Europe falling behind in innovation race - analyst

IDC says western Europe is investing considerably less in tech innovation than the US and China are

Western Europe is at "significant risk" of falling behind China and the US in technology innovation because of a lack of investment, an analyst has warned.

IDC claims that the US is set to spend 1.75 times more on IT innovation than western Europe is between 2018 and 2022, with China also investing a greater amount.

Mark Yates, research manager at IDC, said: "That Europe trails the US in its use of digital technology is often accepted as a given. What's worrisome is the size and potential widening of the gap between the two.

"There are companies out there that are able to do more with less or that have not yet pushed their IT systems to their full potential and there is a great deal that can be done by restructuring the organisation and resetting business goals.

"So much innovation today depends on the use of cutting-edge technologies, that new spending will almost always be needed to remain competitive."

IDC said that artificial intelligence is one such example, with US businesses expected to spend nearly five times more on the tech than western Europe-based firms are by 2022.

The lack of innovation from western Europe comes despite the region having a larger IT spend than China, with China set to spend 47 per cent more on innovation.

Marc Dowd, principle client adviser at IDC, said that European businesses need to think more creatively to maintain demand for their services.

"It's important to recognise that European goods and services are still in high demand," he explained.

"Many European enterprises, especially in central and northern Europe, have done an exceptional job of streamlining operations, innovating new business, and maintaining high standards without a lot of cutting-edge technology. But that won't last.

"Whether deployed via the cloud or client-based systems, ERP and CRM solutions are essentially commodities.

"So too are a lot of tools used to ensure quality. European firms will need to up their technology game considerably over the next few years if they wish to stay competitive both globally and on the continent."