Europe must tread carefully to avoid falling out of the AI ‘arms race’

For Nikolas Kairinos, AI is the key to productivity and the EU can’t afford to fall behind. 

To the casual observer, it might appear that technological progress is taking place steadily across the globe. However, under the surface, the competition to achieve dominance in this sphere is intensifying.

In particular, countries are battling for position at the forefront of the wave of tech innovation: artificial intelligence (AI). Amongst other things, AI holds the promise of economic might, competitiveness and an unparalleled ability to solve pressing national concerns.

There is an AI arms race, with the United States and China leading the way. Both nations have laid out ambitious plans in recent years to bolster their AI prowess; in 2019, the US launched a national AI strategy – the American AI Initiative – which orders funds, programmes and data to be directed towards the research and commercialisation of the technology.

Meanwhile, China recently laid out a roadmap to become the world leader in AI by the end of the current decade.

Government involvement in these efforts is paying off. The US has attracted more than half (56%) of global AI investment since 2015, with China in second place. So where does Europe stand?

Where is Europe going wrong?

Before we rush to criticise Europe’s approach, let’s not forget that it remains a strong contender in this race. Access to homegrown talent and an inspiring entrepreneurial spirit inspires hope that it will one day catch up to, or even overtake, its competitors.

The world of AI remains largely unexplored, and we must give developers the freedom they need to experiment with novel applications

Indeed, according to McKinsey, Europe is home to approximately 25% of the world’s AI startups, largely in line with its size in the world economy.

That said, while the EU has begun to take note of AI’s disruptive potential, it still lags behind when it comes to regulation, R&D and innovation. While its rivals have set out blueprints to achieve superiority in the field, European innovators are becoming increasingly burdened by red tape.

In 2019, for instance, the European Commission announced a pilot of ethical AI guidelines which offer a loose framework for the development and use of AI. The guidelines list seven key requirements that AI systems must meet in to be trustworthy; amongst the chief considerations are transparency and accountability.

Meanwhile, a European Commission white paper has recently recommended a risk-based approach to ensure regulatory intervention in this sphere is proportionate.

Both initiatives should be praised for their efforts to proactively raise the standards for AI development. However, they are also deserving of serious scrutiny. Setting out a list of benchmarks that researchers and developers must meet as they create and refine new technologies risks impeding their progress.

The world of AI remains largely unexplored, and we must give developers the freedom they need to experiment with novel applications. The risk-based approach is not without its faults, too, and would only serve to deter or delay investment if AI products and services fall under the loose definition of being too ‘high-risk’.  


Any attempt to regulate AI on a general level seems misguided; indeed, AI comes in many forms, and the risks and considerations are very different in different domains.

What’s more, the economic and human cost of over-regulation could be high: restrictions on R&D will slow the introduction of technologies that could help us educate entire generations, better detect cancers, reduce the risk of vehicle collisions, and protect people’s money, to name but a few.

While not without its own problems, we cannot deny that looser regulations could well give AI companies outside of the EU an advantage of this in the bloc, leaving them freer to put new solutions to work. That is not to say that we should do away with regulation altogether. Rather, we must be careful to avoid applying too broad a brush, and instead aim to meet the needs of both developers and the public.

The risk of ignoring AI solutions

At this point you might ask yourself: why does the AI competition matter, and is ‘winning’ the race worth the investment? By way of a simple response – yes. Most importantly, dominance in this field will translate into significant economic value.

McKinsey estimates that on average, AI could boost European economic activity by close to 20% by 2030. In real terms, this would add €2.7Tn to its combined output. However, if Europe bolsters its efforts and makes strides to sufficiently catch up with the US AI frontier, McKinsey estimates that a total potential boost of €3.6Tn by 2030 is on the cards.

Beyond monetary advantages, however, applications of AI for societal good are becoming difficult to ignore. Workers across all sectors are already reaping the benefits of intelligent machines that free up countless hours which would otherwise be spent on repetitive and data-intensive tasks. 

As well as improving efficiency and reducing costs, AI frees up time for employees to divert attention to more rewarding and creative tasks.

The public sector also stands to benefit massively from greater use of AI. The technology promises to improve the quality of services offered, with organisations such as the National Health Service (NHS) already exploring how it could raise standards of public health.

Not only will valuable new solutions reduce the burden on the system by taking on responsibilities that currently consume needlessly large amounts of employees’ time, but they will also improve patient outcomes and allow clinicians to focus on parts of the job where they can add the most value.

AI technologies are transformative, and those who fail to invest in new solutions risk losing out on the multitude of benefits on offer. I hold out hope that Europe will catch up to its competitors; however, if its ambitions are to be realised, a unified approach is essential.

I hope to see governments, businesses and organisations working together to continue to push forward the AI frontier and pursue innovative applications that will transform the lives of their citizens.


About the author

Nikolas Kairinos is founder and CEO of Soffos



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