In late 05/early 06 Firstline Europe commissioned a pan-European survey of top level directors with a view to uncovering their views about the issues and trends that will impact over the next two to three years. The following are key findings based on in depth interviews with 54 business leaders:

Considerable uncertainty about the economic climate is a hallmark of the majority of respondents:

- International competition for Europe, saturated markets, political instability and regulatory intervention in business affairs are seen as threats rather than business opportunities.

- The danger emanates from the traditional competitor – the USA – but also from new players such as China and India… all of whom are characterised by high work ethics/low labour cost economies.

Among respondents the sectors most negatively affected were, in descending order, the pharmaceutical/healthcare industries and the food and drink manufacturers.

- Governments trying to lower healthcare costs coupled with growing public mistrust of the industry were the key drivers in the healthcare arena.

- The trend toward tax and advertising regulations drive the agenda in the food and especially the drinks industry; though the latter is also pleased to report that alcohol consumption outside Western Europe (beer in Eastern Europe and Asia) accounts for good growth in sales.

Regulation is seen as a double edged sword:

- On the one hand it tends to organise the marketplace and preserve the power of the companies that are established; but

- On the other hand it tends to choke risk taking and innovation…without creating the transparency and the corporate dialogue that most consumers and commentators demand nowadays.

Innovation is the new white knight that will catapult all industries and businesses forward:

- Innovation is defined very broadly in regards to products and services, but also in the way companies drive their research and development, how they market these products to an ever sceptical consumer, together with how they communicate with their multiple stakeholders.

- At the same time most respondents bemoaned the dearth of innovation

“There is no such thing as saturated markets, only tired marketing people”

Transparency in managing relationships with the marketplace, with employees and owners, with governments, society and the media, is the major aspect of innovation that needs to be embedded in most businesses:

“If I can make it transparent then I can communicate better and more positively outwards and achieve a completely new form of motivation”

“transparency will be a key platform in the trust restoration campaign”

Not surprisingly, transparency is also closely linked to corporate reputation and corporate social responsibility… but with a twist:

- Corporate social responsibility will lose its separate identity from reputation management as it becomes part of daily integrated corporate life. It will move from “green wash” or “legitimising spin” to become a valuable differentiator… a major hedge against the incursion of cheaper goods and services from competing regions.

The precursor to transparency, innovation and the restoration of trust is a new corporate practice of business and communications ethics, a new system of corporate governance and a renewed corporate emphasis on stakeholder dialogue and management:

“There will be more and more stakeholders that we need to take in consideration in relation to a problem; we need to be more progressive, and that is definitely something we need to become better at in the future”

“We need to be better at knowing what we mean and at listening…”

“We need to spend resources on being more progressive in the debate or dialogue…”