EU’s Path to Economic Growth: The Role of Generative AI and Policy Challenges

At a critical juncture in European Union history, generative AI could be a game changer that dramatically improves European Union’s growth and productivity in key sectors.

A new European Commission report From the Joint Research Centre (JRC) outlines how generative AI could radically change imaging and creative sectors such as technology, health, education and the arts, with a projected positive impact to the EU’s GDP of €1.2 to 1.4 trillion over the next decade.

This projected increase is motivated by the productivity gains, automation of mundane tasks, and staff productivity that generative AI can create.

Industries such as manufacturing, health care, energy and financial services will experience significant value added to their organisations by the implementation of AI, in the form of efficiencies and reduced time-to-market, predictives or personalised care or even better resource planning.

For public administrations alone, generative AI could open a €100 billion opportunity each year, improving productivity and quality of service for citizens.

Realizing these benefits, however, is not without its large policy obstacles. Generative AI’s rapid progress also poses broad risks, from exacerbating misinformation to perpetuating bias in decisions, disrupting peoples’ jobs and livelihoods, and even posing national security threats. EU’s proactive regulation.

The EU has been quick off the mark with legislation, making history with the world’s first AI Act that categorizes AI systems according to risk and places stringent obligations on high-risk uses of AI, including transparency and human supervision. We get companies to open up the blackbox of generative AI models and make them comply with transparency rules, disclose AI generated text and respect copyrighted training data.

One of the major challenges for the EU will be to find the right balance to promote innovation while having a proper regulatory framework that protects fundamental rights and democratic values. There are worries that an overly cautious regulatory system will stifle the development of European AI startups and reinforce reliance on foreign tech giants.

Policy advises more investment in AI infrastructure and skills, the promotion of public-private partnerships, and the development of regulatory frameworks to keep the system in a state of unity among member states. The EU’s strategic objective is to ensure AI works for people and society while allowing Europe to play a major role in the development and deployment of AI technologies worldwide.