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January 23, 2024

In data: What European executives really think about GenAI

A new report from BCG X found the generative AI gap between Europe and America could widen if European corporates don’t move quickly to integrate new technologies

Sarah Drumm

4 min read

A new survey from BCG X, the tech build and design unit of Boston Consulting Group, found that while European corporates are keen to invest in GenAI, they are less optimistic about potential productivity gains compared to their North American and Asia Pacific counterparts. 

The survey, which canvassed opinions of 1,406 executives around the world, also found evidence of a potential GenAI talent gap brewing, with European corporates placing less importance on upskilling staff on how to use this nascent tech.

For this reason, cautious European executives risk falling behind firms in America. “That’s the big call to action from the survey,” says Sylvain Duranton, BCG X’s global lead. “The magnitude of the benefit you can reap from GenAI is so big that no one can take that risk. Whatever the sector, if you are cautious you will lose ground.” 


Here, we dig into the report’s findings with Duranton. Some of the conversation has been edited for clarity. 

Sifted: One in ten executives around the world say GenAI is a top tech priority for 2024. How has it reached the top of their lists so quickly? 

Duranton: GenAI is so disruptive that companies need to create a blueprint for what they will look like in five years, and that’s why CEOs are involved. They want to know what it looks like.

I’ll give you an example. Some banks hire financial experts in their call centres to give themselves a competitive advantage. But many of those requests could be handled by agents supported with GenAI. Now everyone has the same technical level — so where does that competitive advantage go? You will need to rethink how you will be stronger than your competitors. 

Executives expect a 10% increase in productivity from GenAI. Which functions or processes will benefit the most?

There will maybe be 10-20% productivity gains for everyone, because everyone will be using GenAI in their day-to-day lives. 

Specific functions will see additional transformational impact, such as customer service, compliance and maintenance. Anywhere where there is masses of documentation that needs to be screened or built. I don’t think we won’t need creative people any more, but taking a concept and translating it into many languages and formats will bring productivity gains in functions like marketing.

Engineering, too. If you want to design a new power plant, for instance, GenAI can produce more designs with more suppliers. When you move to detailed designs, including economic simulations, GenAI can optimise decision-making. 

European executives seem less optimistic about GenAI’s productivity potential. Why?

You can see that Europe is ahead of North America in terms of increasing investment in GenAI. So I’m not concerned about their appetite. But I am concerned about European companies deploying and scaling GenAI. They’re behind, and the risk is that they view this too much as a tech topic. They underestimate the amount of energy and work that needs to happen across the whole organisation. 

That’s a pattern we saw in previous iterations of AI, where European companies emphasised having the best, shiniest tech object over at-scale deployment. 

So European corporates need to be speaking to all departments, not just their tech teams, about deploying GenAI?

Exactly. If you want to make money with GenAI, 30% of the money and resources will go to plugging the tech into the legacy system. The rest goes into changing the people and the organisation. It’s a transformative project. 

When you say “we are going to have the marketing function of the future”, for example, it is nowhere near a tech project. The people part, the expertise part, the rethinking of the process part — that’s where companies need to focus.


What other pain points do executives experience when integrating GenAI?

There’s an explosion of software companies pitching CEOs with the latest and greatest technology, which is hard for leaders to navigate. 

The legal framework in the EU is also not yet stabilised, and that uncertainty is not incentivising companies to move fast. There are also challenges around intellectual property (IP), with the very high-profile legal actions in North America.

Another issue is cost. With GenAI, the cost of scaling can be significant because of licence costs and the amount of data, which has a high cost in terms of both CPU and CO2 emissions. If 2023 was the year of discovery and piloting, 2024 will be the year of scaling. And scaling has a real cost.

What challenges do tech startups selling GenAI solutions to European corporates face?

The US hyperscalers hold very strong positions in data platforms and LLMs. But when it comes to the industry, sector and function-specific software layers, the game is very open in Europe because of country and region specificities.

What advantages will first adopters of GenAI see?

Those pioneers will reap the benefits of GenAI much faster. They will learn how to bring together technology and processes, and upskill their people. Doing this at scale is hard, so building that muscle as soon as possible is the biggest benefit of moving now, even if you change technologies in a few months. 

Read more about the survey findings here on bcg.com