European companies are most eager to embrace AIbut rank worst in the world in training workers to use it
BCGs Europe chief has a message for European companies: to succeed in AI, invest in training your people, not just in buying or developing AI.
In a recentsurvey of 1,400 executives, the consulting firm found that European companies lead the world in AI ambition: more than 86% of companies see investment in AI as a top 3 priority for 2024, the study found. They really want to do it, Matthias Tauber, BCGs chair for Europe, told me.
But as eager as European companies are to invest in AI, they are poorly training their workers to master the technology. Just one in 20 European companies has trained more than 25% of workers on AI, the percentage required to achieve critical mass, BCG found. That share is the lowest of anywhere in the world.
People really want to do it, Tauber reiterated, but if you look at where we are, we have a way to go. Europe is 60% in terms of AI readiness of the U.S., and half of the Middle East. Where European companies fall short is in getting scale in their employee base in [the] adoption of the tool.
Still, European companies should adopt AI even if they wont ever catch up to their Big Tech rivals in developing the technology.
When you look at automotive, chemical, package goods, luxury[your ability]to drive value for customers, stakeholders, or even your market cap will disproportionally depend on whether youre able to drive AI and generative AI in your business model, Tauber said.
So how can European companies still triumph in this must-win battle? Tauber suggested three things:
First, you need to adopt AI with scale. If you do it with just one use case, forget about it, Tauber said.
Second, itsnot a matter of choosing betweengenerative AI or traditional AI; its the interplay between the two thats key. Its not enough to train your people on gen AI, Tauber said. You also need to address certain aspects of traditional AI.
And third, you need to double down on the nontechnical aspect of AIto promote adoption of the technology, the BCG partner said.Processes must change.Otherwise, your organization doesnt work differently.
It only takes a glance around the news cycle to see how AI is creeping into all kinds of consumer experiencesfor better or worse. Even companies that got a late start have a chance to influence how the evolution progresses.
The numbers are snapshots of today. You can change things, Tauber told me. Its a call for action, to really take this seriously, and move on.
On a related note: Fortune and the UK Government Department of Business & Trade will be holding a dinner discussion on AI: From Hype to Implementation for CEOs and executives attending Mobile World Congress in Barcelona, on February 28. If youd like more info, send me a note:peter.vanham@fortune.com.
More news below.
Peter Vanham
peter.vanham@fortune.com
@petervanham
Apple opens up
Europes Digital Markets Act pushed Apple to do the unthinkable: Open up the iPhone to third-party app stores, which will deny the U.S. company its traditional 30% cut of sales. But Apples changes may not be enough to convince skeptical regulators. Disgruntled developersmost prominently Fortnite developer Epic Gamescomplain that Apple is still abusing its monopoly power by charging extra fees and reserving the right to deny third-party apps it doesnt like. Fortune
Finnish fertility
Finland was hailed at the turn of the century as one of the few developed countries that knew how to sustain high fertility rates, thanks to a generous social safety net. No more. The countrys birth rates is now below the U.K.'s and around the same level as Italy's. Thats worrying Anna Rotkrich, a Finnish demographer who advised former Prime Minister Sanna Marin. Its not primarily driven by economics or family policies. Its something cultural, psychological, biological, cognitive, she says. Financial Times
Frances farmer protests
France has come out against concluding trade negotiations with the Mercosur trade bloc as farmer protests around Paris intensify. Farmers are upset about rising prices, environmental regulations, and proposals to weaken agricultural subsidies. Similar protests are happening across Europe, particularly in Germany and Poland. Reuters
Bernard Arnaults LVMH is stepping into 2024 with confidence after its highest-end products defy luxury slump by Prarthana Prakash
Europe has an AI championthe Dutch semiconductor giant that is the continents most valuable tech firm and just hit a record high by Bloomberg
The grass always seems greener on the other side: Top exec at $50 billion food giant Mars advises prospective job-hoppers how to water the side youre on by Orianna Rosa Royle
Amid U.S. construction boom, worlds largest cement maker will spin off North American business, seek $30B valuation: Two independent champions by Bloomberg
Ryanairs CEO once called Boeings leadership headless chickens. Now he wants to buy the Max jets that U.S. airlines dont by Sasha Rogelberg
Amazon walking away from its $1.7 billion iRobot deal leaves the Roomba maker without its founding CEO and staring down a 31% staff cut by Marco Quiroz-Gutierrez
This edition of CEO Weekly Europe was curated by Nicholas Gordon.
This is the web version of Fortune CEO Weekly Europe, a newsletter on the companies and industry leaders shaping every facet of business in Europe. Sign up for free.
2023 Fortune Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice| Do Not Sell/Share My Personal Information| Ad Choices
FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.
S&P Index data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Terms & Conditions. Powered and implemented by Interactive Data Managed Solutions.
