EU investments in artificial intelligence and blockchain technologies account for only 7% of the global volume; the annual funding gap is from 5 to 10 billion euros. This is stated in the report of the EIB.
So, the EU’s attempts to catch up with the level of technology in China and the United States limited precisely by the lack of investment. Which the financial institution estimates at 10 billion euros.
Capital investments in AI and blockchain in the world amount to 25 billion euros. At the same time from China and the United States, they account for more than 80%. For the EU, this percentage is much lower – 7%, or 1.75 billion euros.
As such, companies and governments in Europe are significantly under-investing in AI and blockchain compared to other leading regions, and it has become clear that the EU is struggling to translate its scientific excellence into business applications and economic success.
The bank said that the lack of investment in both sectors compared to other regions is a sign that the EU has failed to translate scientific knowledge into applicable business models.
The EIB said access to finance could become more problematic in the short term as a result of market conditions, potentially widening the investment gap. EU and Member State support schemes could partially fill this gap. But private markets will clearly have to contribute to the balance. That is, additional funding from private markets will be required if the EU intends to keep up with global competitors.
The importance of blockchain in rebuilding industries affected by the COVID-19 pandemic
The bank’s report highlighted the importance of both technologies and their potential for recovering industries affected by the COVID-19 pandemic. It’s about financial services, healthcare and business intelligence. In addition, they are important for enhancing the economic resilience of the EU.
While the COVID-19 pandemic has negatively impacted the blockchain industry, the changed situation could open up new opportunities. For example, the coronavirus crisis has caused major disruptions in international shipments. Long, complex chains make it difficult to forecast and plan for supplies. And these problems can well be solved by blockchain.
Given the benefits of blockchain – the transparency of the supply chain and the ability to trace goods. It’s expected that investments in this industry have only been temporarily reduced and will rise again soon.
Among the factors that led to the deficit, the bank names a lack of knowledge and a limited profile of European venture funds in both technologies.
Even amid investment shortfalls as evidenced by the EIB, financial institutions in Europe continue to experiment with blockchain technology. Dozens of banks and financial institutions around the world are exploring the possible applications of blockchain technology. The Banque de France recently used the Ethereum blockchain to conduct pilot tests of the central bank’s digital currency. Most of the major EU countries have announced their intention to look into the development of CBDCs in the coming years.
The European market expected to grow by 80.2% annually and reach $ 3.5 billion in 2022, approaching the American market in volume.
In Europe, retail and manufacturing companies showed the highest growth rates in blockchain investments.