Page 198 - Accelerating out of the Great Recession

APPENDIX B

In September, companies also predicted that governments
would take a greater role in the economy for some time to come.
Given the recent debate on financial sector reforms, it comes as
no surprise that 80 percent of companies expected government
regulation to increase. French respondents showed a clear con-
sensus on this, with 97 percent expecting regulation to increase.
Three-quarters of all companies also expected monetary and
fiscal policies to remain expansionary in the near term.
A slimmer majority, however, was convinced about related
opportunities for their businesses. We asked respondents
whether they felt that economic stimulus measures would pro-
vide lucrative business opportunities and foster growth for their
companies. Roughly 50 percent believed that this would be the
case. In France, nearly 70 percent believed that the stimulus
measures would create opportunities.
Companies expected to see a more competitive environment
through 2010. In particular, more than 60 percent said that they
were preparing for greater competition from the so-called
global challengers in rapidly developing economies. This figure
is even higher for the telecom and software services industries.
A similar percentage also expected greater consolidation within
their industries. Besides increased competition, more than 90
percent believed that increasing price sensitivity among con-
sumers will present an additional challenge. As a result, two-
thirds of companies forecasted a difficult growth environment
for the next few years and lower profit levels overall.
We argued in Chapter 5 that in order to thrive in an adverse
economic environment, innovation will be essential. Many of
the companies we surveyed agreed. On average, 64 percent of
companies expected the focus on innovation to increase in their
industries; this percentage was even higher (70 percent) in the

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