Glenn Magerman on value chains, productivity, and the European economy
How are companies interconnected through value chains? Why does Europe face a productivity challenge? And what can entrepreneurs do to remain competitive in an economy increasingly shaped by technology, international competition, and global value chains?
In this episode of the Never Overdue Podcast, Jean-Paul Van Damme (AAA) talks with Glenn Magerman, economist and professor at the ULB. Magerman investigates how companies worldwide are interconnected through value chains: networks of suppliers and customers that together form the economy.
The conversation covers economics, but focuses primarily on what these economic developments mean for businesses. Interest rates, energy prices, productivity, innovation, talent, and international competition are all addressed.
What are value chains and why are they important for businesses?
A company never stands entirely alone. Businesses are interconnected through suppliers and customers. Together, these relationships form so-called value chains.
According to Glenn Magerman, it is therefore essential to view the economy not just through individual companies or sectors, but as a network. When something changes somewhere in that network, it can have consequences for companies further down the chain.
A rising energy price or a disruption in production, for example, cannot be limited to a single enterprise. Due to mutual interdependence, changes can spread throughout the value chain.
New data sources, including VAT transactions between enterprises, make it possible to analyze these economic networks with increasing precision, according to Magerman. This provides insight into where risks and opportunities lie within an economy.
Why are value chains relevant for entrepreneurs and CFOs?
For entrepreneurs and CFOs, thinking in value chains means looking beyond your own organization. Suppliers, customers, and other companies you are connected with can also influence your business results.
A change at one player can, after all, have consequences for other enterprises in the network. The more strongly companies are interconnected, the more important it becomes to understand where dependencies and potential risks reside.
Economic data can help in this regard, not only to look at the past but also to better understand how companies and markets are interconnected.
Why does Europe face a productivity challenge?
A key theme in the conversation is Europe’s competitiveness. According to Glenn Magerman, Europe has been struggling with relatively slow productivity growth for some time. This has consequences for the competitive position of European companies against the United States and China, among others.
Other factors also play a role. Higher energy prices increase costs for European enterprises, while fragmented regulations can make it more difficult for companies to scale up internationally quickly.
Furthermore, different national rules exist within Europe. For enterprises wishing to be active in multiple countries, this can mean they have to organize different legal structures and processes. This increases complexity and can slow down international growth.
How can European companies remain competitive?
Despite the challenges, Glenn Magerman remains optimistic about Europe’s potential. According to him, Europe still possesses significant assets in terms of education, knowledge, and research.
This knowledge base forms a vital prerequisite for technological innovation. For companies, this means that investing in knowledge, technology, and talent remains essential to stay competitive.
The challenge, according to this vision, lies in combining that knowledge with sufficient capital and entrepreneurship. Companies that succeed in this can create new opportunities and continue to grow, even in a complex economic environment.
Why are innovation and talent important for economic growth?
Technological innovation does not arise from technology alone. It also requires people with the right knowledge and skills to develop and apply that technology.
For entrepreneurs, this means that talent development and knowledge become strategic factors. Investing in employees, technology, and expertise can help companies become more productive and innovative.
In an economy where technological developments follow one another rapidly, it also becomes increasingly important to be able to continue learning and adapting.
What can entrepreneurs learn from the European economy?
The most important lesson from the conversation with Glenn Magerman is that companies cannot be viewed in isolation from their economic environment.
Entrepreneurs and CFOs must not only look at their own figures and processes but also understand how their enterprise is connected to suppliers, customers, markets, and international developments.
Value chains, productivity, interest rates, energy prices, regulation, and technological innovation can all influence business strategy. Those who better understand these connections can, according to the insights from this podcast, better see where risks and opportunities arise.
Conclusion: understand the network in which you operate your business
The conversation with Glenn Magerman makes it clear that economic developments have a direct impact on the business world.
Companies are part of value chains in which a change at one player can have consequences for others. At the same time, Europe faces challenges regarding productivity, energy prices, regulation, and international competition.
Yet, according to Magerman, Europe possesses significant assets: knowledge, education, research, and talent. For entrepreneurs, the challenge lies in combining these assets with technology, capital, and entrepreneurship.
The common thread? Do not only look at your own company, but also understand the economic network in which you operate.
Frequently asked questions about Glenn Magerman, value chains, and the European economy
Glenn Magerman is an economist and professor at the ULB. He investigates how companies are interconnected through value chains and how economic developments impact enterprises and markets.
A value chain is a network of companies interconnected as suppliers and customers. A change at one enterprise can therefore have consequences for other companies within the same chain.
Value chains make it clear that companies are interdependent. Changes in, for example, energy prices, production, or demand can spread through a network of suppliers and customers.
According to Glenn Magerman, Europe has experienced relatively slow productivity growth for some time. Higher energy prices and fragmented regulations can also hinder the competitive position and international scalability of European companies.
Investing in knowledge, education, technology, and talent remains important according to the insights from the conversation. These elements must be combined with capital and entrepreneurship to enable innovation and growth.
CFOs and entrepreneurs can look beyond their own organization and also analyze relationships with suppliers, customers, and other companies. This gives them better insight into dependencies, risks, and opportunities.
