There are many very successful companies in Europe, but compared to their American counterparts, they grow more slowly, generate lower profits and invest less in research and development. The technological gap could therefore mean €2 trillion to €4 trillion less in the added value generated by European businesses by 2040.
Technologies such as artificial intelligence or cloud computing, which are increasingly common in many industries, determine the competitiveness and dynamics of business development. In the meantime, as the latest report from the McKinsey Global Institute (MGI) entitled “Securing Europe’s Future Beyond Energy: Closing the Business and Technology Gap”, Europe can claim to be a leader in only two of the ten most efficient technologies. According to the authors, if Europe fails to catch up with the leaders in these technologies, it could lose its position in the future also in traditional industries, which have so far been a strong point of the region. An example is the automotive industry in which Europe is a leader, but without the development of AI technology, it will not be able to dynamically develop the production of autonomous vehicles. This slowly developing crisis can threaten Europe on many fronts, such as economic growth, inclusion and sustainable development, as well as its strategic autonomy and position on the international stage.
Investment in the development of new technologies is also of great importance in Poland. According to our 2018 research, with the full use of digitalization potential, Poland’s GDP could increase to PLN 275 billion by 2025. comments Tomasz Marciniak, managing partner of McKinsey & Company in Poland. – Recently, we also had the occasion to estimate that fuller use of cloud technologies alone in Polish companies and public institutions could bring an additional PLN 121 billion to the economy in 2030. This is even 4% of the country’s current GDP. We have a solid basis for this, and the development of digital technologies would allow Poland to increase its competitiveness in world markets – he adds.
According to a McKinsey Global Institute report, between 2014 and 2019, large European companies grew 40% slower than their American counterparts, investing 8% less and spending 40% less on research and development than American companies. It should be noted that the ICT and pharmaceutical sectors accounted for 80% of the investment gap, 60% of the growth gap and 75% of the R&D expenditure gap. The current situation makes it necessary to take measures to tackle deficiencies in business efficiency or in the field of innovation, which are essential for strengthening competitiveness. And the stakes are high.
It is estimated that by 2040, €2-4 trillion of added value generated today by European businesses will be at risk. This equates to no less than 70% of Europe’s projected GDP growth over this period, six times the gross amount Europe needs to finance zero emissions by 2050, or around 90% of continent’s total current social expenditure.
The MGI report also proposes 11 initiatives that could be part of an integrated package, helping European companies to scale up their activities and attract more financing, enabling faster and more agile operations and an equalization of opportunities compared to more regions. technological advancements. – During the talks With corporate CEOs, we see tremendous enthusiasm and commitment to building Europe’s future, but also growing concern that in some areas of technology that will shape entire industries and societies in the decades to come , we have a lot of catching up to do. Stronger support for innovation will be needed if companies are to operate at the scale and pace needed to compete in a world where new technologies are rapidly becoming ubiquitous. – notes Tomasz Marciniak. The response to the invasion of Ukraine so far shows that Europe is able to use its scale and act quickly in the face of a major challenge. A similar approach will be needed to tackle the technology crisis and build a competitive Europe in the years to come.