European spending on AI will exceed €10bn in 2021

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According to IDC, investment in AI has continued throughout the pandemic, but unevenly spread by sector.

IDC’s Worldwide Artificial Intelligence Spending Guide estimates that spending on AI will reach $12 billion (€10.17 billion) in 2021 in Europe and will continue double-digit growth until 2024.

The main drivers are automation, digital transformation and customer experience, and investment has continued despite many companies being hit hard by the pandemic.

Trigger for growth

In fact, “COVID-19 was a trigger for AI investments for some verticals, such as healthcare. Hospitals across Europe have deployed AI for a variety of use cases, from AI-based software tool for automated diagnosis of COVID-19 to machine learning-based hospital capacity planning systems," said Andrea Minonne, Senior Research Analyst at IDC Customer Insights & Analysis.

She continued, "On the other hand, other verticals such as retail, transport, and personal and consumer services had to contain their AI investments, especially when AI was used to package personalised customer experiences to be delivered in-store."

Many retailers shifted their focus from in-store AI towards AI-driven online experiences and services are shops were forced to close in lockdown and customers moved online, and not all of them will move back once the pandemic is over.

Retailers are looking closely at use cases such as chatbots, pricing optimisation and digital product recommendations to guarantee customer engagement but also secure revenues from digital channels.

Blow to mobile operators

Telcos are among those that have lost substantial income due to store closures, although arguably this has just accelerated a trend. CCS Insight found that in the UK, nearly two-thirds of people who bought a mobile phone in the UK in 2020 did so online. This compares with 52% in 2019 and 36% before that.

Mari-Noëlle Jégo-Laveissière, Deputy CEO Europe at Orange, told us in a recent interview (to be published in the magazine next week) that Orange is putting effort into moving sales forward across various channels, having suffered a drop in sales as a result of having to close stores during lockdowns across the continent. She is mindful that especial attention must be paid to logistics and customer experience, “So our relationships with customers are as efficient online as they are physically.”

Earlier this week, Orange announced it is setting up a Data and AI Ethics Council made up of 11 independent recognized experts. Chaired by Stéphane Richard, Orange’s Chairman and Chief Executive Officer, the role of this advisory and independent body is to support the company’s implementation of ethical principles governing the use of data and Artificial Intelligence technologies.