Simon Paris (Unit4) on Europe’s innovation ambition and re-imagining the DNA of businesses
In the global race for investment and innovation, Europe appears to be losing ground to other superpowers such as the US and China. Simon Paris, CEO of Unit4, examines the region’s competitiveness and explores what European businesses need to do to reinvent their DNA and remain at the forefront of the landscape.
2025 has seen the European Union (EU) and the UK government and make several policy and investment announcements, underlining their desire to kickstart economic growth and position the region as an attractive hub for innovation.
The EU launched its Startup and Scaleup Strategy in May aspiring to make Europe “the best place in the world” to launch and grow global technology-driven companies. Meanwhile, the UK wants to become a global AI superpower, which has been backed most recently by the Tech Prosperity Deal with various US tech giants and could see billions invested in the country.
Though these commitments are welcome, the reality is that Europe is still behind both the US and China when it comes to investing in innovation. As a benchmark of that gap, McKinsey & Company says Europe only competes effectively with the US and China in four out of 14 technologies considered crucial to the future global economy.
In the same report, it estimates Europe has less than 5% market share of the AI value chain today, while “in 2023 the so-called “Magnificent Seven” of US tech companies spent as much on R&D as half of all of Europe’s public and private sector R&D spending in technology and other areas combined.”
Europe’s moonshot moment
While this disparity suggests it will be difficult to catch up, there are still significant opportunities for European companies of all sizes to dominate on the global stage. We are not without successes such as the likes of Spotify, Klarna and Revolut and technologies like Generative AI offer an opportunity to increase productivity by 2030 injecting $575 billion into the region’s economy.
Additionally, McKinsey also found that if Europe could better scale its startups, the continent could create annual value for its economy between €500 billion and €1 trillion.
It’s no wonder McKinsey calls this “Europe’s moonshot moment”. If European businesses are going to compete globally in the future, they must pay close attention to how this technology iteration is reshaping work.
I would argue that companies like Amazon and Netflix have been so successful because they understood intersection between people, technology, and process. They were able to identify business opportunities and shape business models that could take advantage of technology disruption more effectively (and in some cases much faster) than their competition.
How will businesses evolve in the post-AI era?
It will be difficult to match the US and China in terms of investment, but the success of Amazon and Netflix should encourage optimism among European businesses that they can still compete on the world stage. If European companies can understand how AI will impact their business models and adjust their organisational and operational structures to become more agile, they have a chance to get ahead of rivals.
Hand on heart, I don’t think any CEO has completely mapped out what their business model will look like in the AI era. Everyone is very clear that AI is helping to make us smarter and more productive by automating mundane tasks and providing real-time analysis and insights, but we are still working our collective way through what this will mean long-term for business processes, customers engagement and organisational structures.
The DNA of European businesses will change dramatically and while today this future vision is taking shape, Europe has a window of opportunity to find out how get ahead and differentiate itself.
It’s why initiatives like Boardwave are so important, because it is bringing together senior figures from the European technology industry with the ambition of supporting European software companies to become more successful on the world stage. Greater creativity and risk-taking is required by companies in this to reimagine how they operate. Take the services industry, which is so vital to Europe’s economy.
AI is redefining professional services
In professional services alone, previously unimaginable questions are being raised about the future of the major players and if they could be under serious threat from more nimble specialist firms.
Thordur Arnason at Capgemini Invent has written a series of posts looking at the future of professional services. He talks about the pyramid model being replaced by a diamond shaped one. So rather than having junior employees at the bottom of the pyramid completing tasks like structured analysis, report drafting and summarising materials, these tasks will be automated using AI.
In the new diamond model, more highly skilled mid-level executives will be supported by AI tools, but Thordur believes this requires a significant rethink of the way firms work.
It could include moving away from current billing models. Indeed, one firm, Globant, is introducing a subscription-based offering where clients buy tokens for access to a virtual workforce of AI Agents overseen by human consultants. We could also see consultancy becoming more productised, using AI to identify repetitive tasks that could be addressed with off-the-shelf digital products.
Thordur also talks about Y-Shaped, rather than T-Shaped talent, whose value is built on a solid foundation of expertise enabled by AI to deliver more value in real-time. He calls these future professionals “conductors of intelligence” whose superpowers enable consultants to leverage AI tools in ways competitors cannot, but who also have interrogation and communications skills to challenge what the AI tools are producing.
Further reading: Generative AI’s opportunities and challenges for consulting firms and consultants.
Priorities for European businesses
One question stands out in Thordur’s commentary, and should be one that European industries and policy makers are asking themselves: “What becomes possible when intelligence is infinite and free?”
This is a huge question, but it should lie at the heart of how businesses think about a future where AI plays a more pivotal role. Change will take time, so businesses must adopt a long-term vision for how they evolve, and CEOs must show leadership and be courageous enough to stick to their plans despite pressure from stakeholders. It is also important that they bring their people along on the journey, but this requires investment in skills to empower employees to explore the technology and understand how it will benefit them in their roles.
We need policy makers in Europe and the UK to play a pivotal role in supporting businesses as they reimagine their strategies and organisations. The EU’s desire to streamline corporate regulation underline the 28th Regime is positive. Equally, trying to accelerate access to capital through the Savings and Investment Union will help to encourage businesses to innovate.
Europe and the UK also have some of the best universities in the world, so it would be interesting to see co-operation between policy makers, academics and industry bodies to identify best-practice approaches for businesses to reimagine their organisations. The support to build the infrastructure needed to power AI-enabled businesses is very much welcome, but so too is data sovereignty.
And of course, initiatives that encourage the development of the right skills for European businesses are essential with an emphasis on critical thinking and analysis, communications and emotional intelligence, as much as on technical skills.
If policy makers can help European businesses conduct this reimagining exercise at a pace that matches (or at least gets close to) the pace of technological change, it will be a good thing for the region’s competitiveness.
About the author: Simon Paris is a seasoned executive with over 25 years of experience in the technology industry, including leadership positions with Finastra, SAP and Infor. He was also a senior consultant with McKinsey & Company. He is currently the CEO of Unit4, a provider of ERP solutions to mid-market organisations.
