The Opinion

by Manuela Vaz, President of Accenture Portugal

Europe Can (and Must) Become Competitive Again — Together We Can Reverse the Trend

By Mauro Macchi, CEO of Accenture EMEA, and Manuela Vaz, President of Accenture Portugal

Europe’s competitiveness is under pressure. This issue dominates the agenda of business leaders across the continent — including in Portugal — and will remain a key focus in strategies for 2025.

Growth and productivity are slowing down. Europe is facing a persistent lack of investment in innovation, with R&D budgets significantly lower than those in North America and the Asia-Pacific region. This imbalance weakens the continent’s ability to respond in an increasingly fast-paced world.

In fact, most Portuguese business leaders expect more change in 2025 than in 2024 — a perception aligned with their European peers (72%). But an even more concerning insight emerges: European executives feel less prepared to deal with this change compared to their North American counterparts. If this reality is not addressed, the risk of losing global relevance is very real.

Adding to this is an unstable geopolitical context, with recent developments further increasing uncertainty. The imposition of trade tariffs by the United States — including rates of up to 50% on European imports — threatens Europe’s already fragile competitive position. While many of these tariffs are currently suspended, the risk of a disorderly escalation calls for a united, strategic, and resilient European response.

Technology as a Catalyst

The good news? Solutions are within our reach — and technology is one of the most powerful. The widespread adoption of Generative Artificial Intelligence (Generative AI), the most transformative technology since the Internet, represents a unique opportunity for Europe to reinvent itself.

AI has the potential to significantly boost productivity, with estimated gains of up to 30% in certain sectors. This is not a theoretical concept — business leaders are clearly aware of its impact. In Portugal, executives plan to increase their investments in Generative AI throughout 2025, following the European trend. More than half of decision-makers expect to significantly expand AI use within their organisations — a remarkable leap compared to 2024.

However, one essential condition remains: implementing AI is more important than merely adopting it. The real value of this technology will only be unlocked if applied with a people-first approach — promoting trust, reducing internal friction, and investing in upskilling the workforce.

People First

AI is not a stand-alone solution. It is a tool with immense potential, but its true value materialises only when employees are equipped and confident to use it. Today, around 44% of working hours in Europe have high potential for automation with Generative AI. Yet, companies continue to invest three times more in technology than in workforce training — an imbalance that must be urgently addressed.

Continuous learning needs to be at the heart of corporate agendas. This is where trust is built — and also where widespread fears can be mitigated. One-third of European workers believe AI could lead to job reductions. Globally, 60% fear its use may increase stress and burnout.

These concerns cannot be ignored. If they are, they risk slowing technology adoption and diminishing its positive impact. Companies must act as agents of trust, offering adequate training and establishing clear guidelines for the responsible use of AI. More than half of employees say they would feel more comfortable with these assurances — reinforcing the importance of upskilling as a central pillar of technological transformation.

From Isolated Initiatives to Integrated Strategies

Another barrier to scaling AI lies in the fragmentation of initiatives within organisations. It is still common to find teams experimenting with AI in isolated, uncoordinated ways. This siloed approach drastically reduces AI’s impact and prevents the realisation of its broader benefits: increased productivity, sustainable innovation, and better experiences for both customers and employees.

To maximise results, companies must adopt a coordinated, cross-functional approach — with clear strategies and agile digital infrastructures that enable rapid, secure scaling.

A European Ambition

Technological transformation is not just a technical challenge — it is also a strategic and organisational one. It requires robust systems, collaboration across teams, and commitment from all areas of the business.

This is where Europe — and Portugal in particular — have a unique opportunity to lead. But success depends on a federated project, based on new cooperation models among EU member states. This project must address common challenges — such as technology, energy, semiconductors, education, skills development, and access to capital — and create the conditions for European champions to emerge with global scale.

In an international context marked by uncertainty and disruption — as highlighted by the new US trade tariffs — cohesion, innovation, and resilience are imperative.

Europe has the resources and the talent. What it needs now is boldness and coordinated action. The future of Europe’s competitiveness is being shaped today — and the time to act is now.