On Oct. 25, 2019, Chinese President Xi Jinping said that China must “take the leading position in the emerging field of blockchain.”
In Europe at least, it is, according to the European Investment Bank (EIB). On June 1, Reuters reported that the EU’s investment arm warned that Europe had fallen about 10 billion euros — about $12 billion — behind China and the U.S. in blockchain technology and artificial intelligence (AI)
The attempts by the EU and European companies to catch up with China and the U.S. is faltering because of severe underinvestment, the EIB said.
Noting that the two superpowers together put up more than 80% of the 25 billion euros ($30 billion) invested annually in the two technologies, the bank noted that the 27-member EU invested juts 1.75 billion euros. That amounts to about 7% of the total.
"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 business application and economic success," the bank said in a report. "EU and member state support schemes could plug part of the gap, but private markets will clearly need to contribute the balance.”
The Unknown Unknowns
The EIB highlighted the importance of both AI and blockchain given the possibility that they could reinvent whole sectors of the economy hit hard during the pandemic, notably financial services, healthcare, and business intelligence.
Citing the economic damage wrought by COVID-19, the gap is likely to widen, the EIB predicted in its report.
Still, the problem goes beyond just money. Along with a hesitancy to back goals requiring a high upfront investment, the EIB pointed to deeper problems, notably lack of expertise in the two fields and that few venture capital funds have investors specializing in blockchain and AI.