New research from Accenture finds that European companies could generate up to US$3.2tn in additional revenue by 2024 if they were to close the technology deficit against their North American counterparts.
According to Accenture’s “Innovate or Fade” report, the projected additional revenue for European corporations represents an increase of up to 12% of revenues in 2023 and of up to 13% of revenues in 2024.
Report finds boards in Europe lacking in experience in technology
The report, which includes an analysis of technology experience in boardrooms of nearly 2,000 of the largest companies in the world, found that just 14.4% of board members of the European companies analysed have technology experience, compared to 21.6% for North American companies.
Companies in the Netherlands, Ireland and the UK have the most technology experience (19.1%, 18.9% and 18.8% respectively), the research found, while Norway (6.2%), Austria (6.1%) and Portugal (4.5%) suffer the lowest technology experience in boardrooms.
Furthermore, one-third (33%) of European companies said they don’t have any board members with technology experience at all, compared to only 19% of companies in North America.
Jean-Marc Ollagnier, CEO of Accenture for Europe, said: “Boards and CEOs used to think business strategy first, and how technology could support it second. Now it is vital they integrate technology from the very beginning when developing new products, services or business models, or companies risk losing out on billions of additional revenue.
“Take the application of generative AI, for instance. The key question for leadership is how they integrate this technology to drive efficiency and growth, responsibly – having the right expertise at the very top level is critical. Improving the “technology quotient” in boardrooms and in the C-suite is key to help companies make informed decisions about how technology can propel the organisation forward.
“Mastering technologies such as AI, next-generation networks, edge computing and digital twins, will also be critical to the industrial reinvention, which many governments across Europe are fostering.”
Accelerating R&D to build future growth
According to the report, European companies allocate less of their revenues to R&D investments compared to North American and APAC companies.
European companies are also less likely to file AI-related patents compared to their NA and Asian peers. Accenture found that only 60% of European companies have filed patents relating to AI, compared to 77% of companies in NA and 89% of companies in Asia Pacific (APAC). Even less (34%) have filed patents in generative AI, compared to 60% in NA and 73% in APAC.
“Technology R&D investments are crucial to build future growth, through new products and services and new business models,” Ollagnier adds. “For instance, to implement circular models, companies can look at how technologies such as blockchain can ensure the traceability of components and improving the transparency of the recycling process to help provide the trust that consumers expect to foster product reuse.
“Technology can also play a critical role in accelerating R&D. Cloud, AI and Quantum can help accelerate drug discovery in pharmaceuticals and create more sustainable materials in chemicals. It is less the absolute amount that is invested in R&D that matters, but the portion of revenue allocated and most importantly how it is used.”