Table of Contents
- Innovation and Competitiveness
- AI to Improve Efficiency and Productivity
- Measures for Development and Adoption
- The European Future
What does the future hold for European citizens? Former Italian Prime Minister and former ECB President Mario Draghi has attempted to provide an answer in his latest study commissioned by the European Commission. In his report, Draghi outlines some key strategies for the economic future of the old continent, with particular emphasis on the crucial role of investments in the Union’s growth. In this scenario, what role does Artificial Intelligence (AI) play in supporting growth? Let’s explore this topic in this article.
Innovation and Competitiveness
The EU is currently facing challenges in innovation, especially in a competitive environment where digital technologies and AI are poised to become the engines of future growth. Without widespread adoption and further development of these technologies, Europe risks seeing a further decline in productivity, compromising its ability to compete internationally.
This is particularly relevant in sectors where the EU still holds a competitive advantage, such as pharmaceuticals, automotive, and energy. According to the report, AI represents a transformative technology that could revolutionize many of these key sectors.
However, if the EU fails to bridge the gap in AI development, the productivity gap with the United States could widen even further.
The document suggests that Europe has the opportunity to enhance the competitiveness of its industries by integrating AI into existing industrial processes, rather than attempting to compete directly with global superpowers in developing new digital technologies. To this end, Draghi proposes a dual approach:
- Increase investments: The EU needs to intensify its investments in AI research and development, focusing particularly on sectors where it already has strengths, such as robotics.
- Facilitate AI adoption: It is essential to simplify regulations to facilitate AI adoption by European companies and address the skills gap through targeted education and training programs.
AI to Improve Efficiency and Productivity
A particularly promising approach for Europe could be the development of so-called “AI verticals” or the integration of AI into specific industrial sectors to improve efficiency and productivity.
The European Union has a history of underinvestment in research and development compared to the United States, and it tends to favor mature industries at the expense of emerging technologies. This dynamic, often referred to as the “mid-tech trap” has reduced the EU’s competitiveness compared to more advanced economies. Overcoming this trap is now a necessity, but it will require a substantial increase in public investment. According to the report, the EU should double its spending in this area to close the gap.
Another obstacle to competitiveness is the fragmented regulatory environment, which imposes high costs on businesses, particularly small and medium-sized enterprises (SMEs), stifling innovation. The report recommends regulatory simplification, the promotion of cross-border collaboration, and the reduction of the administrative burden to foster business growth.
The shortage of workers with specific skills to develop and apply artificial intelligence is another issue. The report suggests reforms in education and training systems to ensure that workers acquire the skills required by an increasingly AI-driven economy.
Finally, AI should not be seen as a one-size-fits-all solution to Europe’s competitiveness problems but as a key tool to be integrated with other policy reforms, such as completing the single market and creating a more innovation-friendly regulatory framework.
Measures for Development and Adoption
The EU cannot afford to be passive in the face of rapid AI advancements. A series of concrete political actions are needed to make the EU a global leader in this transformative technology. These are some of the suggestions in the report:
- The establishment of a “European Action Plan for Research and Innovation” to improve coordination and increase public spending on AI research.
- The creation of an “AI Vertical Priority Plan” to incentivize collaboration between different sectors in AI development and implementation.
- The expansion of the EU’s supercomputer network to increase access to the computing power necessary to train and manage complex AI models.
- The development of a “federated AI model” leveraging both public and private resources to pool data and AI expertise.
- Negotiating a “transatlantic digital market” to ensure EU companies have access to U.S. cloud technology while promoting EU-based alternatives in strategic areas.
- Facilitating the consolidation of the EU telecommunications sector to stimulate investment in connectivity is essential for the large-scale deployment of AI applications.
In general, the report emphasizes that AI will be crucial for improving European competitiveness in a world where economic power is increasingly tied to technological leadership.
The European Future
The plan presented by Draghi represents a first step towards building a strong and integrated European strategy that not only actively involves national governments but also promotes cooperation between member states and calls for a massive increase in investments. Now it is up to the European Commission to take the next step, leading the Union towards a competitive future, ready to face the challenges posed by global superpowers. Only through coordinated and ambitious action can Europe consolidate its role as a global leader in innovation and technology, ensuring prosperity and sustainable growth for future generations.
Neodata AI Team
As Neodata, we provide data, insight, articles, and news related to AI and Big Data.
