European Artificial Intelligence Market Driven by the Need for More Efficient Operations and Enhanced Security, Says IDC
MILAN — The new Worldwide Artificial Intelligence Spending Guide (V1 2023) published by International Data Corporation (IDC) shows that artificial intelligence (AI) spending in Europe will reach $33.2 billion in 2023, representing 20% of the worldwide AI market. This is despite the current economic and political challenges, the war in Ukraine, rising inflation, IT budget cuts, and the layoffs announced by even the biggest tech companies.
AI spending in Europe will post a compound annual growth rate (CAGR) of 29.6% between 2021 and 2026, compared with the worldwide CAGR of 27.0%. Growth in Europe is being driven by Western and Central and Eastern Europe, with spending expected to reach more than $70 billion in 2026. Overall AI market growth will mainly be driven by software, which will represent nearly two-thirds of total spending in 2023.
“Companies recognize the business benefits they can gain from AI adoption, which include improvements to business operations, process optimization, efficiency, resilience, and decision making,” says Carla La Croce, research manager for IDC Customer Insights and Analysis.
Banking, retail, and manufacturing (discrete and process) are the biggest spenders on AI, followed by professional services. Together, these industries will account for more than half (55.5%) of total European AI market spending in 2023.
The need for enhanced security is highlighted by the two biggest use cases in Europe — augmented threat intelligence and prevention systems and fraud analysis and investigation — which are common not only to financial services industries (such as banking and insurance), but also to the public sector and more threat-exposed industries such as telecommunications, utilities, and transportation.
In banking, security is driving the adoption of AI solutions for fraud analysis and investigation as well as augmented threat intelligence and prevention systems. In retail, customer services are at the center of AI investments. Professional services organizations will invest the most in IT optimization to improve agility and enhance operational efficiency.
“European AI investments have proved resilient to disruptions, including the ongoing war in Ukraine,” says La Croce. “Industries are looking for use cases to enhance their security systems, guarantee operational efficiency, and provide high-quality services to customers.”
About IDC’s Worldwide Artificial Intelligence Spending Guide
