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European spending on AI will reach $12 billion in 2021, according to analyst firm IDC.
With the coronavirus pandemic driving rapid digitalisation throughout the economy, the case for AI incorporation across numerous industries has increased steadily over the past year. Now, a new report by IDC says that spending on AI could increase to $12 billion this year, with double digit growth predicted to continue until 2024.
The IDC’s Worldwide Semiannual Artificial Intelligence Spending Guide focussed on the expected technology opportunity in the AI market in nine regions, comprising 32 countries, 19 industries, 28 use cases, and six technologies. Naturally, the report shows the major impact of the coronavirus pandemic, which has necessitated a major change in consumer behaviour and, in turn, that of various businesses.
As a result of increased digitalisation, AI implementation has seen a clear increase compared to previous years. However, the story of AI in 2020 was not one of runaway growth, but rather a period of uptake for key verticals, while others, like retail stores, have had to shift their use of in-store AI to an online environment.
"COVID-19 was a trigger for AI investments for some verticals, such as healthcare. Hospitals across Europe have deployed AI for a variety of use cases, from AI-based software tool for automated diagnosis of COVID-19 to machine learning-based hospital capacity planning systems," said Andrea Minonne, senior research analyst at IDC Customer Insights & Analysis. "On the other hand, other verticals such as retail, transport, and personal and consumer services had to contain their AI investments, especially when AI was used to package personalized customer experiences to be delivered in-store."
Below average growth in AI investment seems to be linked to those industries that have been hit hardest by the pandemic. The transportation sector, for example, has seen a major loss in revenue from the various restrictions imposed around the world, and as such have slowed their drive for AI solutions, instead focussing on reducing costs.
For the telecoms industry itself, AI is of course becoming vitally important to network management, with data usage set to grow exponentially in the coming years. On the other hand, the pandemic has delivered a huge blow to their retail outlets, accelerating a trend towards digital marketing and high street decline that had already been developing for years. AI will be increasingly important in managing customers’ online experience, using large scale data analysis to predict their preferences and potentially offering them unique deals.
With the coronavirus pandemic far from over and the world growing increasingly digital, AI investment is showing no signs of slowing.
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