Most of the information presented in the ten previous chapters describes how economic policies, political systems, country histories, and the EU affect Europe’s business environment. The purpose of this chapter is to show: (1) how several industries in Europe are structured; (2) how specific companies and their strategies have fared in this region; and (3) some of the issues these industries are facing as a result of national government, EU, or international dynamics and decisions. The five industries described here are not necessarily the most important ones in Europe in terms of contribution to economic activity, employment, or exports. However, they are industries that receive significant attention in the media, academia, and policy circles. They also are sectors that have interesting stories to tell. Thus, the reader should get a sense of how “real world” companies navigate Europe’s business environment, and how the issues discussed earlier in this book relate to them.
European business background
Capitalism originated in Europe. It was the growth of the merchant class in Europe during the late Middle Ages and Renaissance period that gave rise to the industrial revolution of the late eighteenth and nineteenth centuries and the loss of influence among the land-owning aristocracy. It was from Europe where much of the early intellectual writing about capitalism, from the likes of Adam Smith and David Ricardo, originated and shaped trade and investment patterns. It was Europeans who began to search for global markets in the fifteenth century by sending ships on the high seas to all corners of the earth. Thomas Friedman, in his best-selling book The World is Flat: A Brief History of the Twenty-first Century, refers to this period as “Globalization 1.0” – a period when kings and queens sought global markets for the greater glory of their countries (Friedman, 2005). Not long afterwards, the early multinationals began to take shape, including the Dutch East India Company (the first stock-issuing company) and similarly named companies from Britain, Denmark, France, and Sweden. Hudson’s Bay Company, English East India Company, British South Africa Company, Massachusetts Bay Company, Mississippi Company, and dozens of other early multinationals played key economic and political roles (some positive, others less so) in far-flung regions around the world.