1、Industrials&Electronics PracticeEuropean machinery companies:Achieving balance through innovationWhat can help European countries move the needle as the labor shortage worsens and inflation and costs rise?Investing in new tech,talent,and products;programmatic M&A;and decarbonization.September 2023by

2、 Samuel Bayerlein,Dorothee Herring,and Thorsten SchleyerThe European machinery sector continues to operate within an uncertain and volatile macroeconomic environment characterized by the ongoing war in Ukraine,the resulting energy crisis,and per sistent supply chain challenges.Some companies have fa

3、red better than others.Our research suggests companies that weathered the crisis of 2020 were able to solidify their advantages,emerge stronger than before,and deliver sustained growth in the subsequent two years.The road ahead offers both new challenges and new opportunities for the machinery indus

4、try.A solid order intake for the future indicates continued demand for machinery products and services.However,profitability is again under pressure,largely because inflation is raising material costs and consequently the cost of goods sold.To stay competitive,European machinery companies will need

5、to address the growing labor shortage by attracting,developing,and retaining skilled talent.They will also need to spur technological innovation at scale and at pace,decarbonize,and shift toward sustainable energy sources.A programmatic M&A strategy can advance these efforts,enable the digitalizatio

6、n needed to implement improvements,and support integrated solutions and services to unlock potential recurring revenue streams and create additional value for customers and companies alike.1 Henry Legge,Fabian Newger,Thorsten Schleyer,and Ville Vliaho,“The ascent of Nordic companies in the global ma