The European Investment Bank (EIB) has highlighted broad underinvestment in blockchain technology and artificial intelligence.
According to a Reuters report Tuesday, the 27-bloc region lags behind the United States of America and China per investments in both technologies.
While both the US and China account for more than 80% of the 25 billion euros of annual equity investments in blockchain and AI, the E.U only accounts for about 7% or 1.75 billion euros of the total funds. Per the investment rate, the European Union notably has a shortfall of 10 billion euros ($12 billion) in both technologies.
“Companies and governments in Europe are substantially underinvesting in AI and blockchain compared to other leading regions, and it has become clear that the European Union struggles to translate its scientific excellence into the business application and economic success,” the bank said in a report.
The EU believes the duo of both technologies can help overhaul the primary sectors, which the COVID-19 pandemic has heavily hit. These sectors include the health and financial sectors, as well as in business intelligence, respectively. Despite recognising the shortfall in the financing, the EIB said the current market condition could make this gap widen more.
“EU and member state support schemes could plug part of the gap, but private markets will need to contribute the balance,” the bank said.
The EIB’s recommendation is coming when investors are generally enthused with American and Chinese markets. Some emerging tech firms and legacy institutions in Europe have favoured going public outside of the region, contributing to the build-up in the lack of investments in key emerging technologies. Besides these factors, the EIB highlights high upfront investment needs, lack of knowledge, and limited EU venture capital funds in both technologies.
On its part, the EIB is building a bond sale platform using blockchain technology.
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