In Brief: European companies are making progress in AI readiness, with large firms closing the gap with North American counterparts, but a significant divide between large and smaller European businesses could hinder the region’s overall competitiveness, according to Accenture’s inaugural AI Progress Barometer.
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AI Progress in Europe Driven by Large Companies as Smaller Firms Lag – Image Credit Unsplash+
AI Readiness Progress in Europe and North America
The inaugural Accenture AI Progress Barometer reports that Europe’s largest companies are showing early signs of narrowing the AI readiness gap with North America. Over the past six months, European companies improved their AI readiness scores by 1.6 points, compared to a 1.1-point improvement among North American firms. Despite this progress, North American companies still maintain a higher average AI readiness score, with 48.9 out of 100, compared to 43.1 for European companies.
AI readiness is defined as the set of capabilities organizations need to derive value from AI, including access to high-quality data, a skilled workforce, and appropriate processes.
Widening Divide Between Large and Small European Firms
The Barometer highlights a growing disparity within Europe itself. The largest European companies, those with annual revenues above $10 billion, now rank just 2.1 points behind their North American peers (47.4 versus 49.5). However, smaller European companies lag comparable North American firms by 7.6 points (40.5 versus 48.1). This pronounced gap suggests that smaller European businesses are struggling to keep pace, which could impact Europe’s future competitiveness in AI-led productivity and growth.
This internal divide is more significant in Europe than in North America, raising concerns that smaller companies may miss out on opportunities unless they increase investment in AI capabilities.
Country and Sector Variations
The pace of AI readiness improvement varies across European countries and sectors. Companies in France (+5 to 43.1), the United Kingdom (+4.8 to 44.5), and Spain (+4.6 to 39.9) recorded the largest improvements. Among industries, ten of the eighteen tracked showed overall improvement. The insurance sector led with an 8-point increase to 48.6, followed by travel (+5.7 to 46.7) and consumer goods (+5.2 to 43.7). Insurance companies, in particular, have made significant progress in transforming processes and modernizing data foundations.
Factors Influencing AI Readiness
Accenture’s analysis indicates that large European companies are driving AI momentum. These organizations are focusing on enterprise-wide reinvention, which involves rethinking operating models, redesigning workflows, strengthening data and technology foundations, and ensuring leadership engagement and governance. According to Accenture, the speed of execution will be critical for Europe’s future competitiveness.
The shift from AI experimentation to execution at scale is evident in sectors like insurance, where companies are automating straightforward claims while reserving complex cases for human experts. This approach requires clean, integrated data and a properly trained workforce.
About the AI Progress Barometer
The AI Progress Barometer tracks the AI readiness of approximately 3,000 of the world’s largest companies, measuring progress every six months. Scores are aggregated by region and industry, allowing for benchmarking against global peers. The Barometer assesses organizations across four pillars: strategic direction, technology foundation, people and skills, and process reinvention.
Data for the Barometer comes from Accenture’s AI Index, which evaluates companies’ abilities to scale with AI, and the Pulse of Change, a CXO survey conducted three times a year.
Conclusion
While European companies, especially large ones, are making notable progress in AI readiness, the widening gap between large and smaller firms poses a challenge. Addressing this divide will be important for ensuring that Europe remains competitive in the global AI landscape.