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AI adoption could add £512bn to European economy by 2030, finds report

Written by Tue 6 Feb 2024

Over a third of businesses in Europe adopted artificial intelligence (AI) in 2023, according to a report by Amazon Web Services (AWS). If maintained, AI could add £512 billion ($644 billion) in gross value added (GVA) to the European economy by 2030.

The independent report, titled ‘Unlocking Europe’s AI Potential in the Digital Decade’, underscored the potential economic impact of tech adoption in Europe. It projects a significant increase from the 2022 forecast, estimating the total economic impact to reach £2.9 trillion ($3 trillion) by 2030.

However, many key capabilities of successful tech adoption are not keeping pace with raised ambitions. The report found Europe needs to increase its digital skills, supporting infrastructure, consumer confidence, and cybersecurity.

AWS said access to AI capabilities must be democratised so small businesses and startups can benefit from AI.  

Currently, the use of AI and other digital technologies is skewed towards larger companies (51% versus 31% of small to medium-sized enterprises). The report cited finding the right talent, regulatory concerns, and the cost of implementation to barriers to AI adoption.

AWS commissioned independent policy and research consultants, Strand Partners, to conduct representative studies of over 16,000 citizens and 14,000 businesses across the European Union, the UK, and Switzerland. 

The report intended to examine where Europe finds itself on its journey towards realising the European Commission’s Digital Decade goals. AWS also found the European Commission is anticipated to miss its goal of having at least 20 million people employed as IT specialists by 2030 by eight million individuals.

Regulation and Skills Gap Limiting AI Investment

A lack of digital skills is the most frequently cited challenge by citizens and businesses. More than half of respondents (61%) said a digital skills gap impacts their business performance. Over a quarter (26%) said this has prevented them from adopting AI. 

The report also found that regulatory uncertainty and Europe’s ongoing digital skills gap hinder businesses from fully utilising technology, despite its potential social and economic benefits.

21% of European businesses viewed compliance and legal uncertainties as major obstacles to adopting digital technology, increasing to 45% among those using multiple AI technologies. 

Businesses that cited these concerns intend to invest 48% less in technologies over the next three years compared to those without such barriers. AWS said addressing these skill and regulatory challenges is crucial for fostering AI innovation in Europe. 

Managing Director of AWS Europe, Middle East, and Africa, Tanuja Randery, said Europe stands on the brink of an unprecedented opportunity. Businesses recognised the benefits of AI to their growth and productivity. 

“SMEs account for more than half of Europe’s GDP, and confronting the challenges holding back their digital journey is vital. To achieve AI’s full potential, it is imperative that Europe delivers the digital skills support and regulatory certainty to support the ambitions of businesses of all shapes and sizes,” said Randery. 

Amazon said it believes AI should respect human rights and values like privacy, fairness, and equity.

“We are committed to building fair and accurate services, not technology for its own sake. We know that only by pairing innovation with responsibility can we build the trust necessary to harness AI for the greater good,” said Randery.

In October, Google DeepMind, Anthropic, OpenAI, Microsoft, Amazon, and Meta published artificial intelligence (AI) safety policy updates. The technology companies hope to boost transparency and encourage the sharing of best practices within the AI community. 

The updates outlined best practices for AI companies, including establishing responsible capability scaling. This is a new framework for managing frontier AI risks. Several companies have already implemented frameworks to tackle these risks. 

AI Creates More Opportunities Than Risks in Europe

Despite concerns about skills gaps and regulations among businesses, the report found half of Europeans believe AI will generate more opportunities than risks for job security and the future of work.

A total of 65% of Europeans anticipated AI will transform healthcare and education over the next five years. Over half (52%) also believe AI will be important in addressing major societal challenges, such as climate change and disease control.

AWS said cloud technology forms the foundation for the adoption of digital AI technology. A total of 53% of European businesses acknowledge that cloud computing has gained significance since 2022, with 80% considering it essential or important. AWS said sustaining this trend could help the EU achieve its goal of having 75% of businesses utilising cloud technology by 2030.

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Written by Tue 6 Feb 2024

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