The European Union's attempts to catch up with the main two superpowers in artificial intelligence and blockchain that are China and the United States look set to be prevented by an investment shortfall of as much as 10 billion euros - $12 billion – every year. This is according to the European Investment Bank (EIB) as revealed on June 1st.
The EIB, which is the EU's lending arm, says while the United States and China together account for more than 80% of the 25 billion euros of annual equity investments in both technologies, the EU’s 27 countries combined contributed just 1.75 billion euros - or 7% of the total.
It cites the importance of both Artificial Intelligence and Blockchain and both their potential to reinvent the sectors hit hard by the COVID-19 pandemic, such as financial services, healthcare and business intelligence, in order to boost the bloc's economic resilience and recovery.
'Governments in Europe are substantially underinvesting in AI'
The bank said in a report that companies and governments in Europe are substantially underinvesting in Artificial Intelligence and Blockchain in comparison to other leading regions and that it has become clear that the European Union struggles to translate its scientific excellence into business application and economic success.
It also estimates an annual investment gap of between five and 10 billion euros in both of these technologies.
The EIB adds that its access to finance may become more challenging in the short run, as a result of market conditions, which could potentially widen the investment gap further. According to the EIB, the EU and its member states’ support schemes could plug part of the gap, but also that private markets will clearly need to contribute the balance.
There are several factors indicated for the EU's investment shortfall, among them are European funds' limited appetite due to high upfront investment needs, a lack of knowledge and the limited specialisation of EU venture capital funds in both Artificial Intelligence, as well as Blockchain.