Five recommendations for the European Union to take advantage of its AI potential

The European Union has made substantial progress in terms of regulatory support of artificial intelligence with the approval of the Artificial Intelligence Act in March 2024. In addition, throughout 2025 it plans to launch seven AI Factories in Spain (to be housed at the Barcelona Supercomputing Center), Finland, Germany, Greece, Italy, Luxembourg and Sweden to develop and test innovative AI models and applications and foster collaboration among countries.

However, a report by the consulting firm McKinsey & Company stresses that it is critical that the region implement measures to reorient the workforce, attract talent and reinforce energy infrastructure so it can unleash its full potential in the field of AI.

This momentum will also help to raise productivity in Europe by up to three percent annually by 2030, according to McKinsey. The document notes that this growth will be critical to finance the European model, and to overcome key challenges, such as the energy transition, reducing the development gap among countries and supporting an aging population.

Furthermore, according to the report, European Union organizations lag behind the United States by 45 to 70 percent. This disparity stems from various factors, such as regulatory obstacles, and lower private financing. On the other hand, it also indicates that the EU has a market share below five percent in critical areas for AI development, such as access to raw materials, semiconductor design and cloud services.

This scenario limits competitiveness in the European Union in the artificial intelligence ecosystem. However, given that the economic development of generative AI remains in the early stages, Europe has an opportunity to follow several strategies to regain ground and accelerate its adoption in the region.

Reorienting the worforce

The EU is facing transformation in labor demand driven by artificial intelligence and automation, as well as trends such as the transition to net zero emissions, demographic aging, and the rise of ecommerce. Specifically, demand for professionals in areas such as health and STEM disciplines (science, technology, engineering and mathematics) is expected to grow between 17 to 30 percent during the 2022-2030 period.

The report recommends guiding students and workers toward programs that prepare them for high demand jobs. In addition, it suggests building alliances between universities and companies to offer training that prepares them for the future.

Attracting and retaining artificial intelligence talent

In addition to training its citizens, the EU should position itself as an attractive destination for those looking to lead transformative artificial intelligence projects. In fact, the region has more AI professionals than the United States (120,000 compared to 112,000 in 2023). However, although 22 percent of the top AI researchers were trained in the European Union, just 14 percent continue working on the continent.

To overcome this challenge,the report suggests offering fiscal incentives to researchers and companies, as well as facilitating access to financing to boost the competitiveness of European companies.

Increase investment

Another important point is the significant disparity between the United States and European Union in terms of private investment in artificial intelligence. In 2023, investments in the U.S. totaled $67 billion (approximately €61 million), while in Europe they amounted to $11 billion (approximately €10 billion).

One of the proposed solutions is to increase investment and allocate funds to encourage the use of artificial intelligence in key sectors, such as diagnostics and treatment in the healthcare field.

Improve energy infrastructure

As dependence on digital services rises, requiring greater processing capacities, so does the importance of energy resources. McKinsey estimates that the energy requirements of EU data centers could reach 180 terawatt hours by 2030, which would represent over five percent of the total annual electricity consumption in 2023.

This rising demand for energy would put additional pressure on a network that is currently facing the challenge of being the most dated in the world, as the report indicates. However, the European Union can take advantage of its advantage in clean energy, as 61 percent of its energy comes from low-emission sources, compared to 40 percent in the U.S. and 34 percent in China.

Facilitate a clear and accessible regulatory environment

The AI Act represents a major step forward in the European regulatory framework, but challenges remain. 70 percent of companies consulted feel that the regulatory requirements are confusing, something that has a negative impact on technological development. This uncertainty has palpable consequences, as was the case with Meta. The company suspended the launch of its multimodal AI models in the European Union due to the "unpredictable nature of the European regulatory environment.” According to the McKinsey report, a possible solution for this conflict would be to create a clear, accessible and flexible regulatory environment that makes it easier for companies to comply with the regulatory requirements in an agile manner.

The EU faces major challenges in the artificial intelligence field. As with any new technology, its adoption requires social and business transformations to harness its full potential. But apart from a challenge, artificial intelligence also poses a key opportunity for the European Union to position itself as one of the leading regions in this technological revolution.