How AI can help Europe close the productivity gap

Executives mingling to discuss ways to close the productivity gap

Organisations have entered a world where creativity and productivity are amplified by intelligent systems that can generate ideas, content, and solutions at lightning speed. What was once science fiction is now a reality, with the transformative power of generative AI.

When I talk to leaders looking to harness this technology, they’re not just optimising processes, but also revolutionising innovation, enhancing customer experiences, and reshaping the future of work in ways we’re only beginning to explore.

We’ve passed the hype stage. Some organisations I’ve met with are already moving confidently into a new wave of maturity in AI adoption. Globally, more than 80% of business leaders plan to increase their AI spending next year, according to the Enterprise AI Maturity Index by ServiceNow and Oxford Economics.

Most companies in Europe, however, are still at the start of their AI-powered business transformation journeys. To drive better understanding of this AI revolution—and what frontrunners in this space are doing differently—I joined more than 40 business leaders at ServiceNow’s Executive Circle in Berlin. Here are some of the key themes discussed.

The competitiveness challenge in context

With slowing growth across the EU, there’s a widening productivity gap between the EU and the US. A key driver of that is digital technology. One example is the number of newly funded AI companies in each region. Stanford University's AI Index Report indicates that between 2013 and 2023, the US had 897, compared with 368 in UK and Europe.

Closing the productivity gap with the US is a top EU priority that will be vital to create long-term economic growth and raise living standards. IDC forecasts that by 2030, the total economic impact of AI will be $5 trillion in Europe, Middle East and Africa alone.¹ The success with which European companies adopt AI has a central role to play here.

AI adoption in the spotlight

Our Enterprise AI Maturity Index 2024 found that just 5% of European AI adopters apply these technologies organisation-wide. That compares to 8% in the US that have already broken free from the ‘proof-of-concept jail’ and are deploying AI solutions at scale.

US firms are also generally more advanced in using AI technologies. They have a 12% higher adoption rate of big data architecture and advanced machine learning techniques than their European counterparts.

Crucially, US companies are more willing to integrate AI into their operations: 22% of them use AI technologies at 75% of their potential, compared to just 17% in Europe. The US also boasts a more robust AI ecosystem, with greater investment in research and development, a deeper pool of AI talent, and a more favourable regulatory environment.

What Pacesetters do differently

Leaders at our Executive Circle event heard lessons from some of the ‘Pacesetters’ in AI adoption—companies that are already tapping into the power of enterprise AI—and discovered what they’re doing differently. This elite group of organisations shares four characteristics:

They’re guided by visionary leaders, with C-suite engagement in AI adoption, a shared vision for transformation, and a rigorous, by-the-numbers approach to track progress to value.
They’re leveraging AI at scale. Pacesetters use AI to drive insights and productivity enterprise-wide. They’re developing new ways of working for the AI era. And they’re embracing platforms. Leaders are much more likely to adopt a platform approach with built-in AI capabilities.
They focus on equipping their people with the skills they need to excel in AI implementation. They prioritise hiring and upskilling to fill the talent gap. And they recognise the importance of uplevelling. These companies are much more likely to have implemented AI training and support programmes and identified internal AI champions.
They innovate responsibly. These organisations are careful to implement guardrails and governance for AI safety. They attach high importance to understanding, organising, and securing their data. And they continuously build trust by acknowledging employee concerns over AI usage.

Thinking bigger

I’ll leave you with the top takeaways from the Executive Circle event that really resonated with me:

Leaders in AI adoption set themselves apart by reimagining how siloed teams and functions can solve problems differently, as well as by rethinking knowledge and access to information.
They give careful consideration to who owns these new ways of thinking. Some of them are creating new chief AI officer roles. And they’ve all ensured their technologists can collaborate closely with the business to explore the art of the possible.
They understand and have recognised the challenges around organising a technology function for an AI-first world. Often, that means acknowledging the need for a ‘dual mode’: one branch focused on transformational, deep organisational change and the other on ‘keeping the AI lights on’—managing and getting value from AI every day.

As leaders at our event showed, the right approach to adoption can position Europe as a global AI leader. The time to get started is now.

Find out how how ServiceNow helps organisations put AI to work.

¹ IDC Market Presentation, "The Global Impact of Artificial Intelligence on the Economy and Jobs: AI will Steer 3.5% of GDP in 2030", August 2024, Doc# US51057924