The latest report from the McKinsey Global Institute points out that generative artificial intelligence will contribute up to US$575 billion in value to the European economy in the next five years. The report provides an in-depth analysis of the full value chain of European artificial intelligence and predicts that generative artificial intelligence will significantly improve European productivity. The report also highlights the relative lag in the adoption of this technology by European companies and points out the need to accelerate the pace to fully unleash its potential, which is crucial for the European economy as labor productivity is increasingly slowing down.
Generative AI is bringing huge opportunities to the European economy, with this technology expected to add up to $575 billion in value to the European economy over the next five years. This data comes from the latest report of the McKinsey Global Institute, which provides an in-depth analysis of Europe’s entire artificial intelligence value chain and points out that Europe will have great potential if it can effectively adopt and expand generative artificial intelligence solutions.
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The report mentioned that the value of generative artificial intelligence mainly comes from the adoption and promotion of enterprises, especially in the context of slowing labor productivity, which is particularly important for Europe. McKinsey predicts that generative AI could help Europe achieve productivity growth of up to 3% per year by 2030. This growth will span industries as diverse as retail, banking, finance and insurance, transportation, manufacturing and construction, and could lead to innovations that transform daily life, such as accelerated drug discovery and personalized education.
Still, Europe is lagging behind in this regard, with companies significantly lagging other regions in adopting this new technology. Nonetheless, the retail industry has begun to see some positive changes, such as smart virtual assistants driven by generative AI that can provide more personalized customer service and product recommendations, thereby enhancing the shopping experience. Not only do these assistants become more vivid and user-friendly, they can also interface with inventory management systems to help process orders and make the entire shopping process smoother.
In the financial industry, banks and other lending institutions are using generative artificial intelligence to conduct accurate risk assessments and improve algorithmic trading, allowing for rapid buying and selling decisions in rapidly changing markets. For example, a global bank uses enhanced search generation (RAG) technology to enable wealth advisors to quickly analyze 100,000 documents and extract the essence, saving a lot of time and providing more professional advice to customers.
In the field of healthcare, generative artificial intelligence is also playing an increasingly important role, helping doctors diagnose complex medical conditions. By quickly retrieving large volumes of medical literature and case studies, generative AI can provide comprehensive support to doctors, thereby improving diagnostic efficiency.
Although the potential of generative AI has not been fully exploited and there are still many challenges ahead, these challenges can hopefully be solved with strong leadership. Whether it is establishing a regulatory framework to protect individual rights at the political level or improving learning and flexibility about new technologies at the corporate executive level, they are key to realizing this huge potential.
Highlight:
Generative AI is expected to add $575 billion to the European economy over five years.
European companies are lagging behind in adopting generative AI and need to step up their game.
Several industries have begun to explore the application of generative artificial intelligence, such as retail, finance, and healthcare.
All in all, generative AI brings unprecedented opportunities to the European economy, but it also faces challenges. Europe needs to actively respond to these challenges and seize opportunities to fully realize the potential of generative artificial intelligence and promote sustained economic growth.