Private businesses across Europe see regulation and bureaucracy in their domestic economies as more of a threat to the development of their companies than regulation and bureaucracy coming from the European Union (EU). In a PwC survey of 2,450 companies across 31 European countries including Cyprus, 39% said domestic red tape was a concern, compared with about 29% citing EU red tape as a bigger problem.
Mark Smith, EMEA clients and markets leader at PwC, said:
“The most striking finding from our survey is that while it is often perceived that regulatory and bureaucratic intervention by EU authorities is stifling business initiative and ensnaring companies in red tape, most private businesses don’t feel that way. We see this as a wake-up call for many national governments. They need to do much more to gain the confidence of private businesses in their jurisdictions, starting with tackling red tape and also the cost of regulatory compliance.”
The PwC survey also shines a private business spotlight on a wider, ongoing issue across the EU. Specifically, European private businesses see their biggest challenge as a skills shortage that is preventing them from hiring the right talent for growth. PwC estimates that the skills shortage is costing the region’s private businesses €324 billion annually in lost revenues. That’s approximately equivalent to the combined annual GDP of Portugal, Hungary and Croatia.
Nonetheless, private businesses are more optimistic than they have been for some time. They are optimistic about growth prospects in Europe, where in spite of recent signs of weakness, the region has enjoyed a roughly two year period of respectable, positive growth. It is worth noting that private businesses in Cyprus are particularly optimistic with a percentage of 78.6% being positive regarding growth prospects for the year ahead.
In addition, private businesses across Europe are also confident they can grow their companies in their domestic markets by focusing on their customers and embracing digital technologies. Mid-sized companies (defined as those with annual revenues of €50 million to €100 million) are the most positive of those PwC surveyed.
That said, digitalisation was mentioned as a priority by only 31% of private businesses in Europe. This implies that many private businesses still underestimate what a digital future means for their companies and underestimate its potential, as well as the disruptive forces it is unleashing.
Read the full findings at www.pwc.com/private-business-survey
Director - Marketing & Communications, PwC Cyprus