Good morning, Peter Vanham here in London.
“Stable yet underwhelming”. It was the expression used this week by the International Monetary Fund to describe its global economic outlook for 2025, with global growth expected to remain at 3.2 percent, and European growth hovering around 1 percent.
But at our Fortune CEO Forum, which we convened this week in London, “stable yet underwhelming” was perhaps also the best way to describe the mood among participants. The event included 40 leaders from European companies such as Nestle, Roche, Adecco, and Accenture.
We organized the Forum under the Chatham House rule, to allow for a frank exchange among participants on some of the most pressing issues facing Europe-focused companies. And that led to conversations we otherwise rarely hear from Fortune 500 leaders.
On AI and innovation, for example, most participants acknowledged that Europe would likely never catch up with U.S. and its well-funded startups like OpenAI when it comes to the creation of dominant large-language models and other AI architecture. The fragmentation and risk-adversity of available capital was seen as one barrier; the “overregulation” of AI and other technologies by the EU as another.
Only when the bulk of AI’s impact moves into applications half a decade down the line, would European companies be able to compete again, predicted one participant.
Yet participants also expressed that those classic barriers – regulation and lack of capital – were only part of the picture of Europe’s declining competitiveness. Fundamentally, many admitted, Europeans have a “mindset” problem, where their own ambitions simply don’t reach further than national or European scale, at most.
Yet it wasn’t all doom and gloom. Some participants saw a bright future in European companies’ lasting ability to “premiumize” their products.
Two luxury companies – LVMH and Hermes – are among the top 5 of European companies by market cap. In an arena of declining competitiveness, the ability of European companies to grow and increase margins in product categories as disparate as wine or watches was seen as an example to follow.
And, as also became clear from the discussion in the room, European executives remain more committed than their US counterparts to embracing the green transition. It is one area where participants saw potential synergies between the EU’s more stringent regulation, and the general orientation of companies to decarbonize, and offer more sustainable and circular solutions.
More news below.
Peter Vanham
peter.vanham@fortune.com
TOP NEWS
Nobel-winning economists back Harris
23 Nobel prize-winning economists signed a petition released Wednesday arguing that a President Kamala Harris would be better for the economy than another Trump presidency. They specifically criticized Trump’s proposed tariff plans and praised Harris’ emphasis on helping the middle class. Fortune
Bolt CEO blasts fully-remote work
Bolt CEO Markus Villig ordered the Uber competitor’s 11,000 employees back to the office at least 12 days a month in retaliation for employees taking trips while working remotely. In an internal memo viewed by the Telegraph, Villig reportedly called his employees’ behavior a “disgrace.” Fortune
Boeing union rejects contract offer
Boeing’s factory workers union rejected a contract offer Wednesday night that would have guaranteed a 35% pay increase. The roughly 32,000 employees striking have cost the company billions and willl continue the work stoppage. Fortune
AROUND THE WATERCOOLER
Jump Trading is offering 4-day-a-week tech jobs with $175K salaries, but they come with a catch by Jane Thier
American Airlines is testing a new system to humiliate ‘gate lice,’ the people who try to board planes before their seating group is called by Sasha Rogelberg
OpenAI suffers departure of yet another AI safety expert, and fresh claims around copyright infringement by David Meyer
Inside CVS and Walgreens’ downturn: How misguided M&A damaged America’s drugstores by Phil Wahba
Exclusive: Ramp, valued at $7.65 billion, launches its own app store by Allie Garfinkle
Morgan Stanley’s executive chairman rescued the bank during the Great Recession. Can he do the same for Disney? by Michael del Castillo
This edition of CEO Daily was curated by Joey Abrams.
