The report, titled “Innovate or Fade,” emphasises the need for European companies to enhance technology expertise within their boardrooms, increase investment in research and development (R&D), and leverage their skilling strengths.

Accenture incorporated a survey of 1,000 business leaders across Europe, the USA, and APAC and includes an economic-modelling-based analysis of 2,114 companies to assess the technology gap between European and North American companies and quantify the potential additional revenue that European companies could generate by closing this gap.

Accenture data reveals latest technology trends and shortfalls

According to the findings, only 14.4% of board members in European companies possess technology experience, in stark contrast to 21.6% in North American companies. Among the analysed European companies, the Netherlands, Ireland, and the UK exhibit the highest levels of technology experience at 19.1 %, 18.9 %, and 18.8 %, respectively. In contrast, Norway (6.2%), Austria (6.1%), and Portugal (4.5%) have the lowest technology experience within their boardrooms.

Additionally, the report reveals that a mere 11% of European CEOs have technology experience, compared to 17 % in North America. Furthermore, 33% of European companies lack any board members with technology experience, while the figure stands at only 19% for North American companies.

The significance of technology expertise at the board level cannot be understated, particularly in today’s challenging macroeconomic environment where companies must continuously reinvent themselves to ensure resilience and growth.

Jean-Marc Ollagnier, CEO of Accenture for Europe, said the need for boards and CEOs to integrate technology from the outset when developing new products, services, or business models, is essential. Failure to do so could result in missed opportunities to generate billions of dollars in additional revenue. Ollagnier cites generative AI as an example, highlighting the critical importance of technology expertise in harnessing its potential to drive efficiency, growth, and responsible implementation.

Moreover, the report reveals that European companies exhibit a greater focus on upskilling their workforce in technology compared to their U.S. counterparts. Around 28 percent of European companies surveyed reported running a technology program across their business, whereas only 18 percent of U.S. companies do the same. This emphasis on upskilling may explain why European companies appear less concerned about a shortage of tech skills compared to their American counterparts.

European companies need to accelerate their R&D investments

To achieve future growth, the report suggests that European companies need to accelerate their R&D investments. Currently, European companies allocate a smaller portion of their revenues to R&D compared to North American and Asia Pacific companies. Furthermore, the R&D investment gap between European and North American companies has doubled from 70 basis points in 2017 to 140 basis points in 2022. This gap translates to a $147 billion shortfall in R&D investments for European companies in 2022.

The report also highlights a lower number of AI-related patents filed by European companies compared to their North American and Asian counterparts. Only 60% of European companies have filed patents related to AI, while the figures stand at 77% for North American companies and 89% for companies in the Asia Pacific region. Similarly, European companies lag in filing patents related to generative AI, with only 34 % doing so, compared to 60 % in North America and 73 % in the Asia Pacific.

R&D investments are crucial for future growth

Jean-Marc Ollagnier stresses that technology R&D investments are crucial for future growth, enabling the development of new products, services, and business models. For instance, technologies like blockchain can ensure the traceability of components and improve the transparency of the recycling process, facilitating trust among consumers and fostering product reuse. Ollagnier also highlights the role of technology in accelerating R&D efforts, citing cloud computing, AI, and quantum computing as tools that can expedite drug discovery and enable the creation of sustainable materials.

Accenture’s “Innovate or Fade” report analysed the technology experience of board members (inside and non-executive directors) of 1,843 of the world’s largest firms, including those in North America, Europe, and Asia Pacific. The research also evaluated the professional backgrounds of 1,695 CEOs.