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1、Embracing the GenAI opportunityHow Europe can seize the vast potential of Generative Artificial IntelligenceStrategy&|Embracing the GenAI opportunity2ContactsAustriaDr.Matthias SchlemmerPartner,European Head of Data&AIStrategy&Austria+43-664-515-SwitzerlandDaniel Ettlin Director,Strategy&Switzerland

2、+41-79-636-6661daniel.ettlinpwc.ch GermanyDr.Philipp WackerbeckPartner,Global Head of Financial Services Strategy&Germany+49-170-223-Martin B.RietzelSenior Manager,Strategy&Germany+49-160-225-About the authorsDr.Matthias Schlemmer is a Partner at Strategy&Austria.Being the European Head of Data and

3、AI for Strategy&,he is also a member of the Retail and Consumer as well as Technology Strategy practices,with a focus on digital transformations and deep expertise in data analytics and artificial intelligence.He brings extensive program and project experience in various cultural environments for bu

4、siness strategy,operating model,organizational transformation,logistics,IT strategy,and digitization.His clients include European technology players,retailers and global consumer goods companies.Dr.Philipp Wackerbeck is a Partner at Strategy&Germany,based in Munich.As the Global Head of Financial Se

5、rvices for Strategy&and PwCs EMEA Banking&Capital Markets Leader,he regularly advises clients on important strategic projects like growth and market entry strategies,reorganizations,large-scale transformations and particularly in deals related projects including M&A,carve outs and debt and equity tr

6、ansactions.Additionally,he has in-depth knowledge in the risk,capital and regulations space.Daniel Ettlin is a Director at Strategy&Switzerland.As a member of the financial services practice,he covers a wide range of topics including Wealth and Asset Management,Corporate Banking and Fintech.Having s

7、pent two years with PwC Singapore,Daniel is also familiar with the Asian banking landscape and supports clients in their growth ambitions across the region.His financial services experience is complemented by in-depth expertise on macroeconomic and geopolitical trends and their implications for comp

8、anies.Martin Rietzel is a Senior Manager at Strategy&Germany,based in Munich.Being a member of the financial services practice,he focuses on capital markets,asset management,market infrastructure providers,and tech firms generally.He advises clients on strategic and operational matters at the inters

9、ection of financial markets,technology,as well as the global macro context.Further contributions to this study were made by Julia Burger,Carolin Eiting,Tobias Kalsbach,Svenja Kirsch,Katrin Wagner,and Annabelle Kliesing.Embracing the GenAI opportunity|Strategy&3The GenAI decade1 Scope=EU+Switzerland+

10、Norway2 Source:S&P Global real GDP forecast(January 2024)This report explores how Generative AI(or GenAI)will reshape businesses and economies in Europe over the course of this decade.We believe that GenAI is one of the most significant technologies of the era,and the present decade will be defined

11、by GenAI-driven advances.The opportunity is huge:our analysis shows that overall,GenAI has the potential to raise annual GDP growth in Europe1 by between 0.4%and 0.7%by 2030,representing a substantial uplift in a period where growth unadjusted for AI effects is forecast to be only around 1.4%.2 GenA

12、I could furthermore help contain Europes structural shortage of skilled labor,while conferring both short-term and long-term competitive advantages on companies that successfully adopt GenAI at speed.Against that background,we identify the industries and individual countries most exposed to the oppo

13、rtunities as well as the risks of GenAI,and the strategies and public policies most likely to foster a benign,growth-oriented implementation of GenAI capabilities in business.Understanding this technology and its implications is not a choice for leaders,but a necessity.EXECUTIVE SUMMARYStrategy&|Emb

14、racing the GenAI opportunity4The power of GenAITo understand the power and impact of GenAI we need first to comprehend the inherent advantages of this transformational iteration of AI technology.In practice,the key characteristic of GenAI is that maximum benefit can be gained with minimal knowledge

15、of AI in contrast to Machine Learning and Deep Learning.GenAI can be used without any specific AI or even computing skills,and can respond to ambiguous inputs to create both quantitative and qualitative outputs.Put simply,GenAI can answer the kinds of questions a non-specialist human might ask,and g

16、enerate an output that includes pictures and audio as well as text in any language.More sophisticated in terms of output than any previous automated intelligence and learning application,yet simpler in terms of usability,GenAI is a true turning point in terms of range,adaptability,and user-friendlin

17、ess(see Exhibit 1).Critical new technologies have always boosted GDP.Since the introduction of mechanization to agriculture in the 18th century,such technologies have either been enablers of greater automation or automation innovations themselves.GenAI has been called the automation of automation,pr

18、omising a step-change in industrial productivity.HighRequired level of AI expertise for usageGenAIBusiness intelligenceSophistication of AI modelsHighDevelopment of AI sophistication and required expertiseMachine learningDeep learningSource:Strategy&analysisEXHIbIT 1 Overview of GenAIEmbracing the G

19、enAI opportunity|Strategy&5GenAI in action:who wins?The arrival of GenAI as an accessible technology across all sectors of the economy is likely to significantly improve innovation capabilities and business efficiency along the entire value chain.As a result,it will deliver even broader and more imp

20、actful productivity gains than other disruptive technologies in the past.The potential benefits of GenAI,however,are unevenly distributed across sectors.Therefore,implementation of the technology will tend to increase the value-added differential between different industries.Yet in all sectors,compa

21、nies can maximize the advantages of GenAI through careful assessment of internal use cases,seen through the lens of real-world productivity gains.In the GenAI decade,the technologys potential for different industries can be defined as high-impact(companies have the potential to accelerate the develo

22、pment of the GenAI family of technologies and achieve rapid impact both on revenues and bottom-line performance);GenAI-aspirant(companies can capture new efficiencies from GenAI applications developed largely outside their own domain,with impact on the bottom line);and low-potential(physical labor o

23、r production dominates the value chain and automation,supplemented in part by GenAI,can make a notable but lower contribution to productivity if implemented effectively)(see Exhibit 2,next page).For industries with lower impact potential,there might be a risk of missing the boat and being slowly but

24、 steadily overtaken by competitors.For high-impact industries,the challenge is that true business model disruption may occur and companies are either able to keep up,or find themselves out of business quickly.Either way,they need to closely monitor the movements of their peers.GenAI will deliver eve

25、n broader and more impactful productivity gains than other disruptive technologies in the past.”Strategy&|Embracing the GenAI opportunity615%10%5%0%GenAI high impact acceleratorsTechnology and softwareProductivity potentialEntertainment and mediaPharma and life sciencesFinancial servicesProfessional

26、 servicesTelecommunicationsSupport servicesHealth careReal estateChemicalsHigh-tech manufacturingAutomotiveConstructionUtilitiesFreight and transportationAgricultureIndustrial manufacturing2Public sector1Passenger transport,travel,hospitalityConsumer goods and retail(non-food)Consumer goods and reta

27、il(food)GenAI aspirantsGenAI low potentialsRange of lower and upper productivity potential1 Including public admin.and other services,defense and education 2 Including mining and quarrying Source:Strategy&analysisEXHIbIT 2 GenAI potential by industryEmbracing the GenAI opportunity|Strategy&7This is

28、the real worldGenAI is a logical extension of the Predictive AI technologies that many companies have already implemented in their business processes and customer-facing operations.It is not a bolt from the blue,so comes as no surprise that real-world use cases are already being translated into the

29、working machinery of business.In some cases,these GenAI implementations remain next steps;in others,they are already operational.And the cross-industry nature of GenAI applications is already apparent.In financial services we observe significant GenAI impacts on client services in wealth management.

30、GenAI is well adapted to streamline the onboarding process,personalize wealth management products and deliver high-value investment advice,leading to greater efficiency for relationship managers and an enhanced customer experience(see Exhibit 3).Investment advice and portfolio managementTailored por

31、tfolio and investment advice;revenue growth through more relevant and timely advice5%Relationship management and client journeyImproved client experience and efficiency for Relation-ship Manager,personalized touch points;efficiency gains through improved meeting prep20%Client servicingStreamlined re

32、sponses/solutions for simple queries ensuring consistent support services;efficiency gains through automated servicing20%Client onboardingAutomated KYC screenings,contract creation,personalized onboarding support;efficiency gains through automated processes10%Business development and marketingPerson

33、alized offerings for banking solutions,cross-selling opportunities with existing clients,personalized marketing campaigns for new clients$Applications in wealth managementGenAI use casesCustomer experienceVirtual assistants/intelligent chatbots,expedited client onboardingProduct personalizationCusto

34、mer profiling and personal-ized product recommendationsInvestment performanceOptimized portfolio of asset allocation strategies,enhanced investment researchFraud prevention and risk managementIdentification of potential risks(e.g.fraudulent activities and compliance breaches)Operational excellenceEx

35、pedited middle/back office processesNet new money increase%efficiency gains%revenue growthSource:Strategy&Asset Management Study(2023);Strategy&analysisEXHIbIT 3 GenAI-empowered client servicing assistance in wealth management use cases7Embracing the GenAI opportunity|Strategy&Strategy&|Embracing th

36、e GenAI opportunity8In life sciences GenAI has the potential to revolutionize drug discovery.Faster and more comprehensive R&D in protein molecule research is already a reality:a GenAI algorithm generates detailed understanding of individual amino acids,their functionality and interaction in complex

37、 molecular proteins.This methodology enables discovery of new molecules and targeted drugs.Together with better personalization of treatment plans,the tailoring of therapy to specific cancer types,earlier diagnosis based on medical data patterns and individual case data,there is an unprecedented inc

38、rease in the body of underlying biochemical knowledge underway.Besides top-line growth,GenAI also leads to faster innovation and drug development in a more effective way than conventional R&D(see Exhibit 4).Strategy&|Embracing the GenAI opportunity8AI training phaseSpecific effect to target cancer c

39、ellDesired effect on cancer cellAI identifying correct amino acidGenAI language model fed with amino acid data to learn how to form functional molecular proteins to target cancer cellsGenAI applies its learnings to identify the correct amino acid combination to effectively target cancer cells(new dr

40、ug)=amino acidxNew drug development phase using AIAXCDQFDAQBEDABCDQFDACBA?Source:TUM School of Computation,Information and Technology,PredictProtein;Strategy&analysis EXHIbIT 4 GenAI-driven R&D to enable targeted and tailored cancer treatmentIn manufacturing we expect R&D,process,and customer experi

41、ence benefits from GenAI applications,which are already speeding up product development and time-to-market,leading to significantly lower R&D costs.GenAI will also bring about reductions in average handling times,more efficient issue resolution,and improved customer satisfaction particularly through

42、 the development of features such as richer connected car applications and services in the automotive industry(see Exhibit 5).9Embracing the GenAI opportunity|Strategy&Research and developmentProductionGenAI systems provide code-free and ongoing testing and scenario simulation in vehicle software de

43、velopmentComputer vision systems based on GenAI monitor production processes and allow for real-time tracking of assets and more comprehensive installation team dataAftersalesConnected servicesGenAI-based chatbots and virtual assistants improve the customer support experience with greater availabili

44、ty,faster responses and fewer human mistakesIn-vehicle personal assistants based on GenAI offer personalized and fast support while improving overall experience and comfortSource:Strategy&analysisEXHIbIT 5 GenAI-driven R&D,manufacturing and customer experience impact in automotiveIn the information

45、and communications technology(ICT)sector GenAI has the potential to foster services that are better tailored to local markets,enabling the building of end-customer specific tools,improved review of input data,and enhanced privacy and IP protection.Body textSECTION NAMEStrategy&|Embracing the GenAI o

46、pportunity10Large European ICT provider builds GenAI business modelGenAI is already driving the creation of new businesses that take on the role of GenAI intermediaries between Big Tech and end-user companies.This is exemplified in the case of a large European ICT provider that partnered with a US c

47、hip manufacturer to develop a GenAI suite tailored to a range of B2B needs.This company invested in more than 30 GenAI innovations to build a new generation of products that are relevant to the local business context and regional language specifics.The ICTs GenAI intermediary business model is to cr

48、eate a Trusted AI Factory with products tailored exactly to an otherwise under-served market,and act as a bridge between users and Big Tech providers and as a knowledge source for local business customers.(see Exhibit 6).Intermediary business modelsApproachCustomer solutionsCustomized solutions enab

49、le SMEs to use internal data and integrate AI tools into their firms protected IT environment The Trusted AI Factory offering is expected to enable further growth of the ICT providers increasingly important B2B solutions businessBig Tech playersBenefitsBig Tech playersICT providerICT providerSME cus

50、tomer 2SME customer 1SME customer xSME customersTailored to local marketPartnership for custo-mized GenAI solutionsA large European ICT provider teamed up with a US chip manufacturer to become a Trusted AI Factory for local SME customers,offering for example Local languages Trustworthy local databas

51、e Local computing and data storage infrastructure to provide tailored tools to SME clientsEnd-customer specific toolsVisibility of underlying modelInclusion of internal data setsPrivacy and IP protectionQuality review of input dataSource:Strategy&analysisEXHIbIT 6ICT Trusted AI Factory intermediarie

52、sCASE STUDY10Strategy&|Embracing the GenAI opportunityEmbracing the GenAI opportunity|Strategy&11Country impactsCountry by country,the GenAI advantage is structuralThe industrial structure of individual economies shapes outcomes in the GenAI era.Countries with economies heavily skewed toward high-im

53、pact industries including technology,entertainment,life sciences,and financial and professional services,as well as ICT,are positioned for large productivity and top-line revenue gains through successful implementation of GenAI in their businesses.Countries where low-and medium-impact businesses pre

54、dominate,such as agriculture,utilities,construction,manufacturing,retail and support services,can also benefit from the implementation of GenAI,although the impact is less likely to be transformational(see Exhibit 7).Businesses that perform high levels of data collection and processing have a head s

55、tart in the race to maximize GenAI benefits.The share of high-impact,high-potential business in the total economy is on average higher in the US and UK than in the EU.Embracing the GenAI opportunity|Strategy&11Continental Europe1Selected continental European countriesSelected global benchmarksHigh i

56、mpact GenAI acceleratorsGenAI aspirantsGenAI low potentials21%19%37%44%21%43%36%17%44%39%25%37%38%27%37%36%17%32%51%24%41%34%24%42%34%17%41%42%18%27%55%40%39%Contribution to GDP of respective group of industries1)European Union plus selected non-EU economies(Switzerland,Norway)Source:S&P Global,Stra

57、tegy&analysis1 European Union plus selected non-EU economies(Switzerland,Norway)Source:S&P Global,Strategy&analysisEXHIbIT 7 Exposure to industries in terms of contribution to GDP EU and selected countriesStrategy&|Embracing the GenAI opportunity12However,it is characteristic of GenAI,with its poten

58、tial applications across the entire economic value chain,that benefits are governed by the level of corporate understanding and creativity as much as by the nature of individual businesses.This means that outcomes can be altered by supportive corporate strategies and public policies.Based on an anal

59、ysis of use cases along the value chains of more than 20 industries,we estimate the potential for GenAI-driven increases in top-line growth and operational efficiency across the EU and several comparator countries.It can be seen that many countries with large industrial sectors remain significantly

60、behind the leaders in terms of GenAI impact (see Exhibit 8):Selected European countriesOther countries for comparisonCountries with a significant share of GDP from industries with less to gain from GenAI(for example agriculture,industrial manufacturing,and construction).Selected smaller industries m

61、ay have started to leverage GenAI,but structural barriers and digitization deficits need to be addressed to enable broader GenAI adoption.Focused GenAI beneficiariesCountries whose current industry structure is well suited to realize GenAI-driven productivity and innovation gains.Immediate GenAI ben

62、eficiaries 10%Additional GDP growth potential until 2030(in%p.a.)Exposure to high-impact GenAI accelerators(in%of GDP)0.65%0.70%0.75%0.80%15%20%25%30%Countries in which industries with interme-diate or moderate GenAI potential(e.g.,consumer goods and retail,travel and hospitality,health care)contrib

63、ute a greater share of GDP.Further digitization and targeted innovation along value chains may be required to accelerate GenAI adoption and narrow the gap with immediate GenAI beneficiaries.Adapting GenAI beneficiaries Immediate GenAI beneficiaries Adapting GenAI beneficiaries Focused GenAI benefici

64、ariesGreecePortugalAustriaPolandSpainJapanItalyChinaCanadaGermanyFranceEUNetherlandsUKUSSwedenBelgiumSwitzerland1 Total additional yearly GDP growth potential on top of current projections until 2030 in an ambitious scenario that assumes widespread application of GenAI with respective productivity g

65、ains Source:S&P Global;Strategy&analysis EXHIbIT 8 Country comparison of GenAI-driven yearly GDP growth potential(ambitious scenario)Embracing the GenAI opportunity|Strategy&13Size of the prizeThe trillion-dollar questionOur analysis suggests that the implementation of GenAI across the economies of

66、continental Europe has the potential to increase annual GDP growth rates by 0.4%to 0.7%between now and the end of this decade.The higher end of this range is equivalent to roughly 1 trillion USD in 2030,a massive boost to GDP in an era of historically low growth,which is currently forecast to be bel

67、ow 1.5%between now and 2030.We have derived two implementation scenarios to map the effects of GenAI,in addition to a no-change base scenario(see Exhibit 9,next page):Scenario 1Under this best-case scenario,Europe will see high-impact accelerator businesses take an increasing share of the economy,an

68、d 80%to 90%of potential GenAI-driven productivity gains will be achieved by 2030.This scenario assumes that companies are receptive to GenAI innovation and adopt GenAI strategies.They also need to be willing to make the required investment(which may only generate a return after some time)and take th

69、e risks associated with the new technology.We further assume that public policy and regulation becomes broadly supportive of implementation in Europe.Total impact:an additional 0.7%GDP growth.Scenario 2Under this moderate-case scenario,Europe has only limited success in attracting or developing more

70、 high-impact accelerator businesses,and no more than 40%to 50%of potential productivity gains are realized by 2030.The moderate case will see companies constrained by skills and funding shortages,and a lack of regulatory clarity or proactive public policy on GenAI.Total impact:an additional 0.4%GDP

71、growth.GenAI has the potential to boost European GDP growth rates by 0.4%to 0.7%p.a.between now and the end of this decade an additional GDP of roughly 1 trillion USD in in the best case.”Strategy&|Embracing the GenAI opportunity14Base caseEuropean GDP growth forecast until 2030 based on S&P Global1

72、.Ambitious:Widespread application of GenAIEffective implementation of GenAI across companies value chains,achieving an assumed 80-90%of GenAI-driven productivity potential by 20303(thanks to factors including openness to innovation,a clear GenAI strategy,or attractive location factorts).Intermediate

73、:Moderate application of GenAILimited realization of GenAI benefits along value chains,achieving an assumed 40-50%of GenAI-driven productivity potential by 20303(given limited capabilities,insufficient access to talent,or regulatory unclarities).20002000-20102010-2019Forecast 2023-20302019-2023Base

74、caseGDP 2030(USD 19.4tr)GDP in USD trBase caseGDP 2023(USD 17.5tr)152020101.6%1.4%-0.5%2019Projections vs.base case consider the potential for additional GDP growth driven by GenAI assuming that companies and government take dedicated measures to adopt GenAI in an effective manner.20232030CAGRDelta

75、vs.Base caseCAGR2023-30Illustrative scenario analysisScenarios and underlying assumptions1.0%2.1%1.8%1.4%+USD 960bn+0.7%+USD 470bn+0.4%(Base case1)1 Forecast of real GDP based on S&P Global(January 2024)2 European Union plus selected non-EU economies(Switzerland,Norway)3 Linear increase of GenAI pot

76、ential until 2030 assumed Source:S&P Global,Strategy&analysisEXHIbIT 9 Impact of GenAI potential on continental Europes GDP growth Embracing the GenAI opportunity|Strategy&15The global context The prospects for a GenAI revolution in Europe need to be seen in the context of differing policy assumptio

77、ns and implementation capabilities across Europe,the US andChina:The US:innovation leaderThe US is the clear innovation leader in the GenAI field,with GenAI implementations driven by a cultural bias toward rapid innovation and supported by a decentralized and outcome-oriented policy approach distrib

78、uted across several federal agencies.The US also benefits from an unparalleled ecosystem of large tech providers complemented by fast-moving start-ups,and a ready supply of new technology funding.China:centralized and state-directed China is pursuing a centralized approach designed to shape all AI d

79、evelopment across the economy,with state control paramount but supported by strong public perceptions of technological progress as beneficial.While GenAI innovation is mainly driven by the US,Chinese companies are fast-adopters and tend to quickly integrate GenAI into their products and daily life a

80、pplications.Europe:risk-based approachEurope is taking a risk-mitigation approach to GenAI.This is designed to balance individual rights with AI priorities,an approach embodied in the EU AI Act,which has the potential to become a de-facto regulatory baseline for GenAI.Europe has the advantage of hig

81、h-quality research institutions and a track record of collaborative approaches to innovation but lacks true Big Tech champions.Strategy&|Embracing the GenAI opportunity16Ten success factors for a smooth and effective GenAI transitionTo capture maximum benefit from the GenAI decade,there is an urgent

82、 need for European companies and governments to review and extend their strategy and policy approaches to GenAI in the following key dimensions:Corporate openness toward innovation and transformation1.Demonstrate skin in the game and lead the changeCompany executives should put GenAI at the top of t

83、he strategic agenda and commit to make the required investments even though the effective gain from the nascent technology may be hard to assess upfront and the bottom-line impact may only be clear at a later stage.They should raise awareness of GenAI throughout the company and involve employees in

84、developing use cases and tools.Dedicated GenAI training should be delivered across the entire organization as a greater number of employees not only in IT,but also those in business functions need to understand how to enable and embed GenAI in their key activities.This is a major contrast to prior t

85、echnological innovations.Employees should understand the technology behind GenAI and be enabled to assess its benefits and risks.They need to be familiarized with the tools relevant for their daily work and the purpose of these applications.Client advisors at banks,for instance,should be clear about

86、 questions such as“Will GenAI help me improve interaction with my clients and generate more sales?”or“Will it lead to efficiency gains in my daily routine and save me 10%,20%or even 30%of my time?”2.Leverage the GenAI ecosystem to accelerate your GenAI journeyPartnerships with global GenAI behemoths

87、 or specialized start-ups could help companies accelerate implementation and enable them to reap the fruits of GenAI investment early on.Smaller companies lacking scale and in-house expertise to develop their own tools could partner with ICT companies acting as GenAI intermediaries to develop tailor

88、ed country-and company-specific GenAI solutions.Less tech-enabled industries with limited GenAI know-how and only few best practices,such as the hospitality and tourism sector,could benefit from GenAI intermediary partnerships.Embracing the GenAI opportunity|Strategy&17Funding and investment3.Evalua

89、te each GenAI projects P&L impact early on and channel investmentCompanies are advised to assess the impact of GenAI on their business model and funnel funds to areas where the technology promises highest bottom-line impact.Companies in innovation-driven sectors could use GenAI for new product devel

90、opment with the goal of shortening innovation cycles and moving ahead of competitors in the race for new products.Aiming to deliver minimum viable products and prototypes which enable quick-wins would allow executives to assess P&L impact early on and direct investments toward the most promising pro

91、jects.4.Public commitment and dedicated investment vehicles are key to attracting private funds Governments are encouraged to join forces with leading financial services players to launch dedicated AI transformation investment solutions that allow institutional investors and wealthy individuals to i

92、nvest in the GenAI opportunity.Initial seed money from governments could demonstrate their commitment and help attract further venture capital and other private funds.5.Invest funds without falling into the subsidy trapGovernments should refrain from providing financial incentives and subsidies to i

93、ndividual GenAI accelerator firms,to avoid lock-in situations or write-offs if the companies fail to deliver their GenAI promise.Instead,governments should direct funds to raise location attractiveness,for example by building dedicated GenAI innovation clusters that attract GenAI ventures,leading hi

94、gh-impact accelerator companies and academic institutions,and start to create comprehensive GenAI ecosystems.If companies and governments fail to channel funding in the right direction,they risk diluting the expected 0.4%to 0.7%GDP boost and pay too high a price for a modest economic impact.Innovati

95、on and technology-friendly location factors6.Provide a nationwide state-of-the-art digital environmentBuilding up GenAI ecosystems to create national GenAI champions and attract foreign high-impact accelerators relies not only on sufficient capital and direct investments,but also on access to high-p

96、erformance computing power and cloud storage capacities.These ecosystems should not become digital islands.Instead,the entire economy will require a digital scale-up:administrative processes need to be streamlined and digitalized,and the availability of fast and reliable internet is a prerequisite f

97、or an attractive GenAI location.The risk of disruptive cyber-attacks should not be underestimated and calls for an effective defense strategy.Strategy&|Embracing the GenAI opportunity187.Involve and empower the populationA locations attractiveness does not end at the government and company level.To

98、build a sustainable and widely accepted GenAI-empowered economy,governments need to ensure buy-in from citizens.This includes education about the opportunities and risks of GenAI to address reservations about the new technology and allow people to use it for their benefit.Companies and governments s

99、hould also point out that in some industries,GenAI will be needed to overcome labor shortages and ensure continuous value creation.In other industries,the fear of job losses should be addressed through dedicated upskilling and industry-switching programs.A skilled and tech-savvy labor force will be

100、a key pillar of a successful GenAI-driven economy.Strategic,innovation-friendly,and actionable regulatory guardrails 8.Find a regulatory balance between technology openness and risk mitigationThe implementation of the recently adopted EU AI Act will have a big impact on how GenAI can create benefits

101、 for society and deliver the expected economic boost.We advocate a pragmatic approach that addresses societal concerns around privacy and data protection,and provides sufficient space for innovation and development of benign GenAI solutions.At the same time,regulation must impede the malign version

102、of GenAI.Given the rapid advancement of the technology,regulation should be flexible enough to anticipate or closely follow future developments.9.Ensure actionable regulatory guardrails and industry-specific standardsRegulatory standards should be defined jointly with industry representatives.They s

103、hould meet the industrys needs and susceptibility to risks.Smart and targeted documentation requirements and lean bureaucracy will make GenAI regulation applicable for large high-impact accelerators as well as smaller ventures.Start-ups should be relieved of regulatory over-complexity through a simp

104、lified approach that enables entrepreneurship and ensures location attractiveness for innovative ventures.10.Pursue a level international playing field and avoid falling behind global GenAI developmentThe EUs AI Act should be aligned with like-minded countries such as the US or Japan to ensure a lev

105、el playing field and develop an international technology coalition that seeks healthy competition and advocates common values.Europe should also align on a GenAI strategy that goes beyond regulation and defines how the continent aims to reap the benefits of the technology to strengthen Europes compe

106、titiveness and geopolitical position.A dedicated AI strategy body may be required to monitor further developments across the globe to foresee and identify new technological opportunities and spot potential threats early on.Embracing the GenAI opportunity|Strategy&19ConclusionGenAI is one of the defi

107、ning technologies of this decade.Only a clear strategy will enable European countries and companies to succeed in the global GenAI race and prevent them from falling behind on the competitive and geopolitical stage.Policymakers must make timely decisions about the appropriate use of public investmen

108、t to support GenAI implementation.Yet leaders must also acknowledge that GenAI is just one of multiple technological developments in this decade.They must not put all their eggs into the same basket and rather consider GenAI as one extremely powerful asset within the broader technology portfolio.The

109、 ultimate question for European economies and companies is whether they will be passively defined by GenAI,or actively define the impact of GenAI for their future.We believe that by following our 10 success factors,companies and governments will be able to embark on a smooth and successful GenAI tra

110、nsition,and make the most of the growth potential we have quantified in this Stay up to date Sign up here to receive the latest Strategy&thought leadership and industry trends 2024 PwC.All rights reserved.PwC refers to the PwC network and/or one or more of its member firms,each of which is a separat

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