Artificial Intelligence in Europe - Outlook for 2019 and Beyond - How 277 Major Companies Benefit from AI - Microsoft Pulse

in Europe
Outlook for 2019 and Beyond

How 277 Major Companies Benefit from AI
                                                                                                                                                                     Foreword  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 06
                                                                                                                                                                     Executive Summary - ‘At a Glance’ .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  08

                                                                                                                                                                     Setting the Scene
                                                                                                                                                                     About this Report  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .              10
                                                                                                                                                                     Rich Data  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .       13
                                                                                                                                                                     Executive Perspective .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                 14
                                                                                                                                                                     Participating Companies .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .                     16
                                                                                                                                                                     Bits & Bytes  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .       18
                                                                                                                                                                     Follow the Money  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .               20
                                                                                                                                                                     Case Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                  22
                                                                                                                                                                     Experts .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .    23

                                                                                                                                                                     Role of AI in European Business
                                                                                                                                                                     A Strategic Agenda  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  27
                                                                                                                                                                     Among Friends .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  28
                                                                                                                                                                     Push or Pull  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  29
                                                                                                                                                                     Ready, Set... .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  30
                                                                                                                                                                     AI Maturity Curve  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  32
                                                                                                                                                                     State Your Business .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 34
                                                                                                                                                                     Case Study  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 36

                                                                                                                                                                     Business Benefits and Risks
                                                                                                                                                                     Another World .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  38
                                                                                                                                                                     AI Here, There, Everywhere .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 40
                                                                                                                                                                     Case Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
                                                                                                                                                                     Use it or Lose it .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  42
                                                                                                                                                                     Making AI simple  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  44
                                                                                                                                                                     Case Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
                                                                                                                                                                     Sector Benefits Landscape .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  48
                                                                                                                                                                     Risky Business  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  51

                                                                                                                                                                     Learn from the Leaders
                                                                                                                                                                     Capabilities  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  53
                                                                                                                                                                     AI Competency Model  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  55
                                                                                                                                                                     Advanced Analytics  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  56
                                                                                                                                                                     Data Management  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 58
                                                                                                                                                                     AI Leadership  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 60
                                                                                                                                                                     Open Culture  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  62
                                                                                                                                                                     Emerging Technology  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 64
Disclaimer                                                                                                                                                           Agile Development  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  66
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2                                                                                                                                                                                                                                                                                                                             3
AI will be useful wherever intelligence is
    useful, helping us to be more productive in
    nearly every field of human endeavor and
    leading to economic growth.

    — Harry Shum, Executive Vice President of
     Microsoft AI and Research Group &
     Brad Smith, President and Chief Legal
     Officer at Microsoft

4                                                 5
Preface                                                                                    Preface


          Human Ingenuity

          The printing press, the automobile & the Internet are just a few technolog-
          ical achievements that have advanced our world. All were driven by human
          ingenuity: our innate creativity that inspires us to learn, imagine & explore.
          This spirit is what pushes us to challenge the boundaries of the possible to
          go ever forward.

          Today, AI is helping to amplify our human ingenuity, opening up exciting
          new possibilities for how intelligent technology can shape our world. At
          Microsoft, our goal is to democratize access to AI for everyone through in-
          novative & powerful platforms, & above all, we’re focused on ensuring that
          our AI tools & technologies are deployed responsibly & earn people’s trust.

          And yet, we realize that AI is one of the lesser understood modern tech-
          nological break-throughs. Many questions remain. How are companies
          applying this technology to empower employees, engage with customers,
          transform their business and optimize their operations? Where are they
          seeing benefits, and what are their blockers?

          To provide answers, Microsoft commissioned this study to understand the
          AI strategy of major companies across 7 sectors & 15 countries in Europe.
          It examines these companies’ readiness to adopt AI, how they rate the im-
          pact and benefits from AI implementations, and what they perceive as risks
          & keys to success.

          We hope you find these insights inspirational for your own journey toward
          adopting AI & realizing its benefits for amplifying human ingenuity.

          Vahé Torossian
          President, Microsoft Western Europe

6                                                                                               7
Preface                                                                                                                                                                                                                                                                              Preface

At a Glance
                                                                                                                                       Noticeable potential for AI in many                  8 key capabilities that are most                       transformation by articulating a vision,
                                                                                                                                       corporate functions                                  important ‘to get AI right’                            setting goals and securing broad buy-
                                                                                                                                       The most widely reported adoption                    When asking the respondents to rank                    in across the organization.
                                                                                                                                       of AI (47%) was in the IT/Technolo-                  the importance of 8 capabilities to en-
                                                                                                                                       gy function, followed by R&D with                    able AI in their businesses, ‘advanced                 To summarize, the challenge ahead
                                                                                                                                       36%, and customer service with 24%.                  analytics’ and ‘data management’                       appears to be as much about culture
                                                                                                                                       Interestingly, several functions are                 emerged as the most important. ‘AI                     and leadership as it is about data,
                                                                                                                                       hardly using AI at all; most notably,                leadership’ and having an ‘open cul-                   analytics, and technology.
While the hype of artificial intelligence    Most impact expected from ‘opti-            is almost as much as AI is expected to
                                                                                                                                       the procurement function, where only                 ture’ followed.
(AI) and its potential role as a driver of   mizing operations’, with ‘engaging          impact the core of these companies’ cur-
                                                                                                                                       4% of the companies currently use AI,
transformational change to businesses        customers’ as a close second                rent business with 65% expecting AI to
                                                                                                                                       followed by HR with 7% and product                   When self-assessing the capabilities
and industries is pervasive, there are       89% of the respondents expect AI to         have a high or a very high impact on the
                                                                                                                                       management with 9%. This is perhaps                  where the companies are least com-
limited insights into what companies         generate business benefits by optimiz-      core business. With AI presumably push-
                                                                                                                                       surprising, given the many use cases                 petent, they point to emotional intel-
are actually doing to reap its benefits.     ing their companies’ operations in the      ing companies into totally new domains
                                                                                                                                       and applicable solutions in these func-              ligence and AI leadership - defined
This report aims at getting a deeper         future. This is followed by 74% that ex-    in the future, it is perhaps not surprising
                                                                                                                                       tional areas.                                        as the (lack of) ability to lead an AI
understanding of how companies cur-          pect AI to be key to engaging custom-       that AI is receiving attention as a key
rently manage their AI activities, and       ers by enhancing the user experience,       topic for executive management.
how they address the current challeng-       tailoring content, increasing response
es and opportunities ahead.                  speed, adding sentiment, creating           Very few of the 277 companies con-
                                             experiences, anticipating needs, etc.       sider themselves “advanced” with AI
To get to the heart of this agenda, we
                                                                                                                                            What sets the most ‘AI mature’ companies apart?
                                                                                         Despite the apparent sizable impact that
received input from AI leaders in 277        C-suite respondents scored ‘engaging        companies expect from AI, only a very
companies, across 7 sectors and 15           customers’ highest of the AI benefit        small proportion of companies, consti-
countries in Europe, via surveys and/or      areas. Noticeably, 100% of the most ad-     tuting 4% of the total sample, self-re-            They expect AI will be beneficial in ‘empowering employees’ (76% of ‘more mature’ companies vs. 42% of ‘less
interviews. Below is the brief summary       vanced* companies expect AI will help       port that AI is actively contributing to           mature’ companies)*.
of what they had to say.                     them engage customers, compared to          ‘many processes in the company and
                                             only 63% of the less mature companies.      enabling quite advanced tasks today’               They report using a combination of structured and unstructured data for AI (65% of ‘more mature’ companies vs.
AI is a “hot topic” - but more so on         Using AI to ‘transform products and         (referred to as ‘most advanced’ in this            15% of ‘less mature’ companies), and data from both internal and external sources (68% of ‘more mature’ compa-
C-level than in daily operations             services’ comes out slightly lower with     report).                                           nies vs. 16% of ‘less mature’ companies).
71% of the companies respond that            65%, and ‘empowering employees’
AI is considered an important topic          the lowest with 60% of the companies        Another 28% are in the ‘released’ stage            They expect AI will help them ‘engage customers’ (85% of ‘more mature’ companies vs.
on the executive management level.           expecting AI-generated benefits in          where they have put AI selectively to ac-          59% of ‘less mature’ companies).
This is significantly higher than on         that area.                                  tive use in one or a few processes in the
the non-managerial / employee level                                                      company. The majority, 51% of compa-               They see AI predominately being driven from a combination of technology push and business pull (61% of ‘more
where AI is only considered an impor-        AI is expected to impact entirely           nies, are still only planning for AI or are        mature’ companies vs. 32% of ‘less mature’ companies).
tant topic in 28% of the companies.          new business areas in the future            in early stage pilots. 7% of companies
Interestingly, Board of Directors also       57% of the companies expect AI to           are self-rated as least mature, indicating         * ‘More mature’ defined as companies that self-ranked as 4 or 5 on the maturity 5-scale, and ‘less mature’
came out lower with ‘only’ 38% of            have a high impact or a very high im-       that they are not yet thinking about AI at         defined as companies that self-ranked as 1 or 2.
respondees reporting that AI is impor-       pact on business areas that are “entirely   this stage.
tant to their board.                         unknown to the company today”. This

          Only   4%
                                                Percentage of companies
                                                 that are still only in the
                                               planning or piloting stages:
                                                                                                   of the companies
                                                                                                                                               of the companies
                                                                                                                                                                                                 Share of companies that use
                                                                                                                                                                                                   acquisitions as a way to                                        80%
                                                                                                                                                                                                                                                              of the most mature
                                                                                                                                                                                                    obtain AI capabilities:

                                                         61%                                                                                                                                               10%
of the companies are actively                                                              respond that AI is considered               expect AI to have a high impact                                                                                     companies expect that AI
 using AI in ‘many processes                                                                ‘an important topic’ on the                  on ‘business areas that are                                                                                          will be beneficial by
and to enable advanced tasks’                                                              executive management level                     entirely unknown today’                                                             only                         ‘empowering employees’

8                                                                                                                                                                                                                                                                                         9
Setting the Scene                                                                                                                                                                                                                          Setting the Scene

About this Report
What’s new?

Artificial Intelligence (AI) is not new.   in AI, what they are investing in, and      efit areas, how mature companies are      Straight from the executives               Contributions from open-minded
It has existed for decades: processing     how they are managing the compli-           in terms of adoption, and examining                                                  and collaborative companies
                                                                                                                                 Where this report and extensive da-
voice to text or language translation;     cated process of adopting this new          self-reported competence levels re-       taset adds new insights is primarily       We are extremely thankful for the time
                                                                                                                                                                                                                        During the past few years, we
real-time traffic navigation; dynami-      technology and deriving value across        garding the capabilities required to      into how leading companies are ap-         and effort the many executives have
cally serving targeted advertisements      business opportunities.                     succeed when implementing AI.                                                        put into participating in interviews and    have learnt what is easy, what
                                                                                                                                 proaching AI on a very practical level.
based on personal data and browsing                                                                                              We hear straight from executives how       providing data for this study. We’re par-   is hard, what is realistic and
history; predicting trends and guiding     Perspectives, experiences, self-            From the aggregate dataset we have        their companies are addressing cur-        ticularly appreciative of their willing-    what is only hype.
investment decisions in financial in-      assessment, and benchmarks                  been able to determine some bench-        rent challenges, and how they apply AI     ness to openly share experiences and
stitutions. The current developments       From new surveys, interviews and case       marks across the covered markets,         to unlock new value pockets.               provide their perspectives on where
have been fueled by an exponential                                                     which we compare the individual                                                      the future is heading within AI.            — DNA
                                           studies gathered from approximately
rise in computing power, increasing                                                    country with throughout the report.                                                                                                Telecommunications
                                           277 companies, we provide a snapshot                                                  Based on the many interviews con-
accessibility and sophistication of pow-   of the current state of AI in 15 European   The report also covers a full spectrum    ducted, this report reveals some clear     While this indicate a general interest in
erful algorithms, and an explosion in      markets. This includes analyzing AI’s       of industry groups which tend to reveal   excitement and immense potential for       the AI topic, it also speaks to the in-
the volume and detail of data available    relative importance on the strategic        interesting insights.                     using AI to bring new, improved prod-      creasingly collaborative approach
to feed AI’s capabilities.                 agenda, its expected impact and ben-                                                  ucts and services to market, create        many leading companies are taking
                                                                                                                                 exceptional experiences for customers      when entering new technology do-
Reality vs. hype                                                                                                                 and employees, and create ways to          mains and embarking on journeys
                                                                                                                                 operate that enhance performance           into unknown territories.
Only recently started to see more
widespread, scaled adoption of AI                                                                                                across the board.
across sectors, value chains and eco-
systems. Yet AI technology is quickly                                                                                            We learned that regardless of which
approaching a point where it is be-                                                                                              use cases the companies pursue and
coming a critical element in enabling                                                                                            the role that AI currently has, taking a
companies across sectors to drive                                                                                                strategic outlook to assess the implica-
revenue, increase profits and remain                                                                                             tions for the business and responding
                                                                        One of the key challenges is meeting the                 accordingly are increasingly seen as
                                                                        high expectations from the organization                  crucial for any executive agenda.
We hear many people in numerous                                         - AI is not magic, but takes considerable
companies talk about AI. While the                                      effort to successfully implement.
hype is pervasive, not a lot of people
fully understand its technological
potential, where it can create value or                                 — H.Lundbeck
how to get started. This report aims at                                   Pharmaceuticals
providing a practical understanding of
why European companies are investing

10                                                                                                                                                                                                                                                       11
Artificial intelligence in Europe                                                                                                                                Setting the Scene

                                                 Rich Data
                                                 Which sources of information is the study based on?

When working with AI initiatives, it is
important to focus on key business issues        This report combines multiple sources
                                                 of data to answer the questions of why,
                                                                                              We also present case studies of specific
                                                                                              companies from different countries to
                                                                                                                                          Recognizing and mitigating
                                                                                                                                          potential survey and interview bias

that benefit the whole and not just doing sub-   where and how AI is currently being used
                                                 in business. It provides an inside view
                                                                                              provide an understanding of what they
                                                                                              are doing with AI and why, drawing
                                                                                                                                          In terms of methodology, this report
                                                                                                                                          follows robust research design and

optimization at small scale.
                                                 across markets and sectors. It provides      on lessons learned and obstacles to         protocol. Doing so minimizes potential
                                                 a pan-European view, and adds value          overcome when putting AI to use for         bias, but does not eliminate it, as it
                                                 through a quantitative perspective on        specific use cases and to derive value      is inevitable in market research. One
                                                 how advanced companies are with AI,          on a strategic level.                       potential type is social desirability
                                                 and a qualitative perspective on how to                                                  and conformity bias, as the topic of
                                                                                              Proprietary AI investment data
— Novo Nordisk Pharmaceuticals
                                                 develop the skills required to succeed                                                   AI receives lots of media and political
                                                 with AI. We have received input from         We have supplemented the prima-             attention. Response bias, including
                                                 over 300 people from 277 participating       ry source input from the companies          extreme responding, cultural bias, and
                                                 companies. This has resulted in a range of   with acquisition data from numerous         acquiescence bias (“yea-saying”), are
                                                 interviews and case studies as well as 269   sources, to take the pulse of the AI        potential factors as we ask respondents
                                                 company responses to our survey.             investment market in Europe. These          to self-report on their respective com-
                                                                                              insights help provide a picture of the      panies’ experience. Therefore, while
                                                 Extensive online survey data from            wider European AI ecosystem and its         this report follows best practices, some
                                                 business leaders in 269 companies            development.                                bias is possible.
                                                 We have surveyed people with a leading
                                                 role in managing the AI agenda in all the    AI expert perspectives                      Nonetheless, with the combination of
                                                 companies that have contributed to the       With this wider understanding of AI         extensive survey data, interview data,
                                                 study. This gives us an aggregate dataset    start-up acquisitions, partnerships, and    investment data, and expert perspec-
                                                 that enables a perspective for each mar-     investment funding, we outline how          tives, we believe the report provides a
                                                 ket and each sector, as well as compara-     investments in AI are skyrocketing,         solid foundation for an indispensable

I don´t see why speaking openly about
                                                 tive insights for the respective company     where AI investment is taking place         view of executive experience with –
                                                 types, sectors, and countries in Europe.     geographically, and which sectors are       and future plans for – AI in business.

our ongoing AI intiatives should be a big
                                                                                              making bets. As we are on the cusp of
                                                 Qualitative in-depth interviews with         widespread change driven by AI, we
                                                 senior business executives                   also reached out to AI experts from

fuss. What really makes a difference from        In addition, we conducted deep-dive
                                                 interviews to gain deeper, qualitative
                                                                                              academia for an outlook of AI technol-
                                                                                              ogies going mainstream, and to gain

a competitive perspective is a company´s
                                                 insights into how AI is affecting the ex-    an understanding of the macro scale
                                                 ecutive agenda. Through conversations        of business effects that they expect will
                                                 with business leaders, we report on          materialize when looking into a distant

abilitity to execute.                            where they expect AI will have an impact,
                                                 how important AI is to their current and

                                                 future business strategies, what benefits
                                                 they hope to realize from implementing
                                                 AI, and which capabilities they believe

— PFA Pension & Insurance                        are key to advance AI maturity in their

12                                                                                                                                                                             13
Setting the Scene                                                                                                                                                                                                                                                                                                                                                                                                   Setting the Scene

Executive Perspective
                                                                                                                                       Large group of respondents                                                                                                                                      Surveyed companies are well represented across
Who are the respondents that have contributed to the study?                                                                            with a specific AI/digital role                                                                                                                                 each of the 15 European markets
                                                                                                                                       Organizational function of respondents                                                                                                                          Number of online surveyed companies per country
                                                                                                                                       in the online survey

The data approach used allows us to         Functional diversity                          A combined annual revenue
identify trends across industries and       The respondents cover very different          of $2.3 trillion
countries based on input from various       functions, of which the most common           Participants come from both major

                                                                                                                                                                                                                                                                                                                                                          N e th
functional business areas. Consequent-      are designated AI/digital department,         listed companies, privately held compa-         67


ly, we have captured a range of in-         followed by IT, and strategy/general          nies, and in some case relatively small

                                                                                                                                                                                                                                                                                                                                                                                     Ir e l a
sights, learnings, and perspectives from

                                            management functions. This functional         companies. In totality, they represent a                          60
both strategic and technical points of      diversity increases the breadth of the        combined revenue of approximately




                                            report, with insights and perspectives        $2.3 trillion. Despite covering a signifi-



                                            covering widely different aspects of AI.      cant part of total European business, our                                                        45
Respondents predominantly in                                                              selection criteria have also favored more

                                                                                                                                                                                                                                                                                                             D e nm                                                                                                                             an d
senior level positions                                                                                                                                                                                                                                                                                                ar k                                                                                                             ze r l
                                            Surveyed companies span                       niche oriented companies with extensive                                                                                  39                                                                                                                                                                                                        Swit
To ensure that these insights and per-      multiple sectors                              AI experience and capabilities.                                                                                                                      27
                                                                                                                                                                                                                                                                                                                                              25                                                           20
spectives are relevant at the executive
level, we surveyed and interviewed
                                            The participating companies are spread                                                                                                                                                                                                                                                                                   269
                                            fairly evenly across seven sectors, with                                                                                                                                                                                                                                                                               online survey
                                                                                                                                                                                                                                                                                                                                              21                                                           20
high-ranking officers with a responsi-      the majority of companies belonging                                                                                                                                                                                                                                                                                     companies                                                        Italy
                                                                                                                                                                                                                                                                                                             Austria                                                  in total
bility for driving the AI agenda in their   to Industrial Products & Manufactur-                                                                                                                                                                                                                5
respective companies. With 60% of           ing, followed by Financial Services, and                                                                                                                                                                                                                                                                                                                  22
respondents being either part of top        Transportation, Energy & Construction.
management or the executive man-            Services and Life Science are represented                                                                                                                                                                                                                                             ga
                                                                                                                                                                                                                                                                                                                                       l                                                                             Fin



                                                                                                                                                                                   General Management, Strategy
                                                                                                                                                           General IT/Technology

                                                                                                                                                                                         & Business Development

                                                                                                                                                                                                                  R&D/Product Management

                                                                                                                                                                                                                                           Customer Service & Marketing

                                                                                                                                                                                                                                                                             Admin & Finance


agement team, their input is likely well                                                                                                                                                                                                                                                                                 r                                                                                                       d
                                            to a lesser extent.                                                                                                                                                                                                                                                       Po
attuned to the general perspective and

                                                                                                                                                                                                                                                                                                                                                                                                 Un ce & G
overall strategic direction of the com-


panies they represent.

                                                                                                                                                                                                                                                                                                                                                                        Belgium &

                                                                                                                                                                                                                                                                                                                                                                                                          i n g m a ny

More than 300 participants                          Majority hold a top management or executive position
Number of participants interviewed                  Organisational level of person participating in the study
and/or online surveyed in the study
                                                                                                                                       Seven major sectors covered in the study
                                                                                                                                       Representation of participating companies per sector category

                                                      C-suite/Executive                         27%

                                                                                                                                                                                                                  9%                                                                                    21%                                                        17%                                                                7%
                                                      Top Management                                                                           Life Science                                                                                                                          Industrial Products                                        Finance                                                  Services
                                                      (non-executive)                     33%                                            Pharmaceutical, Healthcare,                                                                                                                   Manufacturing,                                      Banking, Insurance,                                    Professional Services,
                                                                                                                                                  Biotech                                                                                                                            Materials, Equipment                                     Investments                                       Hospitality, Public Services,
                                                                                                                                                                                                                                                                                                                                                                                                Membership Organization

                                                      Level                         37%                                                                                                                           13%                                                                                   16%                                                        17%
                                                      (non-managerial level)   3%                                                                            CPR                                                                                                                      TMT                                              Infrastructure
                                                                                                                                                       Consumer Products                                                                                                           Technology,                                     Transportation, Energy,
                                                                                                                                                            & Retail                                                                                                      Media/Entertainment & Telecom                           Construction, Real Estate
     15 European markets                                                                        15 European markets

14                                                                                                                                                                                                                                                                                                                                                                                                                                                 15
Setting the Scene                                                                                                                                                Setting the Scene

277 Companies                                                             Indie Campers, Intesa Sanpaolo, ISDIN, ISS, Jansen AG, Julius Baer,
                                                                          Katoen Natie, KBC Group, Kemira, Kingspan Group, KLP Banken,
                                                                          Komplett, Kongsberg Gruppen, LafargeHolcim, LanguageWire,
                                                                          LEGO, LEO Pharma, Lerøy Seafood, Liga Portugal, L’Occitane, Lonza,
A.P. Moller - Maersk, Acciona, Adamant-Namiki of Europe, Aegon,           L’Oreal, Lusíadas Saúde, Luz Saúde, Länsförsäkringar, MAPFRE,
Aena, Ageas, Agfa-Gevaert, Agrifirm Group, Ahlstrom-Munksjö,              Merkur Versicherung, Metall Zug , Metro, Metso, M-Files, Millicom,
AIB, AkzoNobel, Almirall, Alpro, ALSA, Amadeus, AMAG, Ambea,              Mota-Engil, Mutua Madrileña Automovilista, Møller Mobility Group,
APM Terminals, Aprila Bank, Arcelor Mittal, Ardagh Group,                 Neste, NH Hotel Group, Nilfisk, Nokia Corporation, NorgesGruppen,
Arval BNP Paribas Group, Asiakastieto Group, Assa Abloy,                  Norstat,     Novabase,     Novartis,   Novo      Nordisk,    Novozymes,
Assicurazioni Generali, Atea, Audi, Austrian Airlines, Austrian           Now TV, OBI, Oesterreichische Nationalbank, OP Financial Group,
Federal Computing Centre, Autogrill, BAM Group, Barco, BASF,              Opportunity Network, Orion, Paddy Power Betfair, Peltarion,
BAWAG P.S.K, Baxter, BBVA, Besix, Bolloré, BTG, BUWOG, C&C                Pernod Ricard,PFA, Philips, Planeta DeAgostini, Poste Italiane,
Group, Campbells International, Capio, Carmeuse, Carnival                 Posti, PostNord, Proximus, Pöyry, Rabobank, Raiffeisen Software,
UK, CEiiA, Cermaq, Chr. Hansen, Cirsa, City of Amsterdam,                 Raiffeisen Switzerland, Ramada Investimentos SA, Randstad, Rexel,
Colruyt Group, Com Hem, Combient, Comifar Distribuzione,                  ROCKWOOL Group, Room Mate Hotels, Royal College of Surgeons in
Constitutional Court of Austria, Coolblue, COOP Nederland,                Ireland, S Group, Saipem, Saint Gobain, Sakthi Portugal, Salsa, Saxo Bank,
Cosentino Group, Costa Crociere, Credit Suisse, Crédito Agrícola,         Sbanken, SBB Swiss Federal Railways, Schindler, SEB, SGS,
DAF Trucks, Danfoss, Danske Bank, Dawn Meats, DFDS, DNA,                  Siemens Mobility, SimCorp, Skandia, Solvay, Sonae, Sonae Arauco,
DNB, DSM, DSV, Dümmen Orange, Dynamic ID, DAA, Edison,                    SpareBank 1 SMN, SpareBank 1 Østlandet, Sportmaster, Statkraft,
EDP - Energias de Portugal, Egmont, EQT, Ericsson, Erste Group            Stedin, Steyr Mannlicher, Stora Enso, Styria Marketing Services, Suomen
Bank, ESB, ESIM Chemicals, Esprinet, Europac, Fazer, FDJ,                 Terveystalo, Swedbank, Swisscom, Taylor Wimpey, TDC, Teamwork,
Federal Office of Meteorology and Climatology MeteoSwiss, Ferrovial,      Telefónica, Telekom Austria, Telenor Global Shared Services, Telia,
Fexco, Finnair, Fortum, Galp, Geberit, Genalice, Generali Versicherung,   Tesco, Tetra Pak, The Navigator Company, TIM, Tine, Tokmanni ,
GetVisibility, Gjensidige Forsikring, Glen Dimplex Group, Globalia,       TomTom, Tryg, TTS Group, TVH, Ubimet, UDG Healthcare, UniCredit,
GN Store Nord, GrandVision, Grupo Antolin, Grupo Ascendum,                Unilin, UPM, Vaisala, Valmet, Valora Group, Van Lanschot, Vattenfall,
Grupo Codere Cablecom, Grupo Juliá, Grupo Nabeiro – Delta Cafés,          Version 1, Visana, Vodafone Automotive, VodafoneZiggo, Voestalpine
Grupo Pestana, Grupo Visabeira, GSK, GAA, H. Lundbeck, Hafslund,          High Performance Metals, WABCO, WALTER GROUP, Western Bulk,
Handelsbanken, Hera, Hostelworld, Husqvarna, IKEA Group,                  William Demant, Wind Tre, WIT Software, Wolters Kluwer, Zurich
Ilmarinen Mutual Pension Insurance Company, Implenia, Impresa,            Airport, Zurich Insurance, Öhman, Ørsted, Österreichische Post.

                                                                                                                      Note: Of all contributing companies, 14 chose to be anonymous

16                                                                                                                                                                              17
Setting the Scene                                                                                                                                                                                                                                                                  Setting the Scene

Bits and Bytes
What technologies and data solutions are within the scope of the study?

AI can be defined as the ability of a               not in common use by companies in          While companies historically have                               Companies are using a combination of              tions mentioned by many respondents
machine to perform cognitive func-                  Europe. Companies surveyed are cur-        primarily have used internal data for                           on-premise and cloud solutions                    are the flexibility to swiftly scale systems
tions which are normally associated                 rently focused on narrower and more        supervised Machine Learning, many                               Companies are increasingly using cloud-           up and down to accommodate changing
with humans. This includes reasoning,               specific use-cases that support existing   have begun exploring the possibility of                         based AI solutions for both storage and           demand, a variable cost structure, and
learning, problem solving, and in some              business. These efforts will undoubt-      combining internal and external data-                           on-demand computing power - 83% of                access to larger data sets. However, many
cases even exercising human behavior                edly help companies build capabilities     sets in order to produce even deeper                            companies reporting using Cloud tech-             companies are still relying on on-premise
such as creativity.                                 that are necessary to deploy more          insights.                                                       nology to some extent to enable their AI          solutions, not least due to existing data
                                                    advanced AI solutions in the future.                                                                       capabilities. Key benefits of cloud solu-         infrastructure.
Advanced AI applications are not                                                               Machine Learning and Smart Robot-
yet widespread                                      Machine Learning                           ics were found to be the most useful.
AI holds the potential to transform                 The most commonly used AI technol-         It is not clear from the study if this is
business in a radical way given its wide            ogy among the surveyed companies           because they are simply the most com-                           Machine Learning and                               Companies are using a mix of Data Sources and Storage
variety of use. Quite simply, business              is Machine Learning. This is inarguably    mon starting points before deploying                            Smart Robotics found to be                         Solution: How are you primarily dealing with the computing demands
leaders need to understand AI in order              due to its wide-ranging applicabili-       more advanced technologies, or if they                          the most useful                                    needed for AI?
to grasp the opportunities and threats              ty, making it relevant for a variety of    also longer term hold the most wide                             Which of the following technologies have           Data Source: 1.Are you currently using unstructured or structured data
the technologies pose.                              use-cases across the value chain. Of the   and sigificant application potential.                           you found to be most useful in your com-           types in your AI process? 2.Are you currently using internal or external
                                                    different types of Machine Learning,                                                                       pany’s deployment of AI?                           data sources in your AI process?
While companies acknowledge the                     the most common is supervised Ma-
significant potential of broader, more              chine Learning, where software is fed
advanced AI technologies such as                    structured data and finds patterns that                                                                                                                                        Data Source                                  Solution
computer vision, speech recognition,                can be used to understand and inter-
and virtual agents, they are currently              pret new observations.
                                                                                                                                                                  77%               44%                  40%

A broad definition of technologies are included in this AI definition                                                                                           Machine           Smart               Natural
Technologies included in the definition of AI used in this study                                                                                                learning         robotics            language
                                                                                                                                                                                                    processing            38%                         32%                          27%
                                                                                                                                                                                                                        Internal                  Structured                     In Cloud
                                                         Text Analysis
                                                         Computational analysis of texts,
                                                         making it readable by other AI or
              Natural Language Processing                computer systems.                     Biometrics
              Computer interpretation, under-                                                  Analysis of human physical and                                     39%                39%                 26%
              standing, and generation of written                                              emotional characteristics – used
              natural human language.                                                          also for identification and access
                                                                                                                                                                 Neural             Text               Virtual
                                                                                                                                                              networks and         analysis            agents
Virtual Agents
                                                                                                                   Machine Learning                           deep learning                                               3%                           7%                           17%
Computer-generated virtual personas
that can be used to interact with people                                                                           A computer’s ability to ‘learn’                                                                     External                  Unstructured                  On premise
in both B2C, C2B, and B2B contexts.                                                                                from data, either supervised or

Speech Recognition                                                                                                 Neural Networks and Deep Learning
Enables computers to interpret spo-                                                                                Machines emulating the human brain,
ken language and to transform it into                                                                              enabling AI models to learn like humans.        21%               20%                 6%
written text or to treat it as commands
for a computer.
                                                                                                                   Computer Vision                               Speech          Computer          Biometrics            44%                          43%
                                                                                                                   Gives computers the ability to                                                                                                                                  56%
                                                                                                                                                               recognition         vision                                 Both                        Both
Smart Robotics                                                                                                     “see” images similar to how                                                                                                                                     Both
The combination of AI and robots to                                                                                humans see.
perform advanced tasks compared to
traditional non-intelligent robots.
                                                                                                                                                                   Affirmative responses, 15 European markets                                         Note: Remaining percent ‘Don’t know’ responses

18                                                                                                                                                                                                                                                                                                 19
Setting the Scene                                                                                                                                                                                                                                                                                                          Setting the Scene

Follow the Money                                                                                                                                                                       acquisitions, and is also much in line
                                                                                                                                                                                       with what we’re seeing when compar-
                                                                                                                                                                                       ing with the US and Asia.
                                                                                                                                                                                                                                                                                                TMT most active, behind private
                                                                                                                                                                                                                                                                                                equity and venture capital
                                                                                                                                                                                                                                                                                                Investments into AI companies per sector,
How much is invested in AI in Europe?                                                                                                                                        Finland                                                                                                            mUSD (accumulated 2008-2018)*
                                                                                                                                                                   $24M                Investment activity concentrated in
                                                                                                Norway                                                            21 deals             major European markets
                                                                                                               $30M                                                                    It comes as no surprise that a lot of
A few big AI transactions                                                                                      5 deals
influencing the overall picture                                                                                                                                                        investment activity is in the UK, France,
Company AI investments in mUSD and                                                                                                                                                     and Germany, having attracted 87% of
transaction volume per market                                                                                                          73 deals                                        investment in AI companies over the
                                                                                                                                                                                       past decade. The UK leads significantly                                                                                            $7,453M
(accumulated 2008-2018)                                                                                                                Sweden                                                                                                                                                                             1,027 deals
                                                                                                                                                                                       in this regard, with 533 of the total                                                                                              Private Equity /
                                                                                                                                                                                       1,362 AI transactions in Europe. From                                                                                              Venture Capital**
                                                                                                                                                                                       an investment perspective, it is also
                                                                                                                21 deals                                                               worth noting that in April 2018, the EU
                                                                                                                                                                                       committed to a 70% increase in invest-
                                                             $7262M                                             Denmark
                                        Ireland                                                                                                                                        ment in European AI by 2020, suggest-
                                                             533 deals
                                                                              The Netherlands                                                                                          ing further growth and potential in the
                                                         United Kingdom
                                              $39M                                                                                                                                     region.
                                             37 deals                                                45 deals

                                                                                          $110M                      $520M
                                                                                         14 deals                   140 deals
                                                                                                                                                                                       Steady increase in European AI investment
                                                                                                                                                                                       AI companies invested into, transaction volume, Europe (from 2008-2018)**                                                          $1,843M
                                                                                                                                                                                                                                                                                                                          220 deals
                                                                                                    $107M                                                                                                                                                                                                                 TMT
                                                                                                    31 deals          $75M
                                                                                                                     17 deals
                                                                              $1357M            Switzerland
                                                                              165 deals                                                                                                Number of                                                                                                                          $494M
                                                                                                                                Austria                                                transactions                                                                                                                       17 deals
                                                                                France                                                                                                                                                                                                                                    Industrial Products

                                              $3M                                                                                                                                      450
                                             8 deals                                                                                                                                                                                                                                                                      $368M
                                  Portugal                                                                                   $47M                                                                                                                                                                                         12 deals
                                                                                                                            29 deals                                                   400                                                                                                                                Infrastructure

     European                                                  $131M                                                                   Italy
                                                                                                                                                                                       350                                                                                        327
     markets                                                  79 deals
                                                                                                                                                                                                                                                Total                                                                     $254M
     UK bubble size not represenative                                                                                                                                                  300                                                   investment                                                                   21 deals
*Universal Robots acquired for $285M                                                                                                                                                                                                           $10.5bn                                                                    Life Science
                                                                                                                                                                                       250                                                                                228

The acquisition data from numerous                      alone. This trend is on track to con-                       tive investors and acquirers of AI than                                                                                                                                                               $70M
                                                                                                                    corporates, accounting for 75% of deal                             200                                                                                                                                41 deals
sources enabled us to explore the                       tinue, with an exponential increase                                                                                                                                                                                                                               Finance
European AI ecosystem and gain in-                      in interest in AI driving more large                        volume in the last 10 years. This is an                                                                                                     148
                                                                                                                    indication that AI companies are in the                            150
sights into investment activity.                        companies to invest in AI or acquire AI
                                                        bilities from innovative start-ups. Of                      early stages of high risk/high growth
                                                                                                                                                                                       100                                                            88                                                                  $38M
An exponential increase in AI in-                       the 15 markets surveyed, some include                       dynamics. It also indicates that, for                                                                                                                                                                 10 deals
vestment over the past decade                           one or two transactions that are signifi-                   large corporates, acquiring or invest-                                                                                                                                                                CPR
                                                                                                                    ing in external AI businesses in order                              50                              29        27
Looking at AI transaction activity                      cantly large deals.                                                                                                                        14         11
                                                                                                                    to obtain AI capabilities is relatively
across Europe, there has been a steep                                                                                                                                                    0                                                                                                                                $22M
                                                        Majority of investments in AI from                          limited. This is confirmed by our survey                                                                                                                                                              14 deals
consistent growth trend over the past
                                                        private equity and venture capital                          results where only 10% of companies                                           2008      2009       2010      2011       2012      2013      2014       2015   2016   2017                             Services
10 years, totaling 1,334 transactions
                                                                                                                    are seeking to obtain needed AI capa-
involving AI by 2017 – with a six-fold                  Private equity (PE) and venture capital
                                                                                                                    bilities through external investment or
increase in activity in the last 5 years                (VC) firms are significantly more ac-                                                                                                 Europe                                                                                                 **Including governmental investment

Note: Several transactions in the dataset did not have publically disclosed deal values, suggesting that actual total values are higher than what’s shown above                         *For all of Europe, 34 countries (not just the 15 markets focused on in this report)

20                                                                                                                                                                                                                                                                                                                                         21
Artificial intelligence in Europe                       ( Case Study )                                                                                                                                                                                            Setting the Scene

Ageas                                                                                                                                            Expert Perspective
                                                                                                                                                 What does the future look like according to AI analysts?

Ageas is currently using various forms          cars in insurance claims, which frees    Ageas is also anticipating going be-
of AI, while also investigating the po-         Ageas from having to send investiga-     yond pictures, towards AI that can
tential to use even more. For its daily         tors to assess the damage. This appli-   interpret videos. Furthermore, Natural
operations, AI models are used to               cation of AI makes the process signifi-  Language Processing (NLP) is being
forecast many aspects of the business.          cantly faster and more convenient for    applied in call centers and will soon
These forecasts are used by Ageas               both the client and Ageas. The appli-    play a pivotal role in transforming cus-
employees to make informed                                                                         tomer service. Ageas is imple-
decisions. Ageas currently has                                                                     menting Artificial Intelligence               We also spoke to a range of leading AI     Agile culture enables AI                    task is to educate and improve un-
over 100 internal predictive                                                                       in client-facing areas to re-
analytics projects running
                                           Ageas is implementing Artificial In-                    spond quickly and accurately,
                                                                                                                                                 experts from business and academia         Culture was a recurring theme as well.      derstanding, from C-suite leadership
                                                                                                                                                 to gain insights into the kind of change                                               teams to employees at the coal face.
or in the pipeline for the                   telligence in client-facing areas to                  while freeing up employees                    which we are on the cusp, and the
                                                                                                                                                                                            It can either stifle forward momentum
                                                                                                                                                                                                                                        This also ties in with the importance of
                                                                                                                                                                                            in organizations, or be the silver bullet
coming two years, of which               respond quickly and accurately, while                     to focus on the most critical                 role AI is expected to play as part of a   that enables the potential of AI to be      partnering to get started and access
more than 10 have already                freeing up employees to focus on the                      aspects of the business. The                  broader transformational wave.             realized from top to bottom.                the expertise needed to use AI. While
been implemented into the                                                                          key problem it faces with
                                          most critical aspects of the business.                   many AI technologies is their
                                                                                                                                                                                                                                        partnering and collaborating solves
                                                                                                                                                 AI is entering the mainstream              Some of the experts even argue that         the perennial AI challenge concerning
                                                                                                   dependence on language.                       and here to stay                                                                       the scarcity of talent, the significant
                                                                                                                                                                                            it’s not only technical skills that hold
However, for Ageas the most                                                                        For example, a successful sys-                                                                                                       cost and substantial benefit that can
                                                                                                                                                 One thing was clear from the experts       up AI projects, it’s also the need for a
interesting aspect of AI lies in its ability    cation of image analytics started in the tem implemented in the UK cannot be                                                                                                            be gained from AI means that organ-
                                                                                                                                                 we spoke to: as far as the peaks and       culture of experimentation.
to process unstructured data. Ageas             UK and is now being quickly rolled out   simply transferred and implemented in                                                                                                          izations also need to be cognizant of
                                                                                                                                                 troughs of hype and technological
has begun using AI to analyze custom-           to its other markets due to its success. Belgium or Portugal.                                                                                                                           building capabilities in-house for the
                                                                                                                                                 leaps surrounding AI go, there is no       Companies that are more natively
er photos to estimate the damage of                                                                                                                                                                                                     long-term.
                                                                                                                                                 doubt that we are living through a         digital or have gone down that road
                                                                                                                                                 particularly prominent peak, with no       understand the value of experimenting
                                                                                                                                                 indication that the buzz nor the po-       and iterating. They don’t think in tra-     Finally, as AI develops, we are also
                                                                                                                                                 tential will fade away any time soon. In   ditional terms of committing to year-       going to see innovation and expertise
                                                                                                                                                                                                                                        spreading outside of the dominant
                                                                            What next?                                                           a world increasingly dominated, dis-
                                                                                                                                                 rupted and driven by innovative tech
                                                                                                                                                                                            long projects that need to produce
                                                                                                                                                                                            specific outputs, but rather to explore     clusters of the likes of Silicon Valley,
                                                                                                                                                 powerhouses, large and small, it is no     and test ideas before scaling.              as governments, businesses and uni-
     Ageas is a Belgium-based insurance company, employing over             Going forward, Ageas will expand its AI initiatives to scale early                                                                                          versities increasingly invest in building
                                                                                                                                                 understatement to suggest that AI will
     50,000 people globally to serve 39 million customers across 15         successful use cases with intelligent automation in the front-                                                                                              knowledge, resources and capabilities.
                                                                                                                                                 be a chief protagonist in the change       When it comes to AI,
     countries, predominantly in Europe and Asia. With over 3 million       end and back-end of the business. The goal of this is to further
                                                                                                                                                 transcending all elements of business      knowledge is power
     clients in Belgium, almost 1 in 2 Belgians households are customers    automate processes and increase the efficiency of employees
                                                                                                                                                 in what has been labelled the Fourth       Expert opinion also seemed unani-
     of Ageas, making it a market leader in life insurance and number       on a large scale by empowering them with AI tools. Ageas is
                                                                                                                                                 Industrial Revolution.                     mous in that most people not directly
     2 in non-life. Its revenue in Belgium was over €5 billion in 2017.     progressively rolling out an AI-driven system aimed at forecasting
                                                                            what employees need and pushing it to them. The system will                                                     involved with AI must still have quite a
     Ageas is also a major player in auto insurance and travel insurance                                                                         Business-minded people will
                                                                            also play an important role in systemically mining the knowledge                                                basic understanding of what AI is and
     in the UK.                                                                                                                                  drive the transformation
                                                                            embedded in the company.                                                                                        what it can actually do. Therefore, the
                                                                                                                                                 The AI experts confirmed some of the
                                                                                                                                                 key ingredients necessary for AI in
                                                                                                                                                 organizations: a combination of do-
                                                                                                                                                 main and technical expertise, the ap-
                                                                                                                                                 propriate technology, the right talent,
                                                                                                                                                 and lots and lots of data. While letting
                                                                                                                                                 tech-savvy individuals drive innovation               Farmers and growers are still reasonably
We believe that AI will bring significant                                  You need experts that truly know the                                  is great for building understanding,                  conventional, with an average age of 55 years. The
disruptions, such as enabling self-driving cars.                                                                                                 true transformation will not come until
                                                                           technological playing field. You have to work                                                                               chances are that this will change significantly in the
                                                                                                                                                 business people start suggesting prob-
If cars can become self-driving, why would                                 with PhDs that understand both technology                                                                                   future. It could just be that technology companies
                                                                                                                                                 lems for AI to solve - not the other way
there be a need for personal insurance?                                    and semantics. These people are hard to find,                         round.                                                will become the disruptors of our market.
                                                                           they know they are precious on the market
                                                                           and they are typically more willing to join                                                                                 — Royal Agrifirm Group
                                                                           start-ups.                                                                                                                    Agricultural cooperative

22                                                                                                                                                                                                                                                                              23
Setting the Scene                                                                                                                     Setting the Scene

                                                                      We believe that every organization is going to have to write their
From the Horse’s Mouth*                                               own AI manifesto: what they believe about AI, how they’re going
                                                                      to use or not use data, how they’re going to publish data, and
*From the highest authority
                                                                      make the consumers of their products and services aware of that.
                                                                      The creation of those manifestos is going to become a gateway
                                                                      to the success of AI.

                                                                      — Norm Judah, Chief Technology Officer of Worldwide Services
                                                                      at Microsoft

The full extent of the AI story remains in its early stages. What
we do know is that big data, computing power and connectivity         If you have a ton of data, and your problem is one of classifying
are changing the industrial landscape. The opportunity rests in       patterns (like speech recognition or object identification), AI may
accelerating the digitization of businesses, making them more         well be able to help. But let’s be realistic, too: AI is still nowhere
data driven by building applications that deliver machine-assist-     near as flexible and versatile as human beings; if you need a ma-
ed insights.                                                          chine to read, or react dynamically, on the fly, to some kind of
                                                                      ever changing problem, the technology you seek may not yet ex-
— Mona Vernon, CTO, Thomson Reuters Labs                              ist. Intelligence is a really hard problem.

                                                                      — Gary Marcus, Founder & CEO, Geometric Intelligence, and
                                                                      Professor, New York University

In some cases, there is too much hype, but paradoxically, the
potential opportunities and benefits of AI are still, if anything,
under-hyped. Often, the impact of new technologies is overes-         AI is a general purpose technology, so will eventually affect all in-
timated in the short term and underestimated in the long term,        dustries. However, this impact can be slowed by the lack of data
and while there is a lot of noise regarding AI, there’s been a lack   in particular industries. There’s also more innovative cultures
of in-depth discussion and analysis of how it’s actually going to     inside different organizations, that can either drive adoption or
transform businesses.                                                 prevent it.

— Nigel Duffy, Global AI Innovation Leader, EY                        — Marc Warner, CEO, ASI Data Science

24                                                                                                                                                  25
Artificial intelligence in Europe                                                                                                                                                   Role of AI in European Business

                                                                      A Strategic Agenda
                                                                      Where is the AI conversation currently taking place?

Role of AI
                                                                      A good starting point to understand                 Active C-suite and Board of Direc-          Speculating about the reason, it could
                                                                      how large European companies are                    tors involvement                            both pertain to job insecurity and to
                                                                      handling AI is to look at who in the                In 71% of the companies surveyed, AI        the fact that AI is still a highly abstract
                                                                      organization is driving the AI agenda,              is already an important topic on the        topic for many when it comes to prov-
                                                                      whether it be the Board, the C-suite,               C-suite agenda and across various           ing day-to-day business value.
                                                                      managers, or employees.                             roles - from cost-focused CFOs looking
                                                                                                                          for efficiency through automation, to

in European
                                                                      AI is particularly relevant at                      CDOs with customer-oriented ambi-
                                                                      higher organizational levels                        tions as part of wider digitalization
                                                                      From driving strategic considerations               efforts, to the CTOs who is often still
                                                                      at the Board level to being a topic of in-          responsible for a type of AI Center of
                                                                      terest or concern at the employee level,            Excellence.
                                                                      the results are clear: AI is important

                                                                      and resides across all levels at many of            Companies more advanced in AI tend
                                                                      the organizations we interviewed.                   to have stronger involvement of the
                                                                                                                          C-suite and the Boards of Directors
                                                                      Only a few companies stated that AI is              than the rest. They focus less on the
                                                                      not currently an important topic at any             technology itself and more on the busi-
                                                                      level of the organization - while the               ness problems that AI can addresses.
                                                                      vast majority of companies view AI as               Relatively speaking, the AI topic seems
                                                                      generally important regardless of how               to not yet having reached the same
                                                                      advanced they are, or how much AI is                level of importance at the non-mana-
                                                                      being considered for deployment in                  gerial level (employees) than at the top.
                                                                      the near future.

There is a lot of hype surrounding AI at the moment, and few
doubt its potential. We examine how important is AI compared to
other digital priorities and where AI fits on the strategic agenda.   AI is an important topic on the C-suite level in particular
                                                                      On what hierarchical levels in your company is AI an important topic?                                           AI is in particular an im-
                                                                                                                                                                                    portant topic at the Execu-
                                                                                                                                                                                       tive Management level

We look at the impact of AI on the company’s core business, as
                                                                      S T R AT E G I C L E V E L

well as adjacent and new areas of business.                                 Board
                                                                            of Directors                                                                                     38%

We also examine the current AI maturity levels across sectors and           Management

markets, the potential drivers for deploying AI, and where AI is
                                                                            Managerial                                                                                       56%
applied within organizations, across customer-facing functions,             level

operations, product development, and internal business support.             Employee
                                                                            (non managerial                                                                                  28%

                                                                      O P E R AT I O N A L L E V E L

                                                                             Affirmative responses, 15 European markets

26                                                                                                                                                                                                                 27
Role of AI in European Business                                                                                                                                                                                                                                     Role of AI in European Business

Among Friends                                                                                                                                    Push or Pull
What is the importance of AI against other digital priorities?                                                                                   How is AI predominately deployed into the organizations?

                                                                                                                                                 To understand the drivers behind             AI deployed and managed in a balanced way
In a business era driven by innovation        The participating companies are gen-                                                               the adoption and deployment of AI            How would you characterize the way AI is being managed in your com-
and tech-led disruption, AI is obviously      erally in the process of understanding                                                             in the companies, we took a closer           pany? How would you characterize the way AI is being deployed in your
not the sole priority.                        the potential of existing data, includ-                                                            look at how AI is approached in a top        company?
                                              ing to what extent it can be used,                                                                 down-bottom up management con-
AI as a digital priority                      what it can be used for, and how to                                                                text, and from a functional tech- vs.
When asked on a scale of 1 to 5 how           capture and leverage it.                                                                           business driven dynamic.
important AI is to the business relative
to other digital priorities, the majority     Furthermore, many of the companies                                                                 AI driven from a combination of top                                      Top Down                    Bottom up                 Both
of respondents told us that it is about       are focused on building the appropri-                                                              down and bottom up
equal. Very few organizations said it         ate data infrastructures or modern-                                                                Contributing companies are quite
was their most important digital priori-      izing legacy systems as a top digital                                                              evenly split across deploying AI as a
ty, or not formalized as a digital priority   priority, both being prerequisites                                                                 top down process, as a bottom up, or
at all, with the spread of responses          for introducing AI into the company.                                                               as a combination of the two. However,
leaning slightly towards the upper end        Considering that AI is heavily reliant                                                             when looking at the self-reported most

                                                                                                                                                                                             Deployment Approach
of the importance spectrum.                   on data as its fuel, this development                                                              advanced companies, they are more
                                              suggests that the foundations are                                                                  top down than bottom up in their ap-                                        34%                          29%                   28%
This slant is likely to increase as many      being laid for further AI integration in                                                           proach. It was clear from speaking with
companies expect AI to become more            the years to come.                                                                                 them, that this is partly a result of AI
important, as the technology develops                                                                                                            being increasingly important enabler in
and use-cases become more clear to                                                                                                               the company, and playing an increas-
                                                                                                                                                                                                                        Business Pull                   IT Push                 Both
companies.                                                                                                                                       ingly significant role in the the overall

                                                                                                                                                 AI driven from a combination of
                                                                                                                                                 technology push and business pull
                                                                                                                                                 According to a large part of the com-
                                                                                                                                                 panies and despite still being a techni-
                                                                                                                                                 cally complex thing that requires many                                      24%                          23%                   45%
AI is seen as one of many digital priorities - but rarely the most important
                                                                                                                         The majority consider   specially skilled employees, AI is most
How important is AI relative to your company’s other digital priorities?
                                                                                                                            AI to be important   often deployed as a combination of
                                                                                                                                                 business pull and technology push.

                                                                                                                                                 This resonates well with one of the                                  15 European markets
                                                                                                                             Avg. Score          most consistent inputs from the execu-
                                                             44%                                                                                                                                                   Note: Remaining percent ‘Don’t know’ responses
                                                                                  28%                                                            tives on the most sought after AI pro-
               9%                 12%                                                                                            3.1             files which centered in on the hybrid
                                                                                                                                                 profile that understand the business
                                                                                                                                                 needs and the ability to match them to
                                                                                                                                                 the technological possibilities.
              1                   2                      3                    4                          5

      Not important                                 Important                                     Most important
     AI is not formalised                        AI is one of many                            AI is the most important
     as a digital priority                        digital priorities                                digital priority

       15 European markets                                                  Note: Remaining percent ‘Don’t know’ responses

28                                                                                                                                                                                                                                                                                              29
Role of AI in European Business                                                                                                                                                                                                              Role of AI in European Business

Ready, Set...
                                                                                                                          TMT sector with largest percentage of companies that are either released or advanced
                                                                                                                          How would you describe your company’s general AI maturity? Sectors arranged by maturity based on Advanced and Released

What is the maturity of AI in different sectors?

                                                                                                                                             TMT     2%     10%                              40%                                         45%                               2%

                                  While working with AI should be con-        the structure of existing data, collec-                    Services     5%
                                                                                                                                                       6%                22%                        27%                            27%                          18%
                                  sidered a continuous journey, the AI        tion of new data, and data access in
                                  maturity of surveyed companies pro-         general. However, the trend is clear:
                                  vides a tangible indication of the level    AI maturity is on the rise as adoption of                   Finance     4%            22%                             34%                                         36%                        4%
                                  of advancement of current initiatives.      key technologies accelerates and inter-
                                                                              nal capabilities grow.
                                  Multiple use cases, limited scalabil-                                                             Infrastructure    5%
                                                                                                                                                       9%            21%
                                                                                                                                                                       17%                          32%      46%                                         28%
                                  ity and advanced use                        The vast majority of European busi-
                                  The majority of companies have begun        nesses are currently either conducting
                                  exploring use-cases, while some com-        pilot projects to test selected use-             Industrial Products    4%             21%25%                                        53%44%                                      21%

                                  panies have made early investments          cases, or have commenced implement-
                                  with the intention of taking a leading      ing AI in the business. When talking
                                  position in AI. The levels of advance-      with executives, it is evident that many                Life Science    4%
                                                                                                                                                       7%                 25%                        45%              49%                               34% 17%            4%

                                  ment also vary in that some companies       companies are struggling with how to
                                  are focusing on narrow use-cases to         integrate pilot projects into daily op-
                                  support their existing business, while      erations.                                                       CPR                  25%                             29%                            29%                      9%         9%

                                  others are taking an explorative ap-
                                  proach. Among the small group of            Clear sector patterns, with TMT,
                                  companies with no or only little AI         Services, and Finance on top
                                                                                                                                                     0%                    20%                     40%                      60%                   80%                      100%
                                  activity to date, several respond that      Companies currently leading the way in
                                  they are planning to drastically ramp       terms of AI maturity are in TMT, Servic-
                                                                                                                                                            None                   Planned                 Piloting               Released                     Advanced
                                  up efforts soon.                            es & Hospitality, and Financial Services.
                                                                              Companies in those sectors gravitate
                                  Technology immaturity and internal          towards grading their AI maturity as
We have multiple sources
                                  data quality are key obstacles              ‘Released’ (AI in active use, though
of ideas for AI. They can                                                     selectively or not with very advanced
                                  Many companies that have already                                                        This indicates slower technology                     ‘Advanced’ stage of AI maturity.
come from the business            implemented AI initiatives in their         tasks), or ‘Advanced’ (AI actively con-     adoption lead times in these slight-                 Several companies in both Consumer
but also from data science        businesses are seeing tangible benefits.    tributing to many processes and en-         ly more conservative sectors. Yet,                   Products & Retail and Services & Hos-
                                  Consequently, many of them are ex-          abling advanced tasks). A logical ex-       with 74% of companies being in the                   pitality cite the challenges of knowing
teams presenting different
                                  ploring more use-cases and structuring      planation for the maturity in TMT and       ‘Piloting’ or ‘Released’ phases, the                 what relevant AI technologies are avail-
possibilities in a proactive                                                  Finance is their tendency to be digitally
                                  their learnings from previous AI pro-                                                   Infrastructure sector also seems to                  able, utilizing unstructured data, as well
approach, as these are new        jects into a modus operandi that can        advanced and more savvy with analyt-        be evolving onto more advanced AI                    as affording the payback period where
skills within the company.        speed up new initiatives.                   ics, favoring these companies to pro-       maturity.                                            there may be large upfront costs and
                                                                              gress beyond piloting by having data                                                             undetermined returns on investment.
At the end, there has to be
                                  Meanwhile, a substantial number of          science capabilities in place to evolve     Life science and CPR have fewest
agreement between both                                                        towards more advanced AI stages.
                                  companies have intentionally chosen to                                                  released projects
groups to sign off on AI          take a ‘follower’ position, reporting the                                               Consumer Products & Retail compa-
projects.                         perceived immaturity of AI technolo-        Infrastructure and IP with relatively       nies have a broad spread in terms of AI
                                  gies as a key reason. Another reported      many projects in ‘piloting’ phase           maturity, where 25% state they have
                                  obstacle to rolling out broader AI          The Infrastructure and Industrial Prod-     no plans at present for how and when
—Tetra Pak                                                                    ucts sectors both stand out as having
                                  initiatives are rooted in data and data                                                 to use AI – much higher than other
  Food processing and                                                         no companies responding that they are
                                  infrastructure, where companies have                                                    sectors – while others in the same
  packaging                                                                   ‘Advanced’ in AI at this stage.
                                  separate projects aimed at improving                                                    sector are already at the ‘Released’ or

30                                                                                                                                                                                                                                                                          31
Role of Ai in European Business                                                                                           Role of Ai in European Business

AI Maturity Curve
Majority of companies are in the ‘Piloting’ or ‘Released’ stage
We asked companies to self-report their current AI maturity level, grading themselves at None,
Planned, Piloting, Released, or Advanced - as defined below.


Advanced                                                                                                               10 / 269
AI is actively contributing to many
processes in the company and is
enabling quite advanced tasks                                                                                74/ 269

AI is put to active use in one or
                                                                                                 106 / 269
a few processes in the company,
but still quite selectively, and/or
not enabling very advanced tasks

Piloting                                          59 / 269
AI is put to active use, but still
only in early stage pilots

                                      20 / 269
AI is being planned, but not yet
put to active use, not even in
early stage pilots

Not yet
about AI

      15 European markets

32                                                                                                                                                    33
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