Unlocking Europe’s AI Potential in the Digital Decade 2025
Overview
This report represents the latest in our annual series examining Europe's journey toward realising the European Commission's Digital Decade and competitiveness goals through widespread artificial intelligence (AI) adoption.
Building on 2024’s report, which established AI's central role in Europe's digital transformation, and its great economic potential, our 2025 report analyses current adoption trends, barriers to implementation, and pathways to inclusive innovation.
About the study
As AI reshapes the global economy, Europe faces a crucial moment. The past year has witnessed widespread adoption of AI, popularised by generative AI and large language models (LLMs), with our research suggesting Europe could achieve near-universal business adoption of AI by 2030.
This report reveals that Europe is at a critical juncture. While businesses and citizens show growing enthusiasm for AI's potential, startups are ahead in driving innovation and business transformation with AI. In contrast, larger companies remain primarily focused on early experimentation and the lowest-hanging fruit of efficiency gains at the expense of deeper adoption. This divergence risks creating a two-tier AI economy that could limit Europe's potential to leverage the benefits of digital transformation, be a global leader, and simultaneously deepen the productivity gap that threatens its global competitiveness.
This report crucially builds on Mario Draghi’s report on The future of European competitiveness (2024) prepared for the European Commission, offering complementary insights into how digitalisation and AI can drive innovation and economic growth across the continent. By expanding on Draghi’s emphasis on digital transformation, upskilling the European workforce, and promoting an innovation-friendly landscape, this report highlights the critical role AI plays in achieving these goals and positioning Europe as a leader in the digital economy. This report also complements the aim of the EU Competitiveness Compass, which places competitiveness at the core of the mission for businesses and governments alike.
The findings presented here align closely with Ursula von der Leyen's vision for the European Commission's 2024-2029 term, which calls for a new European Prosperity Plan. This plan aims to boost competitiveness through digital transformation, research, and innovation, with key initiatives including an "Apply AI Strategy," a European AI Research Council, and a Union of Skills to address the digital skills gap.
Our research draws on independent studies conducted by Strand Partners, encompassing over 15,000 citizens and 15,000 businesses across the European Union, UK, and Switzerland. The breadth and depth of this research provides unprecedented insights into the state of AI adoption and its implications for Europe's future competitiveness.