The study on “Critical industrial applications of AI for SMEs” is now published, consisting of three reports:

• Report on market analysis of the most critical AI applications and the conditions for AI rollout
• Report on foresight scenarios
• Report on current policy measures and policy opportunities

Key findings:

In the past few years, artificial intelligence (AI) has not only moved to the top of the agenda for businesses, but also for policymakers, academic research institutions and the broader public. AI is expected to benefit governments, citizens and businesses, including fighting Covid-19, enabling resilience and improving green, sustainable growth. At the same time, AI has the potential to disrupt existing business models, possibly displacing business models and impacting the way people live and work.

Small and medium enterprises (SMEs) struggle more than large companies to keep up with the pace of digital transformation and industrial transition in general and face specific challenges that could hamper wide AI adoption and thus reduce overall economic benefits for the European economy. In this context, the European Commission, DG GROW, launched a study to explore the most critical AI applications with a view to accelerate the deployment and adoption by SMEs within strategic value chains in Europe.

The study advocates that while AI’s incremental GDP impact is initially moderate (up to 1.8 per cent of additional cumulative GDP growth by 2025), there is a significant potential in the longer term (up to 13.5 per cent of cumulative GDP growth by 2030), with disparities between regions and different industries. However, the potential of AI will fully materialise if European businesses, and in particular SMEs, are properly supported in their AI transition and grasp the competitive advantages it can provide.

AI is likely to have the largest economic impact on:

•          Manufacturing and the Industrial Internet of Things – IIoT, with overall AI impact potential in Europe of up to €200 billion by 2030

•          Mobility, with AI impact potential of €300 billion

•          Smart health, with AI impact potential of €105 billion

Foresight analysis of the effects of AI and automation technologies on the European labour market, demonstrates significant effects in at least four ways: (1) labour substitution (with capital) is likely to displace parts of the workforce, (2) investment in AI and AI-enabled product and service innovation may create new direct jobs, (3) wealth creation may create positive spillover effects for the economy, and (4) AI could enable higher participation in global flows (data and trade), creating additional jobs.

According to the study, while there is already a sound base of existing EU and national policy and initiatives that promote the uptake of advanced technologies, the key success factor is to maintain policy focus on strategic priorities and increase coordination among them. These topics were also debated in the conference, 'A European perspective on Artificial Intelligence: Paving the way for SMEs’ AI adoption in key industrial value chains'.