a member of the ECB’s Executive Board, during a speech in Estonia on Friday.  

In the UK one way that the new government is looking at as a way of upping productivity is by encouraging companies to offer its employees the option to shoehorn their working weeks into four days per week rather than the traditional five. There’s evidence to suggest that this type of flexible working increases staff retention, improves morale and leads to a more efficient workforce. 

An extra day of leisure? 

Yet what will we all do with our extra day of leisure? Online shopping of course. According to a survey by GlobalData, four out of ten Millennial and Gen Z consumers make at least one monthly purchase on social platforms such as TikTok, Instagram and Facebook. But does this make them happy consumers? Apparently not. Alarmingly, 74% of participants admitted to buying products they did not need and 22% of those surveyed considered their purchases to be pointless, while 18% reported that they had been ripped off.  

Or maybe we can go and see our favourite band. Well, as long as it is not Oasis. The much-anticipated reunion of the Gallagher Brothers set for summer next year sparked a wave of nostalgia across UK radio stations as well as a surge in streams in Spotify.  

However, acquiring tickets for the upcoming gigs proved to be a nightmare for their fans, with accusations that Ticketmaster’s servers were not able to cope with the demand and that even when punters got close to purchase connections dropped and they were sent to the back of the queue. 

Even if they did manage to get a ticket in a basket, virtual dynamic pricing ensured that many ended up paying double what they expected to. Some Might Say this is a bit of a rip-off. Although I am sure that once they finally get to those mega gigs, the majority of Oasis fans Don’t Look Back in Anger…