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Startups pioneering adoption

Startups are at the forefront of Europe’s AI revolution, driving innovation by adopting and integrating cutting-edge technologies into the heart of their mission, pushing boundaries of what technology can achieve both in business and society.

Leading the innovation charge
26% are using AI for advanced use cases, such as combining multiple AI models or creating

Startups are European leaders in AI adoption in both breadth and depth, with 26% using AI for advanced use cases, such as combining multiple AI models or creating their own custom AI system or app.

Startups also are notably optimistic about the potential impact of AI. 44% of startups say

Startups also are notably optimistic about the potential impact of AI. 44% of startups say they believe that AI will completely transform their business operations, compared to only 31% of large businesses.

Creating a supportive ecosystem

While European startups drive innovation with AI, they require specific support to unlock their full potential.

Startups require clear pathways to venture capital and funding options, with 56% of startups identifying it as a critical factor for faster growth.

Startups also look to the public sector as a key enabler of growth, with 35% citing public adoption of new technologies and innovation-friendly procurement policies as instrumental.

Also important to startups is an increased availability of specialised office spaces and research facilities (24%), enhanced technology-specific education programmes (21%), and more collaboration opportunities with established companies and leaders (21%).

High levels of education and a skilled workforce (64%).png

High levels of education and a skilled workforce (64%)

Strong legal protections for data privacy and security (59%).png

Strong legal protections for data privacy and security (59%)

Access to a large and diverse consumer market within the EU (48%).png

Access to a large and diverse consumer market within the EU (48%)

92% of startups believe Europe is highly competitive as a global startup hub compared to other regions, such as the US or Japan. The key features of the European landscape that make it competitive as a global hub for startups are:

Together, these factors create a thriving ecosystem where startups can fully realise their potential and contribute to Europe’s leadership in AI innovation.

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Given this, Europe is generally viewed as a competitive hub for startups, yet some hurdles remain:

Main obstacle to ai growth is a complex regulatory landscape (55%).png

A complex regulatory landscape (55%)

Main obstacle to ai growth is high operational and labour costs (55%).png

High operational and labour costs (55%)

Main obstacle to ai growth is high taxation on startups and tech businesses (45%).png

High taxation on startups and tech businesses (45%)

Those startups that found Europe uncompetitive reported three main obstacles to growth:

In order to continue driving growth and fostering European competitiveness, regulators and policymakers must focus on growing these strengths as well as addressing the limitations that are stifling competitiveness.

Startups reported that the UK was the European country with the most start-up-friendly business environment, closely followed by Estonia and Germany.

The critical role of partners in the AI journey

01. 

 

While 37% of adopters report that they source capabilities and expertise from internal development, almost a third (32%) work with external providers or consultants. The most common support provided by these external partners is more advanced AI capabilities (56%), improved cybersecurity (54%), and support with data handling (43%).

02.

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Adopters rely on partners to tackle key barriers to adoption, harnessing these external providers to train and upskill their staff (45%), support them with regulatory compliance (36%), and to address cost management and optimise solutions (33%).

35% of startups cite public sector adoption as critical for scaling..png

35% of startups cite public sector adoption as critical for scaling

78% of businesses overall say government AI adoption positively influences their own imple

78% of businesses overall say government AI adoption makes them more likely to adopt AI themselves

This figure rises to 92% among startups..png

This figure rises to 92% among startups

The public sector connection

Government adoption proves crucial for broader AI uptake:

This report demonstrates that public procurement plays a powerful role as a multiplier for technology adoption. Furthermore, the 2023 European Investment Bank (EIB) Investment Report notes that a key external factor shaping firms’ digitalisation is the extent to which governments and municipalities embrace digitalisation themselves - ‘this implies a coherent approach to digital governance, guided by the needs of people and firms.’[1]

  • shutterstock_2131003028.jpg

    xFarm Technologies is looking to digitalise farming with an AI-enabled app that is helping over 500,000 farmers across 100+ countries manage challenges like unpredictable weather and rising costs. Using AWS capabilities, xFarm processes vast amounts of agricultural data securely, enabling real-time decision-making for farmers. AI plays a crucial role enabling features like disease identification through photo analysis, predictive models for crop protection, and insect monitoring. The tech company aims to expand globally and its collaboration is key to scaling its business and working towards a more sustainable future for agriculture.

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    xFarm features in AWS Pioneers Project: a spotlight on the pioneers behind Europe’s groundbreaking innovations shaping the future of AI.

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