European markets as engines of growth? (Prof. Boris Durisin)
Doing Business in Europe
Welcome to the MOOC “Doing Business in Europe”! Europe is a major world trade partner as well as a place where to acquire significant business experience. This is the reason why this MOOC has been designed with the view to explaining and guiding you in doing business in Europe. Do you really know Europe? How should you consider and approach the European continent? What business lessons can be drawn in a European perspective? With a dozen contributions from academics in the various domains of management (marketing, supply chain, finance, human resources management or strategy) and as many testimonials from business leaders operating in Europe, this course will help you enrich your knowledge and business competences within the European context. The MOOC is divided into 5 topics corresponding to 5 major issues when doing business in Europe: 1. Approaching the European market(s) 2. Innovating in Europe 3. Investing in Europe 4. Building the value chain 5. Integrating the diversity There are no prerequisite for this course. At the end of the coursework, participants will be able to understand how to design a European-scale development strategy. Please enroll and thank you in advance for choosing this course!
Unit 1: Approaching the European market(s)
The European market(s) are multiple yet increasingly integrated. That’s the reason why this first unit is dedicated to the topic “Approaching the European market (s)”. You will understand why Europe is the most important economic market in the world with an access to 600 millions of consumers and an accelerating growth. You will have an input on the Eurozone, which allows a fluent payments and transfers system with no currency costs and minimal administrative formalities. And you will get insights on the quality of business and life in Europe: Efficient transports, business friendly metropolis and beautiful cities…
European markets as engines of growth? (Prof. Boris Durisin)9:02
Prof. Dr. Florence Pinot de Villechenon
Prof. Dr. Béatrice Collin
Strategy, Organizational Behavior and Human Resources
Eyeglasses, printed press, the cinematograph,
the world wide web, Skype. These are just
some of the inventions made in Europe that transformed the way we live our lives.
But is it Europe and is it the Europeans who benefited, benefit and will benefit the most
from the work of the great inventors?
Bonjour, my name is Boris Durisin and I am currently a Professor at ESCP Europe
This module is dedicated to what it takes to innovate and grow a company.
There are three levels of analysis to understand.
First, Institutions of Finance, Management, and Corporate Governance. Next the choice of industry and
firm conduct, and also individual drive.
Europe has done a lot and the European countries can do much more to unravel the forces of
creative destruction and business creation in Europe.
You cannot understand the performance of companies unless you understand the role of Institutions
of Finance, Management, and Corporate Governance.
Just an example in case. In 2016, California companies received $28bn or more than more
than 50% of US venture funds. The share of capital allocated to California was 46% a decade ago and 45% in 1997.
Compare this to the €3.2bn raised in the U.K. and €2.7bn raised in France.
Those top 2 countries of Europe combined raise about a fifth of what a single State in the US does.
Israel with a population smaller than Paris and London raised $6bn, more than France and U.K. combined.
Or compare it to $1bn in R&D in addition to $500m in software development invested by
GE Health Care, which is only one of the different units of a single US-based multinational corporations
"United in diversity", the moto of the European Union, is certainly a principle to be embraced.
And it is also correct to state that startuppers, entrepreneurs and patrons see the growth prospects
of their firms constrained if Europe does not pursue more unified regulations and put
in place the appropriate mechanisms.
Competing, growing your company in the US is different from competing Europe.
East coast and West coast. Europe is different.
Economic growth hinges on an efficient financial sector and trade.
Without effective financial institutions, productive projects may remain under- and unexploited.
"Yes” to investments in Production and Research. “Yes” to enhancing demand
in competitive rivalry, and “Yes” to diversity: Fintech firms cluster in London.
Gamers and music-sharing sites in the Nordic countries.
New companies with expertise in the “internet of things” in Berlin.
Milan, with it strong medical universities, and its biotech scene.
“Deep tech” companies in Paris.
Thus, “Yes” to diversity … and also “Yes” to more aligned and
unified regulations and Institutions of Finance, Management, and Corporate Governance in Europe.
The next level of analysis is the individual.
Bill Gates of Microsoft, Steve Jobs of Apple, Andy Grove of Intel, and the current generation of
Mark Zuckerberg of Facebook,
Larry Page and Sergey Brin of Google, Jeff Bezos of Amazon.
You cannot understand their success without considering their thirst for recognition and their drive.
We know them, we celebrate them.
How many non-French know Frédéric Mazzella of BlablaCar?
To how many non-Swedish does it ring a bell when they hear Daniel Ek – the name of the founder of Spotify?
We need a cultural shift in Europe embracing the success of individual entrepreneurs.
Success, individual success, also requires open mindedness and ability to work with others.
Here, our universities and business schools can contribute a lot, if they design their
offer and their courses accordingly.
Institutions of Education can and should be part of inculcating those qualities and enable
the promise to individuals to move up the social ladder.
According to Israel’s Minister of Education, you need to acquire at age of childhood competences
in debating, benefit from a peer-teaches-peer approach, and learn to
take on actual responsibilities at a young age.
Now, let's move to companies.
Productive assets are deployed by companies. It’s the management of companies that makes the difference.
Now, why is it that some companies are more successful at innovating than others?
Why is it that some companies are good at incremental innovation, but fail
at breakthrough innovation?
What drives new product success?
We still have to dig deeper and do lots of research, but we already know some facts.
Some companies are better at innovating than others even though they invest less, much less in R&D.
Why ? Because they exhibit a higher level of absorptive capacity.
Facebook, Google, Airbnb, Blablacar, Spotify, Starbucks, Red Bull. They never had
resources of the larger multinational corporations, they never had resources of an incumbent.
Yet, they had the ability to see a future where nobody saw it, to envision consumption
where nobody saw demand, to recognize the value of new knowledge, acquire, assimilate
or transform and to exploit it.
Absorptive capacity, also ambidextrous organizing.
Some companies are at good a driving home innovation in their businesses, but fail at breakthrough innovations.
This not established companies, but start-ups that out of nothing build an empire in search,
social networking, car sharing, and so on. Why?
The established players fail at implementing the mind-set, decision-making processes and
operating routines to both exploit the current value trajectory and open up new value trajectories.
Companies fail because they are not good at ambidextrous organizing, and we can teach about it.
In addition, approximately half of the companies that pioneer new product categories later
pull out of these business.
New products fail at the rate of 40% to 90%, depending on the category.
It has not changed a lot in last 25 years.
The numbers are not encouraging, but you need to have ability to introduce
new offerings to drive revenue growth.
The good news is that we have studied the factors of new product success.
We understand the role of a product concept, we know how to go about market sizing.
Even through break innovation.
In fact, Business Schools can teach you how to go about marketing, strategizing, organizing
and financing for innovation.
Just to be clear: If as European we take the right decisions to induce individual drive,
open-mindedness, and ability to work with others, if we design the required Institutions
of Finance, Management, and Corporate Governance, then I can tell you this: you can learn how to
innovate and grow your firm in Europe.
Welcome to make European markets an engine of growth.