Recommendations: Turning Europe’s AI momentum into global leadership
Europe stands at a pivotal moment in its AI journey. Adoption is accelerating across businesses and citizens alike, yet too few organisations are progressing beyond basic experimentation into the advanced, transformative use of AI that drives productivity, innovation, and global competitiveness.
The next phase of the AI era will be led by countries and regions that remove challenges to adoption fastest, scale innovation most effectively, and enable businesses to deploy advanced AI securely and confidently across their entire economy.
To convert Europe’s strong foundations into sustained leadership, policymakers must now focus on a new growth agenda for AI - one that prioritises speed, security and safety, scale, skills, and market integration.
The following three priority recommendations outline the enabling policies required to accelerate AI adoption, close the emerging digital divide, and position Europe as a global AI powerhouse.
1. Make the public sector Europe’s flagship AI adopter
Governments can accelerate AI diffusion, build trust, and unlock large productivity gains - yet legacy systems currently hold adoption back. Public sector transformation is one of Europe’s most powerful untapped AI accelerators.
Deploy AI across public services:
Systematically integrate AI to reduce administrative burdens, improve service delivery, and enable predictive, data-driven decision-making. This works to drive trust in these technologies and broader diffusion of the technology – 68% of businesses say they are most likely to increase their AI adoption when the public sector leads.
Harmonise international standards and digital public services across Member States:
Create common data standards, interoperable platforms, and shared digital identities so AI-enabled public services can operate seamlessly across borders - enabling cross-country innovation and improving citizen experience. Alignment with international standards should be prioritised to ensure interoperability between Europe and to strengthen the competitiveness of European firms. This should build on existing EU initiatives, including eIDAS, the European Digital Identity Wallet, and the Interoperable Europe Act, and ensure they are supported by adequate resources, including IT solutions and sustained investment that allow public administrations to fully harness the benefits of AI at scale, while ensuring high levels of data protection.
Share scalable AI solutions across Europe:
Europe needs a repository for proven public-sector AI tools that allows governments to reuse, adapt, and rapidly deploy high-impact solutions instead of rebuilding from scratch. This approach would accelerate transformation across member states while dramatically reducing costs and eliminating redundant development efforts.
Accelerate both public and private sector adoption through streamlined procurement:
Digitise, accelerate, and simplify public procurement processes so startups, scale-ups, and digital SMEs can deploy AI solutions across public services rapidly. Open, competitive procurement creates early demand and real-world validation for European innovators — transforming public sector contracts into a genuine launch pad for scaling across markets, rather than a closed shop for incumbent champions. This approach builds market momentum while ensuring governments access the best solutions available.
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Research shows many digital SMEs remain on the sidelines of public procurement – 43% never participate and almost half have dropped out mid-tender. Rectifying this could generate €117 billion in gross value added (GVA) and create 1.8 million SME jobs.
Impact: Faster and improved service delivery, reduced public sector costs, stronger citizen trust, and large-scale market demand for AI innovation.
2. Incentivise investment in AI technologies
Europe will not achieve economy-wide AI transformation without stronger investment signals and simpler growth conditions. Fragmented regulation, complex compliance requirements, and limited access to scale capital continue to delay deployment and deter expansion. To accelerate AI investment, regulatory clarity and access to finance must improve in tandem.
Unlock the potential of the digital single market by simplifying digital regulations to reduce compliance costs, removing overlapping requirements and ensuring harmonised enforcement. Reform size-based regulatory thresholds that discourage firms from scaling AI solutions and receiving investment, and promote data free flows with trust to promote digital cooperation and development.
Introduce government incentives, faster procedures for infrastructure development, including for grid connection and permitting, and growth credits tied directly to AI investment, workforce expansion, and cross-border scaling.
Standardise investment frameworks across Member States to unlock cross-border venture and growth funding for AI-driven companies.
Europe can harness public-private partnerships to provide early-stage startups with credits for key services, support industry-specific growth programmes, and help scale-ups build investor networks.
European businesses consistently cite funding complexity, slow approval processes, and fragmented programme structures as challenges to moving from AI experimentation to full-scale transformation.
Impact: Stronger investment flows, lower compliance costs, faster commercialisation of AI innovation, and improved investor confidence in Europe as a unified digital market.
Replace growth cliffs with growth
Unlock the potential of the digital single market by simplifying regulation to reduce compliance costs, removing overlapping requirements and ensuring harmonized enforcement. Reform size-based regulatory thresholds that discourage firms from scaling AI solutions and receiving investment, and promote data free flows with trust to promote digital cooperation and development.
Reward companies scaling globally from Europe:
Introduce government incentives, faster procedures for infrastructure development, including for grid connection and permitting, and growth credits tied directly to AI investment, workforce expansion, and cross-border scaling.
Create frictionless growth capital for AI scale-ups:
Standardise investment frameworks across member states to unlock cross-border venture and growth funding for AI-driven companies.
Encourage increased collaboration between government and business to improve access:
Europe can harness public-private partnerships to provide early-stage startups with credits for key services, support industry-specific growth programmes, and help scale-ups build investor networks.
Simplify and speed access to EU digital and innovation funds:
European businesses consistently cite funding complexity, slow approval processes, and fragmented programme structures as barriers to moving from AI experimentation to full-scale transformation.
3. Build AI readiness
Increasingly, the greatest constraint on advanced AI adoption is capability rather than access to technology. Without AI-literate leadership, technical expertise, and workforce readiness, businesses remain limited to low-impact use cases. Additionally, businesses should carefully develop their AI strategy and data governance with an approach of “responsible by design”, to ensure they are using the technology to its full potential, safely, and securely. In the AI economy, skills and organisational capability are prerequisites for advanced use. Given only a quarter (24%) of businesses have a responsible AI strategy or framework in place, businesses must be supported to put responsible AI at the heart of their adoption.
Embed AI literacy across education systems:
Europe must integrate applied AI skills, responsible AI literacy, and data competencies into educational curricula or risk widening the already existing digital skills gap.
Accelerate AI workforce development:
Public-private partnerships for training can rapidly upskill both current employees and those new to the industry in AI deployment, governance, cybersecurity, and automation. Through accessible training and certifications public institutions and the private sector can work together to create pathways into tech careers while addressing the immediate skills shortages businesses face.
Target SME capability building:
Support applied training and advisory services to help small and medium-sized businesses adopt advanced AI systems. Targeted programmes should provide hands-on guidance for deploying AI in operations, customer service, and product development — ensuring business transformation extends beyond large enterprises to drive broader economic impact.
Strengthen business readiness to scale:
Support organisational capability with dedicated funds to support AI readiness (development of AI strategies, responsible AI governance, and data governance frameworks). Build government capacity and support the development of the internal expertise required for economy-wide AI integration.
Impact: A workforce and business base capable of deploying AI at scale, faster productivity growth and business transformation, and broader diffusion of advanced AI across the economy.