As the global economy slowly slips into a recession, businesses everywhere are beginning to reexamine their coping strategies. And for most of them, finding new ways to improve efficiency is now a major priority. Unsurprisingly, the methods many are turning to revolve around making strategic investments in new technology. And already, it’s possible to see the broad outlines of some trends emerging. Here are the three biggest technology investment areas for businesses confronting the looming recession.
Employee Productivity Technology
As the labor markets have started to tighten, businesses first looked to wring additional productivity out of existing staff to reduce their hiring needs. And the available data bears this out. Within the European Union, per-worker productivity growth is now hovering at near-historic levels — reaching 3.05% YoY in December of 2021.
The reason that it’s happening is the fact that European businesses have begun investing heavily in workforce productivity technology. Big multinational firms led the way, notching huge increases in the percentage of workers using digital collaboration, sharing, and messaging tools.
And European businesses also invested in the technology required to support a hybrid workforce, with an astounding 89% of them embracing the trend. That has meant big investments in remote working infrastructure, including videoconferencing, employee tracker software, and virtual office technologies.
Big Data and Analytics Tools
Another area where European businesses have been spending heavily is in big data and analytics tools. According to an industry survey, spending in that technology area reached $50 billion in 2021, with further increases projected this year. It’s happening because businesses in the region are trying to stand up the infrastructure necessary to feed their nascent automation initiatives.
In particular, European businesses are investing in products like digital advertising and social media analytics. And they’re also working to break down the barriers created by data silos to facilitate easier data sharing within their varied organizational groups. For instance, the ability to export Instagram analytics data makes it possible for financial controllers to embed it within their reports to justify spending to C-suite decision-makers better.
Robotic Process Automation
Robotic process automation is the last major technology area that’s seeing plenty of investment in Europe. European businesses are now developing automation initiatives to pair with their growing data and analytics operations. And the scale of these programs is massive.
According to research by Forrester, today’s automation initiatives will replace 12 million jobs within Europe by 2040. And much of that figure accounts for job roles that perform simple, repetitive tasks. But that’s not the only part of the workforce that will be impacted.
There’s also a new automation wave washing over the manufacturing sector, where some facilities are already moving towards full automation. The result will be decreased labor spending across various sectors, helping businesses offset the losses they’re projecting from the coming recession.
The Bottom Line
The current economic situation is speeding up technology investments across a wide swath of European industries. And that means we’re beginning to see a major shift in the labor landscape, the long-term effects of which are still unclear. However, European businesses are counting on their technology investments to see them through a downturn that appears more certain by the day.
Their biggest moves are to decrease labor costs, improve operational efficiency, and drive up per-worker productivity. The only question remains whether the flurry of investment will have the desired effect and shield European businesses from the bottom-line pain. If it does, Europe’s intertwined economies are certain to emerge from the coming recession looking quite different than they do today — and ready to face the challenges that await.