EY’s Julie Linn Teigland on Investing in Europe

As EY EMEIA Area Managing Partner, Julie leads a geographic area comprising member firms with more than 121,000 people across 97 countries and representing combined revenues of US$15.7b. In this role she is responsible for international tax advice, auditing, advising large clients and accompanying business transformations. Julie was named one of Fortune magazine’s Most Powerful Women International in 2021.

With three decades of experience in professional services for international clients, her focus is on transformation processes, particularly on the challenges of digital transformation, and is committed to the sustainable development of capital markets and their framework conditions.

Julie has served as lead partner for several Fortune 500 clients. Previously, she led one of the largest EY regions in EMEIA: Germany, Switzerland and Austria, where she led business transformation efforts within EY and with member firms’ clients, as well as several major acquisitions. Julie is also the Global Leader for the EY Women. Fast forward initiative and is a key player in progressing gender equality. She is a prominent voice of the Women20 (W20) global agenda.

EUROPEAN BUSINESS: Some uncertainties caused by Russia-Ukraine war seem to affect companies’ investment decisions in Europe. Could you share some insights on how to mitigate risks when investing in Europe?

Julie Linn Teigland:

All businesses with a presence in Europe have felt the ripple effect caused by uncertainties, whether that be escalating costs of energy and commodities, sanctions of clients and partners, or more pronounced undercurrents of social tension in many countries. Longer-term trends are also at play. For example, businesses are adopting new technology at breakneck speed. Consumers, employees, investors and regulators are putting increasing pressure on business to address climate change and other societal challenges.

To be able to handle these complexities, increasing since COVID-19 and clearly accelerated by the Ukraine war, corporates must map dependencies. This is an essential step in understanding investment risk. Every management team, corporate board and even government should be regularly reviewing their dependencies. Let’s take an obvious one as an example — in Europe we’ve realised the overreliance on Russia for energy and the need to shift that dependency. But dependencies can be much more subtle, for example, on raw materials, or specific suppliers or markets. The mapping and regular review of dependencies is a great risk mitigation tool for investors.

EUROPEAN BUSINESS: Covid-19 has had a large and uneven impact on global supply chain and people’s daily life around the world. But COVID-19 is also accelerating digital transformation for many industries. How can companies achieve business transformation through digital investment, what are the opportunities in Europe?

Julie Linn Teigland:

Let me start by mentioning the importance of digital, especially in the context of securing foreign investment. The level of technology adoption by consumers, citizens and administrations is the most important factor that determines where businesses invest, according to this year’s EY European Attractiveness Survey. Last year, this ranked joint fifth. The increase in importance reflects the huge investments many businesses have made in technology since the onset of COVID-19 to facilitate remote working and digital customer propositions. Businesses need employees with technology skills to sustain their increasingly digitalized operations. And this is likely why the level of technology adoption is considered so important: businesses view this as a proxy for countries with an abundant supply of workers with technology capabilities. Furthermore, when asked which technology-related factors are most important when choosing a country to invest in, the availability of a workforce with technology skills ranked first. Skills aside, businesses also consider this so important because it eases the process of interacting with tax authorities, regulators and other government agencies.

However, businesses also rank the legislative framework for digital services and markets as the second-greatest risk to Europe’s attractiveness. Foreign investors have questions about the Digital Markets Act — designed to stimulate competition within Europe’s digital sector — and the Digital Services Act — a range of regulations that protect technology users from misinformation, cyber threats and market dominance — and their impact on the digital industry across Europe. However, encouragingly, 56% of investors believe Europe is more attractive than other regions when it comes to technology-related factors.  All of these facts and statistics point to the fact that digital is a clear opportunity – across the entirety of the business. Digital investments can impact the strategy of the business, from looking at new revenue streams, to the operating model, determining how far a company can and should be accretive in the value chain. Technology has massively allowed the support functions of a company to be redesigned for effectivity and experience, and digital can have a major impact on talent attraction. All of these areas represent opportunities for companies to explore in Europe.

EUROPEAN BUSINESS: From your observations, which European regions or countries are the FDI hotspots in 2022? And what are the most appealing industries and sectors this year?

Julie Linn Teigland: 

EY recently analysed this topic as part of our annual European Attractiveness Survey which assesses the attractiveness of 44 countries in Europe for FDI and surveys 501 international investors across a range of industries and business types. Overall, we see that businesses are facing more complex and rapidly evolving challenges than ever before.

France, Germany, and the UK are the top markets for FDI as the largest markets in Europe; however, their economic prospects and growth sectors have shifted significantly, as we found in this year’s survey. A post-pandemic rebound and “Macron reforms” caused investment in France to excel 24%, to 1,222 projects in 2021. Investment in the UK remained steady, increasing 2% to 993 projects; London remains the most attractive city for FDI with 34% of executive respondents ranking it as a top-three city for investment. In contrast, the number of projects in Germany fell 10% to 841. However, it also attracted large, industrial projects, especially in the automotive and electronics sectors. In terms of job creation, the story differs, with the average FDI project creating 68 jobs in the UK, 45 in Germany and only 38 in France.

EUROPEAN BUSINESS: EY is no doubt one of the leading FDI advisors in Europe, can you tell something about your team and the clients you served recently? For clients, how to select a good advisor when they plan for a big FDI project in Europe?

Julie Linn Teigland:

EY is a multidisciplinary firm, operating in over 150 countries with over 300,000 employees focused on delivering long term value for our customer, our people and our communities. We strive to address the forces of transformation including trade, technology, sustainability and trust with humans at the center of all we do.

In choosing the right advisor I think an integrated network and project experience that is documented with references are critical. Our teams work on all type of FDI transactions including strategy, location services, financing, tax compliance and incentives and credits.

EUROPEAN BUSINESS: Julie, you are a very senior FDI advisor with nearly three decades of experience in professional services.  Could you tell us something about your personal experience and lessons learned in this industry? Could you give some advice to the young practitioners?

Julie Linn Teigland:

I think every professional needs to be the CEO of their own career. This means they need to take control and actively seek out further experiences. This does not necessarily mean changing organizations, but a change of perspectives every 3-5 years is a critical way to ensure that a professional is developing and continually learning:

 I truly believe that the careers of the future will be based on lots of building blocks of individual experiences that come together to build a mosaic. And the piece that holds it together is the purpose that drives you. What do you want to do? Where do you want to have an impact? If you try to put your purpose ahead of experience and be bold and brave enough to leap into cold water for your next experience you’re going to learn a lot and it’s this development that makes you stronger

On a personal level, I hope that our leaders in the business want to leave a legacy. For example, I want EY to be better off in the future. I believe at the end of my career, I will have contributed to shaping professional services and hopefully many, many professionals, impacting their careers in a positive way. That’s where I would most like to have an impact.