1. Brick by Brick
Engineering innovation driven growth of Eastern European enterprises.
“The future of work” project
Team : Mech
Mathew John
Kerala, India

2. Refining the Refinery
A quick look at the general data and trends in EE
• Largely dependant on foreign ownership of industries and financial sectors.
• Growing exports is the key driver of economic growth. Exports are mainly absorbed
by western Europe.
• Current GDP growth averages at 3% , which is expected to remain relatively stable.
However, the recent reduction in GDP growth rates is a cause for worry.
• Top 500 regional companies reported a reduction of average net income in 2012.
The revenue growth of the 500 largest companies in Central and Eastern Europe
averaged 9.8% in 2011 and 7% in 2012
• Russia, Poland, Hungary and Czech Republic displayed exceptional resilience even
during the global financial melt-down. A great deal of it, owing to strong domestic
markets.

3. Holding it together
A look at the prospects and competitiveness of EE countries.
Key industries that
registered revenue growth Competitiveness
(2011-2012)
• Well-educated population with strong
• Process industries including
focus on science and engineering.
automobile and electronics
manufacturing.
• Remuneration costs are significantly
• Energy and Resources
lower than Western European levels
• Consumer and Transportation
although countries like Poland are
industries.
beginning to catch-up
Key sectors with significant
potential • A weak business environment continues
to limit the growth potential of EE
countries.
• Chemical Industry
• Life Sciences
• Deterioration of cost competitiveness has
• IT and Telecom
been observed recently, which can be
• BPO and KPO
offset by improving the business
operations for EU
environment throughout the region
.

4. Pedal to the metal
On the inherent strengths of EE
CEE is perceived as the third most
attractive region worldwide (at 21%) The potential to
for FDI. position itself as the
bridge between
Western Europe and
the Asian growth
Resource rich, with a very economies to the east.
strong Energy and resource
industry base. Countries like
Poland and Russia have a good
technology base for Main source of comparative
manufacturing and IT sectors. advantage has been a
CEE countries already have an combination of low
excellent infrastructure in taxes, relatively low labour
place for process industries. cost and a highly skilled but
affordable workforce.

5. Looking for cracks
On the general weaknesses of EE
Prescriptive business
practices and mostly based Ageing population
on compliance. coupled with brain
drain.
Bureaucracy, corruption, deficit
s in transparency and an
underdeveloped legal and tax
framework in several regions.
Limited collaboration
Despite between enterprises and
improvements, *shado research institutes.
w economy of EE Limiting the knowledge
countries is still quite production and absorption
sizeable, limiting the potential and failing to
availability of capital. ( capitalize in terms of R&D
Around 17% of the labour force.
official GDP)
*Shadow economy – Realm of legal business activities performed outside the purview of authorities.
*FDI- Foreign Direct Investment.

6. The big picture
>Vision for future management of EE companies<
Decentralization by
reserving only the An Adaptive
broad powers to the enterprise
top management. capable of
responding to
market signals
An observer committee
issuing non-mandatory
recommendations on
opportunities for localized
Allowing participants
to use not only their
units to coordinate with one
knowledge but also another to enable a more
their creative initiative effective enterprise
development.

7. A bigger picture
Engineering sustainable innovation
Creation of an Focus on
Innovation and Resource
collaboration productivity Sustainable
platform accessible Innovation
to select sectors of
an enterprise Prioritizing R&D
enabling free spending to
exchange of ideas. ensure optimal
use of available
funds and
Creation of a vigilant collaborating Recruitment of
system with research talented
to monitor and institutes. professionals from
assimilate effective Non-EU/EE
emerging technologies countries to offset
and to ensure optimal dwindling HR
allocation of resources pool.
in all key sectors

8. An even BIGGER picture
Interacting with the world.
Build stakeholder
relationship with offshore
locations and ensuring they Generating domestic sources
benefit from of competitiveness and
widened access to productivity improvements
technologies and transfer of
critical know-how.
Single operations center
supported by a network of Greater focus on B2B*
secondary centers across the marketing; leveraging the
globe aimed at creating a technology and infrastructure
global footprint. already in place.
*B2B- Business to Business
*Value chain: Linked set of all value-creating processes or activities that convert basic input materials into
products or services for the final consumer.

9. All the details in the fabric.
Making Internal collaborations work Maintaining competitiveness
• Considering projected returns with • Making greater use of cross border
collaboration costs and opportunity costs. value and supply chains in the EU to
Without a tangible business return, there strengthen quality infrastructure.
is no profitability in collaborated initiative.
• Initiating a data management
• Collaborate to facilitate transfer of best standardisation process, which is
practices of individual sectors to the required for getting reliable and
remaining sectors within the enterprise. consistent data from all divisions.
• Collaborating to make additional products • Strong focus on resource
available to the client. productivity and to adding value to
current products and processes.
• Creation of an observer committee to
evaluate all possible pairings to identify • Establishing a performance based
promising opportunities and to identify culture, sharing personal
the ones that can never work. responsibility and accountability
for the results of operations.

10. • Greater collaboration with domestic research institutions to facilitate innovation and
resource productivity.
• Developing contingency plans to face competitor reaction prior to deployment of a
solution, IF at all any are likely
• Using widely available software solutions to enable managers of localized units to
base consequential decisions on scientifically valid experiments. However, in the
interest of speed , managers with significant experience in a particular field may
proceed with decisions based on intuition.
• Creation of investment fund not included in operational and capital budget to fund
initiatives that can build capabilities and long-term competitive advantages.
• Training localized teams as a single unit and not as individual members on topics
ranging from best practices and operational efficiency to ethics and conducts.

11. Bibliography
“European Economic Overview” , Petr Zemick, Moody’s Analytics Economic Outlook Conference, Q4 2012 ,Thursday 29th November 2012
“Deeper, Wider and more Competitive ? : Monetary Integration , Eastern Enlargement and Competitiveness in the European Union”: Gianmarco Ottaviano ,Daria Taglioni and Filippo di Mauro; European Central Bank working paper series. NO 847/December 2007.
Roland-Berger Strategy consultants , “CEE in 2020 – Trends and Perspectives for the next decade”, November 2010, Vienna.
“Global Manufacturing Competitiveness Index”, Deloitte
www.euractiv.com, Jenna Grittersova, “Can Europe Escape the Eurozone crisis?”, Jun 2012
www.forbes.com, Mark Adomanis , “How Russia and central and eastern-europe fared after the financial crisis” 6/18/2012.
“Population Ageing in Central and Eastern Europe: Societal and Policy Implications” Andreas. Hoff, ed : Book Review by Marin Strmota, 2011
“University-Industry cooperation in central and eastern Europe : A common past, a different future ?” : Cristina Şerbănică , Gabriela Drăgan, 2011
“Size and Development of the Shadow Economy of 31 European and 5 other OECD Countries from 2003 to 2012” : Friedrich Schneider, December 2011
“Doing business in a more transparent world” : The World Bank and the International Finance Corporation , 2012
“European cultures and management styles”, Manfred Perlitz and Frank Seger, Department of International Management, University of Mannheim, Mannheim, Germany , International Journal of Asian Management (2004)
“Challenges Facing the Eastern European Researchers and the NMS and Bulgarian Future Ageing Research Priorities” : Prof. Elka Todorova, University of national and world economy, Bulgaria, Future leaders of ageing research in Europe (FLARE) Summer School September2010, Varna, Bulgaria.
“Growth, actually : Ernst & Young’s 2012 European attractiveness survey” , Ernst & Young. 2012.
European restructuring monitor quarterly 2011, 2012.
“Offshoring for Long-Term Advantage” The 2007 A.T. Kearney Global Services Location Index
“Chemical Industry Vision 2030 : A European Perspective”. , A.T. Kearney
“The Shadow Economy in Europe : Using payment system to combat shadow economy” , A.T. Kearney
“European Union and its Eastern Neighbours. Challenges and new chances of policy shaping” , demos EUROPA, Bertelsmann Stiftung, March 18-19, 2010, Sheraton Hotel, Warsaw
“Cultural Diversity and Human Resources Management in Europe”: Cristian MARINAŞ, Monica CONDRUZ- BĂCESCU
“Eastern Europe macroeconomic situation” , A.T. Kearney, Challenge Future , December 2012.
“Comparative Analysis Based on New Competitiveness Index”, Nebojša Savid Faculty of Economics, Finance and Administration – FEFA, Serbia nsavic@fefa.edu.rs
Images :
Background : www.wallpaperup.com
EE Map : A.T.Kearney “ Eastern Europe Macroeconomic situation”
Sources used to assist in vision building.
“The Meaning of 21st century” : James Martin
Harvard Business review , hbr.org
Management Today
Outlook
www.euractiv.org
www.forbes.com