The European Investment Bank (EIB) said European Union will face an investment shortfall of as much as 10 billion euros ($12 billion) annually in artificial intelligence (AI) and blockchain technologies.
A report from EIB said the United States and China together account for more than 80 percent of the 25 billion euros of annual equity investments in both technologies. The 27-country bloc contributed just 1.75 billion euros or 7 percent of the total.
The EIB , the EU’s lending arm, cited the importance of both technologies and their potential to reinvent sectors hit hard by the COVID-19 pandemic, such as financial services, healthcare and business intelligence, and boost the bloc’s economic resilience.
Companies and governments in Europe are underinvesting in AI and blockchain compared to other leading regions and it has become clear that the European Union struggles to translate its scientific excellence into business application and economic success, EBI said in a report.
EIB estimated an annual investment gap of between 5 and 10 billion euros in both technologies.
EIB said access to finance may become more challenging in the short run as a result of market conditions, potentially widening the investment gap.
EU and member state support schemes could plug part of the gap, but private markets will clearly need to contribute the balance, EIB said.
IEB cited several factors for the EU’s investment shortfall, among them European funds’ limited appetite due to high upfront investment needs, lack of knowledge and the limited specialization of EU venture capital funds in both technologies.
The study shows that the highest number of small and medium-sized enterprises (SMEs) involved in artificial intelligence and blockchain can be found in the United States (2,995), followed by China (1,418) and the EU27 (1,232).
The United Kingdom is another notable player (495). Within the EU27, the highest number of companies is located in Germany and Austria, followed by southern Europe, France and central, eastern and south-eastern Europe (EU13).
