Europe, GDPR, AI

by omnius
Januar 1, 1970

The Center for Data Innovation released an excellent piece on “Who Is Winning the AI Race: China, the EU or the United States?” last summer, which I only got around to reading over Christmas.  It brought to mind a few questions on the global state of things when it comes to AI and insurtech…

omni:us is an international company with a solid presence in North America, so I don’t always pay attention to these intercontinental comparisons. But I do get asked from time to time: why stay headquartered in Europe? Why not move to the US, where insurtech has practically come of age? The industry is younger there, and more open to innovation – why not get set up there fully?

There is truth in these words. We find generally a more receptive audience in the US, and a culture which is, though complex, generally less tangled by bureaucracy than here in Europe. There is a “digital gap” in Europe, where companies struggle to fully utilize contemporary digital capabilities for their business.

“Today, Europe operates at only an estimated 12 percent of its digital potential, compared with the United States’ 18 percent. In addition, there is enormous variation between Europe’s countries: while France operates at 12 percent of its digital potential, Germany is at 10 percent, and the United Kingdom is at 17 percent.”

This has been compounded in recent years by an “AI gap”. Data Innovation identify the leaderboard: “the United States currently leads in AI, with China rapidly catching up, and the European Union behind both.” The reasons are many and worth reading the article for a more in depth exploration. But in short, the US has technology and innovation, China has data, and Europe has academic research.

McKinsey identify “A possible gap… between Europe and the United States on the use of AI tools such as smart workflows, cognitive agents, and language processing—a 16 percent gap to date. Moreover, European AI is yet to be deployed broadly in enterprises rather than in one or only a few functions.”

There is also a latent issue of funding. “AI start-ups in the United States and China both received more venture capital and private equity funding in 2017 alone than EU AI start-ups received in the three years.” This is a cultural thing, and will not soon change. US receives massive private VC money whereas China has a river of state funding along with substantial private funding. Europe has always been more conservative in this regard and I’m not sure it’s something I would even want to change. For us, focusing on our product as a relatively small team is more important than massive year-on-year growth. It’s not a sprint (except for in the scrum!).

Despite these shortcomings and differences, the simple answer is that we are proud to be in Europe. We welcome the challenge and we are here to stay. Europe is awesome and we will rock it!

However, there are some issues that we must address on a broad level for Europe to stay abreast of the cutting-edge.

What can Europe do? 

We in the EU are well capable of keeping up with and even challenging the American and Chinese leaders in the field. The difficulty and hindrance has always been converting this knowledge into commercial efforts and business ventures.

At omni:us, we’ve identified a major gap in our collective efforts of the past: education. From the onset of a relationship, we are trying to inform and educate. We are taking this more seriously in 2020 onwards. Neural networks, insurtech, deep learning, these are still new concepts to the mainstream and getting people familiar with the tricky concepts related to our field is key to all of our success. So much can be lost due to miscommunication or a lack of understanding. We can all relate to getting annoyed by something we don’t fully grasp.

EU policymakers MUST ADAPT the GDPR, which they developed before fully understanding AI. The GDPR imposes severe restrictions on how European businesses use data, a key building block for AI. Public funding must focus more on adoption. Shipping real business value instead of funding only research heavy initiatives. The EU’s current approach to data protection is restrictive by design, stemming from the Union’s deep commitment to individual privacy and limiting how businesses leverage personal data. This is laudable and fundamentally good but also creates a wall for innovation.

There is so much data available, i.e. from statutory healthcare systems as the report sets out, that is being underutilized. Similar data opportunities might be transport and energy sectors, employment initiatives, education, and more. omni:us is dealing with largely private sector data – financial documents, claims etc – within insurance, and would be excepted from direct benefits resulting from policy overhauls. But a more data-friendly approach from the top would trickle down into the broader economy.

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