AI opportunities abound for European companies, but they have some ground to make up on their US counterparts. Western European companies in 2022 spent less on AI and IT than their US counterparts across nearly all sectors, from consumer goods to construction, senior partner Alexander Sukharevsky and coauthors explain. Overall, US companies outspent Western European companies by 45 to 70 percent, a disparity that could erode European competitiveness over time.
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A series of dumbbell charts compare AI external-spending data and IT internal-spending data in Western Europe and the United States across various sectors in 2022 using 2 metrics: spending as a share of sales (measured in percent) for sectors of similar size and absolute spending (measured in billions of dollars) for sectors of differing size.
The United States leads in every sector measured in the similar-size segment for both AI and IT spending: construction and real estate, chemicals and materials, advanced manufacturing, insurance, energy and utilities, telecommunications, transportation, agriculture, and professional services.
In the segment on sectors of differing size, the United States leads in IT spending in each of these sectors: consumer goods and retail, banking and capital markets, healthcare and pharma, high tech and software, and media and entertainment. The United States also leads in AI spending in all these sectors, except for high tech and software, where Western Europe spends more.
Notes: IT spending is used as a proxy for AI internal spending. Western Europe includes Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom.
Source: Worldwide AI and Generative AI Spending Guide, IDC, February 2024; McKinsey analysis.
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To read the article, see “Time to place our bets: Europe’s AI opportunity,” October 1, 2024.