EU knowledge safety regulation makes European firms much less aggressive | EUROtoday

He use of knowledge by firms, which incorporates each its processing and its storage, already made sense earlier than the arrival of synthetic intelligence. In this new context the place the AI has multiplied potential productiveness good points, It is important to offer it with the required knowledge, nicely organized and saved, to have the ability to get essentially the most out of it. As we are going to see, that is already a actuality in lots of Spanish firms, particularly among the many largest, though it’s nonetheless There are compelling causes that also restrict many firms' entry to new AI applied sciences.

Specifically, in 2023 one in 4 giant firms (firms with greater than 250 workers) used synthetic intelligence applied sciences, a proportion that decreased constantly with measurement by as much as 20% amongst firms with between 50 and 250 workers, since solely 6.6% amongst firms with 10 to 49 staff. This huge gradient by firm measurement, which is way better with respect to different providers resembling cloud computing, highlights that, at the least till now,he advantages of AI are concentrated in a restricted variety of firms.

Between the Reasons that firms argue for not having adopted AI applied sciencesit’s spectacular to see that the dearth of usefulness for the corporate of those new applied sciences is a relatively minor cause (lower than 11% of firms with out AI point out it as a trigger), whereas causes associated to present regulation show to be extra related. Specifically, knowledge safety and the authorized penalties that using AI might have are of explicit concern to smaller firms (10 to 49 workers), with percentages which are lowered (however nonetheless related) amongst bigger firms.

These issues concerning the authorized penalties of utilizing AI, associated to knowledge safety, are very justified. From the With European knowledge safety rules coming into pressure in 2018, European firms have more and more carried out worse than US firms by way of knowledge storage and use.as may be seen from the conclusions of the brand new tutorial work “Data, privacy laws and the firm production: Evidence from the GDPR”, which is the primary to causally consider the consequences of this necessary European regulation on firms.

In their evaluation, the authors use a difference-in-differences methodology to match the evolution of US firms, not affected by the regulation, and European firms which are affected. In the years previous to regulation, each teams of firms developed in paralleleach by way of knowledge storage and utilization, however this modified drastically from the quarter through which the European rules got here into pressure. From that second on, European firms started to fall behind their opponents, a course of that continued till 2021. In simply two years, the impact of the regulation meant that European firms saved round 33% much less knowledge. whereas its knowledge utilization dropped by 17%.

This unfavorable impact of the brand new rules didn’t completely have an effect on European software program firms, since firms within the industrial sector confirmed even better declines within the use and storage of knowledge. This lack of competitiveness dangers rising with the arrival of recent AI applied sciences.for which the EU is already making ready new rules, as soon as once more giving a comparative benefit to American firms that would not have to take care of the identical bureaucratic burden.

Additionally, andSmaller firms confronted a relatively greater price with a purpose to adjust to European rules. As we noticed beforehand, this justifies the authorized fears argued by the medium-sized Spanish firms to start out utilizing new AI applied sciences, since it should adjust to all rules It is introduced to them as a way more complicated problem than for big firms, with extra sources. Ultimately, this generates a lack of competitiveness for Europe with respect to the surface world, but in addition for medium and small European firms with respect to giant ones, which might use regulation as a defensive moat to stop their smaller opponents from benefiting. of those productiveness will increase related to knowledge evaluation and using AI.

The adoption of synthetic intelligence (AI) applied sciences by firmsparticularly within the European context, is hampered by rules such because the General Data Protection Regulation (GDPR). While these rules search to guard the privateness of people, additionally they impose vital burdens, particularly on small and medium-sized firms, who might lack the sources essential to adjust to authorized necessities.

This regulatory imbalance between Europe and different markets, such because the United States, threatens to undermine the competitiveness of European firms. and restrict your capability to completely capitalize on the advantages of AI and knowledge analytics. It is crucial to discover a stability that encourages innovation and knowledge safety with out imposing extreme boundaries to technological and enterprise growth, as is at the moment the case.