The global landscape is increasingly defined by the transformative power of emerging technologies. Artificial intelligence, in particular, has emerged as a cornerstone of competition among nations. As countries invest heavily in innovation, production, and adoption of advanced technologies, new arenas of strategic rivalry are forming. Europe, however, faces significant challenges in this arena. Between 2015 and 2022, European companies lagged behind their American counterparts by investing €700 billion less annually, with an average investment shortfall of €3,000 per person. This disparity has led to lower returns on invested capital for European firms, widening the gap between Europe and the United States.
Despite these challenges, Europe remains competitive in only four out of 14 critical technologies essential for the future global economy. The consequences of this technological lag could be profound, potentially leaving €2 trillion to €4 trillion in GDP contributions unclaimed by 2040. This amount surpasses the continent’s current annual funding requirements for achieving net zero emissions, defense, and healthcare combined. To address these issues, Europe must focus on strategic initiatives that enhance its economic and technological competitiveness. A consensus is emerging on the broad categories of actions needed to drive change, including proposals from prominent figures like Mario Draghi and Enrico Letta, as well as institutions like the McKinsey Global Institute. Completing the single market and streamlining regulations could unlock substantial investment opportunities.
To turn ideas into action, Europe needs a focused strategy that emphasizes both speed and scale. The proposed framework outlines where Europe should concentrate its efforts and how it can achieve success. For each of the 14 critical technologies, tailored strategies are identified based on their strategic importance, maturity, and Europe’s starting position. In areas where Europe leads, such as private wireless rollout, it should defend and expand its global leadership while carefully balancing the benefits of scale against potential risks. In nascent technology sectors where Europe holds strengths, rapid scaling and commercialization are crucial. For technologies where Europe lags, leapfrogging to the next generation or focusing on specific niches may be the best approach. In areas where Europe is far behind, reallocating resources toward leveraging global front-runners’ investments and capabilities is advisable.
Mobilizing private sector-led initiatives can create momentum for much-needed changes in the investment environment. High-impact projects, such as developing advanced AI applications in finance or healthcare, or launching a semiconductor skills exchange program, can serve as catalysts for broader progress. Public sector initiatives also play a vital role in fostering a more investment-friendly environment. Ten key “grands projets” have been identified, including establishing uniform investment-friendly rules across Europe and creating a streamlined digital permitting system. These initiatives aim to rapidly transform the investment landscape, enabling Europe to seize opportunities in critical sectors like healthcare, defense, and energy.
All stakeholders—public and private—must collaborate closely to translate these ideas into tangible actions. The private sector can provide valuable insights into where and how Europe can compete most effectively, while the public sector must adopt bold policies to catalyze change. With an ambitious mindset, Europe can overcome its technological and investment challenges, positioning itself as a leader in the global economy. This journey requires vision and determination, much like the introduction of the euro, to achieve a lofty ambition despite complexities and risks.
Corporate separations, including spin-offs, divestitures, and carveouts, have gained significant traction as a means to unlock value. However, the surge in popularity does not guarantee success for all parties involved. This article explores the critical practices that enhance the likelihood of creating value for both the remaining and newly separated entities. Key areas of focus include leadership alignment, operating model optimization, talent management, and cultural transformation. By integrating these elements into a comprehensive separation strategy, organizations can better navigate the complexities of such transactions and achieve their strategic objectives.
Optimizing Operating Models for Enhanced Competitiveness
The foundation of a successful separation lies in developing an operating model that strengthens both the existing and new businesses. Leaders must strategically consider the people and culture at the core of this model. Addressing key questions related to structure, processes, workforce size, talent, and performance management is crucial. For instance, determining the appropriate organizational setup and streamlining back-office functions can significantly reduce complexity and improve efficiency. Companies that fail to address these factors risk becoming less competitive post-separation.
To illustrate, a diversified oil and gas conglomerate successfully spun off one of its upstream businesses by adopting a leaner regional structure and back-office support system. This move not only decreased operational burden but also allowed for increased investments in digital and sustainability capabilities, aligning with the new entity's vision for future growth. By carefully planning the operating model, companies can ensure that both the remaining and new entities are well-positioned to thrive independently. The emphasis should be on creating a tailored, world-class operating model rather than a mere replica of the parent organization.
Building Talent and Culture for Sustainable Growth
Talent allocation and cultural transformation are pivotal in ensuring the success of corporate separations. Research indicates that talent management is the second-most critical challenge after transitional service agreements. Leaders must act swiftly to identify key roles, increase visibility, and appoint change agents who can support the transition. Effective talent strategies involve selecting the right individuals, retaining critical employees, and seamlessly transferring personnel between businesses. Additionally, reassessing and closing any gaps in talent allocation ensures alignment with the new operating model.
Culture plays a vital role in driving high performance. Leaders of high-performing organizations consistently communicate values and mission, model positive behaviors, and engage influencers within the company. A separation provides an opportunity to redefine the culture of the new entity, emphasizing agility and consumer focus. For example, a healthcare divestiture led to a newly separated consumer health organization that embraced a more agile and customer-centric approach. Leaders explained the new values and ways of working, implemented faster approval timelines, and attracted fresh talent aligned with the new culture. Regular performance conversations and capability-building initiatives further supported employee growth and productivity. Ultimately, inspiring employees with a compelling vision for change can lead to a smoother transition and greater success for the new organization.
A nonprofit organization from Puerto Rico has received initial approval for its ambitious sustainable teaching farm project in Newbury, Vermont. The Development Review Board has set several conditions that must be met before construction can begin. This project aims to enhance the community through hands-on learning and workshops focused on food security, climate resilience, and sustainable living practices. Despite some logistical challenges, particularly concerning parking arrangements, the organization remains optimistic about the project's future.
The Approval and Conditions
The nonprofit Plenitud PR has secured conditional approval from Newbury's Development Review Board for the first phase of its sustainable teaching farm. The board has outlined over a dozen requirements that need to be addressed before construction can proceed. These conditions range from minor paperwork discrepancies to more significant concerns raised by residents and board members during a hearing in November. While the nonprofit is required to make design adjustments and conduct extensive research, it views this ruling as a positive step forward.
The conditions imposed by the board include addressing parking issues, ensuring compliance with state-level regulations such as stormwater and wastewater permits, fire safety, and Act 250, which governs large developments in Vermont. Initially, Plenitud planned to allocate six to eight parking spaces, encouraging attendees to park in nearby public lots or carpool. However, the board deemed this plan unfeasible and mandated up to 20 parking spaces to accommodate expected event attendance. Jessica Jones Hughes, Plenitud’s associate director, noted that these changes are manageable given the size of the property and is currently working on identifying suitable parking areas.
Vision and Future Plans
Plenitud PR envisions a regenerative farm on a 101-acre plot off North Road in Newbury. The project spans three phases over 20 years, with the first phase focusing on renovations and initial agricultural projects. Renovations will include the existing house and barn, building cabins, an artist studio, and starting greenhouses and livestock facilities. Future phases aim to further develop the property, including additional housing and ongoing improvements. The nonprofit plans to host events and overnight workshops that teach techniques for enhancing food, water, and housing security.
Jones Hughes emphasized that the farm project aims to enrich the community by sharing sustainable practices through hands-on learning experiences. Despite the numerous conditions, the timeline remains unchanged. The nonprofit still plans to host a pilot event this summer and fully launch in 2026 with the first groups of students. Although there are challenges ahead, Plenitud remains committed to moving forward step by step, confident that the project will complement and support existing initiatives in Newbury. The nonprofit views the board's decision as a constructive guide that clarifies what can and cannot be done as they envision the next phase of development.