Europe in the Intelligent Age: From Ideas to Action (McKinsey & Company)

Summary

• Large European corporations invested €700 billion a year, or €3,000 per capita, less than their US counterparts between 2015 and 2022.p.4
• Returns on invested capital for corporate Europe trailed the US by 4 percentage points.p.4
• Europe competes effectively with the US and China in only four out of 14 critical technologies.p.4
• In 2022 corporate R&D and capital spending by large European firms trailed US firms by €700 billion, with €450 billion of the gap in technology.p.6
• Europe's market share in new arenas of competition set to grow to $30 trillion by 2040 is no more than 9%.p.7
• The largest corporate investors in Europe spent €25 billion on AI in 2024, compared with more than €150 billion by the largest US technology firms.p.7

Key insights

1. Europe lags the US and/or China in 10 of 14 significant technologies.p.7
2. European corporations earn about one-third lower returns on invested capital than competitors domiciled in the US.p.8
3. The paper proposes 10 public sector grands projets alongside private sector-led lighthouse initiatives.p.4
4. The technology assessment draws on facilitated dialogues with over 40 industry leaders.p.8
5. European corporations have invested less than half as much into ICT equipment as US firms.p.7