In 2023, European businesses and consumers will face substantial headwinds created by the combination of the aftermath of the COVID-19 pandemic and the effects of the Russia-Ukraine war, including an energy crisis, inflation rates at a 40-year high, and an EU economy whose prospects are worsening by the day.
To help European business, marketing and technology leaders prepare for a tumultuous 2023, here are some of Forrester’s most important predictions for the year ahead:
- By the end of 2023, only one in five European citizens will still trust their government. With less financial wiggle room after two years of pandemic financial support, European governments will struggle to support their shivering citizens through a winter of high energy costs — and some will shift that responsibility onto businesses. For example, the UK government has already increased regulatory pressure on financial services firms and utility providers to protect vulnerable consumers (e.g., FCA’s Consumer Duty of Care). As a result, consumers’ trust in government across Europe will drop significantly, giving Europe’s companies the chance to fill that trust vacuum.
- The percentage of Europeans who fall into Forrester’s “active green” segment (i.e., they strongly prefer buying environmentally friendly products) will grow from 24% to 36% by year’s end. Today, 58% of European consumers monitor their home energy usage to reduce their environmental footprint, Forrester data shows. Soaring costs plus financial incentives from governments and utilities firms to reduce energy consumption and adopt more sustainable lifestyles will entice 50% more consumers to join the “active green” ranks by the end of 2023.
- Tech devaluations and layoffs will make “unsexy industries” attractive as employers again. Over the last decade, sky-high valuations of technology companies and rivers of VC funding have starved established companies outside the tech sector of digital talent. No more. European startups like Gorillas, Menmo, and Nuri cut between 10% and 40% of their workforce. In the past, hotshot techies and marketers might have scoffed at stodgy financial services or utilities firms, but those with less appetite for risk will find the comparative stability offered by incumbents in those industries more attractive in an uncertain economy.
To understand all of the major dynamics that will impact European businesses next year, download Forrester’s complimentary Predictions guide or visit our European Predictions hub. For more guidance navigating the changes ahead, reach out to us.