AI to Enhance Growth and Competitiveness in Europe

European governments are grappling with some urgent issues, like boosting economic growth and sharpening the region's competitive edge. It's pretty clear that one of the key strategies to ramp up the EU's competitiveness is by leveraging AI for growth.

A fresh report from Implement Consulting Group, funded by Google, suggests that generative AI could pump an additional €1.2-1.4 trillion into the EU's GDP, which is about an 8% increase over the next decade. The report also sheds light on how AI can supercharge productivity across different sectors.

The potential of generative AI to drive economic growth and enhance competitiveness is especially crucial for Europe. Mario Draghi's recent report highlights that Europe's competitiveness has taken a nosedive over the years: the EU's slice of the global GDP has dropped from over a quarter in 1980 to just 17% today. By 2022, US productivity outstripped the EU's by a whopping 20%.

But this report isn't just about numbers—it's about how AI can help folks be more productive, spur growth, and create sustainable jobs for the future. A whopping 74% of European workers see the productivity benefits of generative AI, and 43% believe AI will have a positive impact on their jobs. Our report estimates that 61% of jobs will be enhanced by generative AI, while about 7% might shift towards automation over the long term. Just like with past changes, like the advent of commercial aviation or the internet, AI-powered innovations will pave the way for new industries and careers. This could have a ripple effect across society, from improving public services to driving scientific breakthroughs and easing labor shortages by freeing up resources and boosting productivity.

Europe's productivity lag is mainly due to slower tech development, innovation, and adoption. As Mario Draghi puts it, "with the world on the brink of an AI revolution, Europe can't stay stuck in the 'middle technologies and industries' of the last century". To keep up, the EU needs to unleash its innovative potential.

A new agenda for AI-backed growth

That's why, alongside our Economic report, we're launching our AI Opportunity Agenda today: a set of recommendations for governments to tap into the full economic and societal potential of AI. The Agenda highlights the need to rethink Europe's workforce strategy, and invest in AI infrastructure, research, adoption, and accessibility.

1. Investing in research and development
   For the EU to really compete in AI, it needs to prioritize research and development and make funding more accessible. Without the right incentives to foster and commercialize AI innovation, Europe is holding back its talent and chances of spawning more home-grown tech unicorns.
2. Building infrastructure to support innovation
   AI breakthroughs hinge on having the right high-performance computing technologies and data centers—and the renewable energy to power them. To scale up AI innovation, the EU needs to funnel more funds into building such infrastructure, and also encourage and enable the private sector to do the same.
3. Improving skills and training programs
   Tech growth won't mean much if people are left behind. Given the EU's diversity, it must ensure technology benefits every business, economy, and individual. To achieve this, it needs to speed up the digital skills transformation, placing AI skills and education at the heart of a refreshed European Skills Agenda—and integrating it into school curriculums.
4. Promoting widespread adoption
   We need to make sure AI is applied and deployed in a way that's accessible and beneficial to everyone. For the private sector, EU policymakers and AI developers must collaborate to develop outreach strategies targeting traditional industries and small businesses, which stand to gain a lot from AI adoption. For the public sector, member states should ramp up existing initiatives to boost the public procurement of AI and set more ambitious AI adoption goals.

Taking action

Crafting good policy and responsible AI will require tight coordination among governments, the private sector, academia, and civil society. Through our AI Opportunity Initiative and other partnerships, we're committed to working with others to make this happen. But, as Mario Draghi pointed out, changes are also needed in the regulatory environment. Since 2019, the EU has rolled out over 100 pieces of legislation affecting the digital economy and society. It's not just the sheer volume of regulations that's the issue—it's the complexity. Shifting from a regulatory-first approach could help unlock AI's potential.

In many ways, Europe is well-placed to seize this opportunity. AI has the potential to help us build a better, fairer, healthier society—and to support competitiveness and inclusive growth.