How deep tech can create 1 million European jobs
By investing in deep-tech business, Europe’s start-up ecosystem could create $1 trillion in enterprise value and up to one million jobs by 2030, consultancy McKinsey says in a report. Market research firm Gartner claims that by 2030, 25% of all IT work will be done by AI alone. 75% of IT work will be done by humans augmented with AI, according to a Gartner survey of over 700 CIOs.
“While not all AI is ready to deliver value, humans are even less ready to capture value,” Rob O’Donohue, VP Analyst at Gartner, told a Barcelona symposium. “AI readiness means AI can help you find value and effectively meet the needs of specific use cases. Human readiness is about whether you have the right workforce and organisation to capture and sustain AI value.”
Gartner says AI’s impact on global jobs will be neutral through 2026 and by 2028, AI will create more jobs than it destroys.
“AI is not about job loss. It’s about workforce transformation. CIOs should start transforming their workforces by restraining new hiring (especially for roles involving low-complexity tasks) and by repositioning talent to new business areas that generate revenue,” said Gabriela Vogel, VP Analyst at Gartner.
“Restraining hiring will help to enhance productivity and optimise costs, but to capture new value, more needs to be done. The workforce needs to be able to work with AI in radically new ways. The skills they need are going to change.”
The Gartner analysts said organisations’ skills development plans should go beyond training people in new skills. If people rely too much on AI and stop using their core skills, skills atrophy can happen. Workers should be tested periodically to make sure they are retaining critical skills for important roles.
In EMEA, 73% of CIOs reported that their organisations are breaking even or are losing money on their AI investments.
“When considering AI accuracy and AI agents, organisations should pivot from conversational agents to decision-making agents, and most importantly, they should invest in AI agents that are experts”, Gartner says.
The McKinsey report says that Europe could become a global leader in launching and growing deep-tech companies, paving the way for more prosperity across the region and increased sovereign strength centred on intellectual property.
According to the report, a new economy centered on deep tech could emerge in Europe. This new economy could collectively create $1 trillion in enterprise value and up to one million new jobs across Europe by 2030.
“Momentum in this sector has already been building in Europe for several years, with both corporate and venture capital investors funding many new deep-tech businesses. Accelerated technology development in the past few years, spurred by AI, also highlights Europe’s value creation potential.”
“By building a strong regional deep-tech ecosystem today, Europe has a chance to become the world’s top “deep tech factory” tomorrow—competing head-to-head with China and the United States.”
“Success will require close collaboration between players in the start-up ecosystem, including venture capitalists and entrepreneurs, and the broader deep-tech community of researchers and industrial partners. Corporate venture capital and growth investors, public funds, and financial institutions that provide debt funding will also be vital.”
“Our analysis shows that a successful deep-tech-innovation engine is already firing in Europe”, the report says, stressing that three countries stand out as core drivers of deep-tech growth: France, Sweden, and the United Kingdom.
“Sweden has the highest percentage of overall start-up funding going toward deep-tech companies of any European country, at 65% through the end of 2024.
The consultancy says that the European deep-tech sector has many tailwinds propelling it forward, but headwinds remain.
“One of the biggest obstacles that Europe faces in fostering a strong deep-tech ecosystem is how to keep fast-growing companies from leaving. Many European start-ups feel the pull to relocate to the United States once they reach momentum.”
McKinsey says European stakeholders can focus on improving six key areas to build a strong deep-tech ecosystem”
- Access to funding. Deep-tech businesses are tackling hard challenges and thus often need large amounts of capital to launch, grow, and scale.
- Access to liquidity. Funding may provide fuel for deep-tech start-ups to grow into scale-ups, but true success comes at the exit phase.
- Favorable regulation and policies. Governments and regulatory bodies play a big role in supporting deep-tech innovation.
- Customer interest. Deep-tech companies need customers to gain traction and grow, especially in defense, healthcare, and energy.
- Regional know-how and infrastructure. European universities can accelerate the deep-tech wave by creating tech transfer offices to turn research into start-ups.
- Attracting and supporting talent. Companies can offer creative and flexible work environments and competitive compensation, including stock options and stock purchase plans. Governments can simplify visa and work permit processes that could attract tech workers to their countries.
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