AWS finds AI already adopted at sizeable number of European businesses, resulting in increased revenues, productivity
An insight into the adoption rate of artificial intelligence (AI) within the business community has been offered in a new report from Amazon Web Services (AWS).
AWS announced that its report, ‘Unlocking Europe’s AI Potential in the Digital Decade‘ by Strand Partners, found that a third of European businesses have adopted AI, a 32 percent growth rate since last year.
The report stated that if this 32 percent growth rate was maintained it “could contribute an additional €600 billion in gross value added (GVA) to the European economy by 2030.”
If realised, it would bring the estimated total economic impact of tech adoption in the region to €3.4 trillion by 2030, an increase from last year’s forecast of €2.8 trillion, the report found.
It should be remembered that in 2021 the European Commission had presented its 2030 Digital Decade vision that sought to ensure the bloc was positioned for emerging tech such as AI.
Its commitments included improving citizens’ digital skills; boosting digital infrastructure and the adoption of new technologies in EU businesses; making public services and administration available online.
But achieving this may not be straight forward, after the report found that in order to unlock AI’s full potential, countries across Europe must tackle three critical issues:
- creating a pro-innovation environment;
- addressing Europe’s digital skills gap;
- ensuring businesses of all sizes have access to the latest technologies.
The AWS report noted the clear positive economic impact of AI on European businesses; with three-quarters of firms that use AI reporting increased revenues and productivity as a result.
However, the use of AI and other digital technologies is currently skewed towards larger companies (51 percent vs. 31 percent of small to medium-sized enterprises (SMEs)).
The report found that SMEs are finding significant barriers to AI adoption, namely finding the right talent, regulatory concerns, and the cost of implementation.
“Europe stands on the brink of an unprecedented opportunity,” said Tanuja Randery, MD of AWS Europe, Middle East and Africa (EMEA). “Businesses recognise 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,” said Randery. “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.”
The report found that regulatory uncertainty and skills gap are holding back investment, with a lack of digital skills is the most frequently cited challenge.
Sixty-one per cent of European businesses said a digital skills gap impacts their business performance, while over a quarter (26 percent) said this has prevented them from adopting Al.
The report noted that with the European Commission set to fall eight million people short of its target to have at least 20 million employed as ICT specialists by 2030, addressing the digital skills gap is crucial to the democratisation of AI technology across Europe.
Meanwhile regulatory uncertainty, alongside Europe’s persistent digital skills gap, is preventing businesses from using the technology to its fullest, despite its potential positive social and economic impact, the report found.
It highlighted that 21 percent of European businesses identify compliance and legal uncertainties as a significant barrier to their adoption of digital technology. This rises to 45 percent among businesses that already use multiple AI technologies.
AWS said it has already trained over 800,000 people with digital skills across EMEA as part of its commitment to equipping 29 million people globally with cloud computing skills by 2025.
Despite businesses having skills and regulation concerns, the report found that half of Europeans believe AI will create more opportunities than risks with regard to job security and the future of work.
Furthermore, 65 percent of Europeans anticipate that AI will transform healthcare and education over the next five years, and over half (52 percent) believe that AI will be important in addressing major societal challenges, such as climate change and disease control.
The report also found that over half (53 percent) of European businesses say that cloud computing has become more important to their business since 2022, while 80 percent say it is currently essential or important.
If this appetite can be maintained, the EU could meet its target of 75 percent of businesses using cloud technology by 2030, the report stated.
In September 2023 a report from tech research firm Slalom had found 84 percent of businesses in the UK and Ireland had already begun using AI in some capacity.