Artificial intelligence in the EU

The impact of AI on the economy

Big data technologies change the way in which data and human labor combine to create knowledge. Is this a modest technological advance or a data revolution? Using hiring and wage data, we show how to estimate firms’ data stocks and the shape of their knowledge production functions. Knowing how much production functions have changed informs us about the likely long-run changes in output, in factor shares, and in the distribution of income, due to the new, big data technologies. Using data from the investment management industry, our structural estimates predict that the labor share of income in knowledge work may fall by 5%. The change associated with big data technologies is similar in magnitude to estimates of the change brought on by the industrial revolution.

The Changing Economics of Knowledge Production
Authors: Simona Abis, Laura Veldkamp
From: Columbia University

AI adoption in the EU

AI adoption in Europe is low and running behind other parts of the world, argue Hoffmann and Nursk. They look at the European Commission’s (2020) survey to analyze AI adoption rates in the EU as well as the barriers European firms face. They find:

• Skills and financial constraints are the leading reported barriers across adopters and non-adopters , with about 80 percent of respondents citing a lack of skills in their internal workforce and in the external labor market, as well as the high cost of buying the technology and adapting their operational processes around AI;
• Non-adopters differ significantly from adopters in their perception of legal and regulatory uncertainty as a barrier to adoption. Non-adopters are more concerned about the liability risk for damage caused by AI (63 percent vs 55 percent) and the reputational risk linked to using AI (47 percent vs 43 percent)
  
  
  
  What is holding back artificial intelligence adoption in Europe?
  By: Mia Hoffmann, Laura Nursk – Bruegel

AI regulation in EU

The European Commission proudly touts a European third way on AI regulation: rather than letting algorithms serve the state (as in China) or large corporations (as in the United States), the Brussels approach aims to put them at the service of people – ‘trustworthy AI’, as the EU slogan puts it. This entails curtailing the freedom afforded to the masters of AI – be they governments or companies.

Cooperation á la carte is the way forward for EU AI regulation
By: Daniel Mügge – University of Amsterdam