In 2024, the EU expects a much more normal 3.2% inflation rate, but that just means that today’s high prices will increase more slowly — and if we don’t get lucky with El Niño, European energy prices could still skyrocket in winter 2023–2024. There’s no end in sight to the war in Ukraine, and the EU expects 1.4% in GDP growth for 2024; that’s a big improvement on the dismal 0.8% we’ll see in 2023, but it’s still anemic, and unemployment in the EU will remain near a 20-year low, at just 6.1%. So in sum, Europe faces yet another “may you live in interesting times” kind of year in 2024.
To help European business, technology, and marketing leaders navigate this maze of ambiguous business signals, here are some of Forrester’s most important predictions for the year ahead:
- Fifty percent of large European firms will proactively invest in AI compliance. The EU is finalizing the AI Act, and its enforcement will begin in 2025. Because of the AI Act’s complexity, its global implications, and the significant financial risk it entails, companies can’t afford to be unprepared. European firms will kick off their AI compliance efforts in 2024, and Forrester predicts that 50% of large European firms will proactively invest in AI compliance in the next 12 months. From acquiring new technology and talent to securing the third-party support they need, firms must define their AI compliance strategy and begin implementing it immediately.
- Just 20% of in-scope firms will meet the Corporate Sustainability Reporting Directive (CSRD) reporting deadline. The first batch of firms must report according to the EU’s Corporate Sustainability Reporting Directive (CSRD) on their 2024 financial year (which means they must produce their first reports in early 2025), but just a few committed sustainability leaders will be ready in time. Some firms will drag their feet on purpose because they’ll assume that enforcement won’t be a top priority for EU member states. Others will try to comply but fail because of complex rules and confusion about precisely how the rules will be implemented (France will be the first EU member state to transpose the directive into national law in December 2023). If you must report on 2024 and aren’t already well advanced in your preparations, get cracking. And if your firm will be covered for financial year 2025, start recruiting for key internal roles and locking in the service providers that you’ll need now — because the consulting and accounting firms won’t have enough experts to go around.
- Forty percent of European employees will work from home regularly. My adoptive country of the Netherlands leads the continent in its support for flexible working, with 74% of workers allowed to work remotely in 2023. It’s less common in other European countries, but on average, 30% of Europeans currently take advantage of hybrid work arrangements. And only 11% of European business leaders expect employees to return to the office full-time. For comparison, in 2023, 28% of all US employees’ workdays are spent working from home. With more flexible working legislation to come into force in the UK and the EU in 2024, we predict that Europe will outpace the US in flexible working next year, with 40% of Europeans working remotely at least some of the time. Hence, European firms must invest in a new model of collaboration to empower their hybrid workforce.
For more insight visit the Predictions 2024 hub. Register to join the Predictions 2024 Global Live webinar here.
This blog was written by VP, Group Director Laura Koetzle and it originally appeared here.
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