As signs of modest economic improvement continue to emerge in Europe, 67% of business leaders from both the European Union (EU) and the rest of the world are more optimistic about the prospects for European growth in the year ahead than they were twelve months ago, according to a survey by Accenture commissioned by the Federation of Enterprises in Belgium (FEB).

And, despite continued volatility and sluggish economic growth, business leaders are recognising longer-term growth potential in Europe, evidenced by the 45% of survey respondents who plan to increase their investment levels in Europe by between 5% and 20% over the next three years. 10% of respondents plan an investment increase of more than 20%.

At the same time, the majority of business leaders signalled that there should be no let-up in European governments' programmes of fiscal consolidation. 71% of business leaders believe that the actions being taken by European governments to reduce their budget deficits and levels of public debt are either "too slow" or "about right".

The survey is based on more than 400 responses from top level business executives who do business in Europe, representing companies from around the world. Among a wide range of questions on European business and economics, executives were asked to identify the things that will drive Europe's recovery and to specify the actions that will be needed to sustain that recovery:

Rudi Thomaes, Chief Executive Officer of the Federation of Enterprises in Belgium, commented "over the last three years, Europe's economies have been hit hard. But today, Europe has the opportunity to harness new waves of growth by ensuring that governments and businesses work towards the same goals. Economic diplomacy aiming at building more bridges with emerging markets is an obvious example."

The report covers a wide range of current business issues, including the challenges and opportunities for European businesses in the areas of green technologies, global trade, talent and workforce skills. It also looks at the challenges facing small and medium-sized enterprises.

According to the executives surveyed, Europe needs to restore macro-economic stability by tackling budget deficits and debt levels, which they believe would provide the foundation for the return of long-term market confidence and investment.

An Accenture Spokesperson, said "a clear conclusion from this study is that Europe must do more to capitalise on its key strengths, or risk falling behind other economic regions. Europe has a well-educated and generally skilled workforce, for example, but its labour-market outcomes, in terms of productivity and employment, are less successful than those in the United States."

 "Although Europe possesses an abundance of innovation inputs, excellent research institutions, high volumes of pure research, and many research-intensive companies, it is failing to commercialise much of that research into new products, services and business models that could give Europe a renewed lead in international markets."

The study identifies several key drivers of future growth and job creation for Europe, stemming from:

• Demographics: The greying of Europe's population will create opportunities in age related demand in the areas of healthcare, financial services, tourism and leisure and consumer products.

• Resources: The squeeze on global resources, land, water, energy and food, will present growth opportunities for Europe in areas such as clean technologies, wind turbines, carbon capture and storage, smart buildings and cities, carbon finance, agribusiness and water management technologies.

• Technology: Major breakthroughs are occurring in a whole range of technologies, superfast broadband, cloud computing, mobile and robotics, materials, nanotechnology and biotechnology. These technologies promise to transform business models and competition in sectors as diverse as education, healthcare, transport, music, manufacturing and logistics.

• The emerging-market opportunity: A burgeoning group of middle-class consumers, rising income levels and increased access to credit are creating a critical mass of demand in emerging consumer markets such as consumer electronics, automobiles, healthcare, insurance and banking. Accelerating urbanisation is also powering demand for hard infrastructure, such as transport and communications and soft infrastructure, such as healthcare, education and citizen services. These are all areas from which Europe can stand to benefit.

Business leaders identified actions in seven key areas that can help Europe ignite these growth opportunities:

• Stabilising public finances and creating early warning systems to prevent the build-up of future economic imbalances and financial crises

• Removing the barriers to faster SME growth through simplified regulation and taxation, and more imaginative use of the latest technologies such as cloud computing

• Improving the geographic mobility of workers within the EU and investing in STEM skills to prepare Europe for the jobs of the future

• Harnessing the impact of ICT and digital media for faster economic growth through a focus on superfast broadband, clearer regulation, and the improvement of digital skills among the population at large.

• Strengthening European innovation performance through a focus on services innovation, measures to develop and retain innovators, and the use of technology to promote knowledge exchange.

• Reinvigorating European industrial strategy, by strengthening the links between industry and services, forging stronger ties with emerging-market businesses, and creating centres of excellence in key technologies or sectors where Europe has a competitive advantage.