Understanding Business in Europe
Written by: Terrence R. Guay
Since publication of The Business Environment of Europe last summer, I made three trips to Europe and spent almost three months working in and travelling around the region. While the reasons for travel were professional and personal, this length of time allowed me to assess the perspectives presented in the book. Authors writing about a constantly-moving subject like the contemporary business environment of a country or region view their book’s release with some trepidation, wondering if current events have passed the book’s data and arguments by, thereby making the publication less fresh, relevant, and (perhaps most worrisome) marketable. While it may appear rather self-interested to write a blog post that essentially reviews one’s own book, I do so with more a sense of intellectual curiosity than self-promotion, as I think the points below will illustrate.
A first impression from my time in Europe is that, despite political, economic, and social challenges, life goes on. Executives from companies I visited admit that economic sluggishness in Europe has been problematic, but exhibit a seriousness of purpose in developing new strategies that will guide their firms to success.
A second impression is that the international environment is, if anything, having a greater impact on European business than suggested in the book. One of the most astonishing changes from previous trips to Europe is the numerous Asian, mainly Chinese, tourists crowding the streets of Florence, London, Seville, and other cities. This reflects the increasing wealth of emerging markets, and provides a more diverse pool of tourist revenues for hotels, restaurants, producers of crafts, and other sectors affiliated with tourism, in addition to attractive markets for traditional exports. It also is clear that, while US-EU sanctions against Russia may have the support of political elites, European companies, especially those producing luxury goods like Italian jewelry, are much less enthusiastic about using economic levers to achieve political change given the loss of exports to Russia.
At the national level, the labor market continues to be a problem in almost every country, especially for young workers. Many talented 20-somethings I talked to were either over-qualified for their current positions or envious of friends who have moved, often to northern Europe, to seek employment elsewhere. Few were optimistic that deregulating and depoliticizing their country’s labor markets would happen any time soon.
As for the European Union (EU), views were widespread, ranging from relatively enthusiastic support for the organization’s on-going single market initiatives to worry over the ability of the EU to get a handle on the region’s economic and competitiveness challenges to downright hostility to its response to Greece’s financial crisis.
As a scholar who views European integration as a successful, albeit messy, experiment in peace-building, I am surprised less by the diverse reactions of many European citizens than by the continual drumbeat of doomsday predictions in the media of a “Grexit,” end of the Euro, and possible breakup of the EU itself. Such forecasts reflect a lack of understanding of the fundamental relationships that define European integration. My travels over the past year have led me to believe that, while The Business Environment of Europe does not have all the answers to the challenges Europe faces today, commentators on current events in Europe would benefit immensely from a deeper understanding of the political and social context of Europe that is intertwined with the dramatic economic and business stories that make the headlines.