Jan. 23 - As firms struggle to grow in tough times, business leaders meeting in Davos are facing the $5 trillion challenge, according to consulting firm Accenture. Some are reforming, or looking to emerging markets. Joanna Partridge reports.
It's a problem the business and political leaders meeting in Davos know only too well. How to find revenue in a world of low-growth. Some of the world's biggest companies are facing what's being called a $5 trillion challenge. Consulting firm Accenture estimates that's the amount of extra revenue the top 1200 global companies need to find each year, just to meet analysts' expectations. Five years on from the finanical crisis, investors aren't content with cost cutting - they want to see firms growing their sales again too. But businesses are still behaving cautiously, says Mark Weinberger from Ernst and Young. SOUNDBITE: Mark Weinberger, Global Chairman and CEO-elect, Ernst & Young, saying (English): "I think a lot of companies look back at what they just came through, they look forward and they see uncertainty in the regulatory environment we just talked about, in the legislative environment in various parts of the world, in the growth, what will happen in Europe still, and so they're investing, but they're still not hiring at the rate we need to see hiring." A suggestion at the World Economic Forum in order to spur growth is to look to emerging markets. That's part of the strategy at train and plane maker Bombardier says CEO Pierre Beaudoin. SOUNDBITE: Pierre Beaudoin, President and CEO of Bombardier, saying (English): "Certainly from a moving out of the crisis perspective, we feel the momentum building in the U.S. in terms of our products so if the U.S. is doing well, it certainly helps the rest of the world economy. We've been doing well in emerging countries but now that there is momentum being built in the U.S., I think that's very good." Some delegates say there's cautious optimism at the WEF. The euro zone appears to have stepped back from the brink. Italy - for one - believes the worst is over, although it favours more liberalisation. SOUNDBITE: Mario Monti, Italian Prime Minister, saying (English): "Italy wasted a significant primary surplus and lived on the illusion that we could promise change without ever delivering any real reforms. This is what one can describe as promising reforms and ending up with taxes, and with debt and with a sovereign debt crisis. Italy had failed to take on the challenges of globalisation, demographic change and technological innovation." Many other countries and businesses are currently carrying out reforms. But they know they'll have to be innovative too to grow given the current conditions.