European companies could gain $3 trillion by closing tech gap

12 July 2023 Consultancy.uk 4 min. read

North American companies have been quick to adopt new technologies such as generative AI, and believe they are already reaping the rewards. A new report suggests that if European companies can close the widening technology gap with their North American counterparts, they could enjoy a $3 trillion boost in revenues.

The promises of the current generation of technology labelled artificial intelligence (AI) are at this point well-known to anyone who isn’t living under a rock. By combining computer science and datasets, to enable machines to execute problem-solving, business executives are leaping aboard a hype-train that promises an endless supply of quick content, without needing to pay people for its production.

Generative AI is something a growing number of global businesses are excitedly exploring – but the early adoption rate is highest in North America. There, a unique cultural heritage of proud technological risk taking, and habitual repression of working conditions and salaries, means 22% of North American firms have already rushed to fill out their boards with members who boast expertise in new technology such as AI. In comparison, only 14% of European firms have done so.

European companies could gain $3 trillion by closing tech gap

Amid a tight talent market, where many skilled workers have been withdrawing from roles thanks to pay offers they feel undervalue their skills, many European organisations remain wary of hiring at present – especially at board level. According to a new study from Accenture, though, firms willing to invest in board room knowhow when it comes to key technologies like generative AI could be missing out on its true potential. If they were to close the gap with their counterparts on the other side of the Atlantic, both in board room recruitment and transformation investment, they could win additional revenues of an extra $3.2 trillion.

The study found that companies which were not fully committed to tech-driven reinvention of their business stood to make significant losses in revenue, though. In 2023 alone, the gap between US and European technology proficiency would see businesses across the continent lose out on $1.5 trillion over the course of the year to US competitors. Meanwhile, if US firms push on with an early advantage to widen the gap in 2024, that could rise to $1.7 trillion next year.

European firms are acutely aware of this risk, Accenture found. Speaking to business leaders across the continent, Accenture found that digital innovation was seen as essential to Europe's competitiveness in a number of fronts, including its perceived role as a leader in sustainability. Due to this, nearly 19% of European leaders said they felt the need to accelerate technology adoption – ahead of versus 16% of respondents in the US and 8 % in APAC.

European companies could gain $3 trillion by closing tech gap

War for talent

When it comes to putting those intentions into action, sourcing the right talent will be crucial in the coming months. To that end, Accenture found that companies in the Netherlands, Ireland and the UK had currently accrued the most technology experience at board level. The Netherlands had the most at 19.1%, narrowly ahead of Ireland and the UK on 18.9% and 18.8% respectively.

Even so, 33% of European companies still don’t have any board members with technology experience at all. This is almost two times the number of such companies in North America, where just 19% of board have no technology experience. In particular, European firms are lacking in this kind of knowledge for their top job – with just 11% of European CEOs having technology experience, compared to 17% in North America. This presents a major opportunity, though, and boosting those numbers could supercharge their transformation efforts going forward.

Jean-Marc Ollagnier, CEO of Accenture for Europe, commented, “Boards and CEOs used to think business strategy first, and how technology could support it second. Now it is vital they integrate technology from the very beginning when developing new products, services or business models... Take the application of generative AI, for instance. The key question for leadership is how they integrate this technology to drive efficiency and growth, responsibly – having the right expertise at the very top level is critical. Improving the “technology quotient” in boardrooms and in the C-suite is key to help companies make informed decisions about how technology can propel the organization forward.”