To reap the benefits of artificial intelligence (AI), the EU needs to change its regulatory approach, invest in research and development (R&D), infrastructure, and skills, writes Matt Brittin.
Matt Brittin is the president of the EMEA region at Google.
According to Mario Draghi’s new report, Europe’s competitiveness has nosedived over the past decades: the EU’s share of global GDP has shrunk to just 17%, and US productivity surpassed the EU’s by 20% in 2022.
Europe’s productivity gap is largely due to slower technological development, innovation, and adoption. As Draghi says, “With the world on the cusp of an AI revolution, Europe cannot afford to remain stuck in the middle technologies and industries of the previous century.” To catch up, the EU must unlock its innovative potential.
It’s not that Europe lacks talent or innovative capacity – it doesn’t. In our experience, European businesses struggle under the weight of European compliance and regulation.
AI can bring economic, social, and sustainability benefits on a scale we’ve not seen before. Google-commissioned research with Public First shows that generative AI alone could add €1.2 trillion to the European economy, while 59% of Europeans agree that AI will benefit society.
In many ways, Europe is well-positioned to seize this moment. It has a well-educated workforce and a single market, which could help new innovation scale and benefit everyone rapidly.
However, the EU must adapt its approach to AI to power competitiveness. The Draghi report is clear about what is holding back Europe’s adoption of technology: inconsistent and restrictive regulations and a need for further funding and coordination across R&D, infrastructure, and skills.
First, Draghi is right that the EU’s regulatory-first approach is holding Europe back—it is putting off investors, inhibiting innovation, and limiting the transformative impact of technological innovation.
Critics will argue that AI comes with risks and needs to be regulated, and they are right. But the biggest risk for Europe is not misuse of AI, misinformation, or mistakes – it’s missing out on the opportunity.
Since 2019, the EU has introduced over 100 pieces of legislation impacting the digital economy and society. The challenge is not just the sheer number of regulations—it’s the complexity. Regulations are one-contacting, untested, and inconsistently implemented. The explosion of rules makes it challenging for businesses and entrepreneurs to develop, launch, or even use new digital products.
For international investors, the regulatory burden is a minefield that deters the launch of new digital tools for European businesses and consumers. Over 60% of large companies and SMEs have identified regulation as a key obstacle to investment.
The second key area of focus must be investing in research and development. The US spends more than twice as much as the EU on AI R&D. For the EU to truly compete in AI, it must make research and development a shared priority and make funding more accessible. Without the right incentives to develop and commercialise AI innovation, Europe wastes its talent and chances of launching more home-grown tech unicorns.
Thirdly, infrastructure. AI breakthroughs are only possible with the right high-performance computing technologies and data centres – and renewable energy to support them. To enable AI innovation at scale, the EU must allocate more funding to infrastructure and incentivise and facilitate the private sector to do the same.
Finally, a strong focus on skills is essential. Technological growth will not be effective if people are left behind. Given its diversity, the EU must ensure that technology benefits every business, economy, and person. To do this, digital skills transformation needs to be accelerated, putting AI skills and education at the centre of a revitalised European Skills Agenda and adding it to school curriculums.
For governments embarking on this journey, working hand in hand with the private sector will be key.
The new EU mandate starts at a critical moment, with complex geopolitical challenges that can be met only if Europe boosts its competitiveness and productivity. The following agenda needs to rise to that challenge: grasping the AI opportunity to make Europe a land for investment and opportunity.
