The EU Needs a Mindset Switch to Compete in the Age of AI

3 min read

Despite its market power and niche industrial prowess, Europe is struggling to close the innovation gap with the United States and China. But innovation alone won’t help unless new products are also diffused across the economy.  

The European Union (EU) suffers wide skills gaps compared to its competitors, and while on average Europeans think positively about science, the Union and its member states could do better at promoting a culture that fosters innovation and speeds up technological adoption.   

The presence of enabling infrastructure and people with adaptive skills and mindset are critical to stay at pace with technological advancements. It is in the nature of new technology to advantage those who are prepared to use it, sometimes reinforcing rather than disrupting existing hierarchies. This dynamic is clear across Europe’s fragmented economic landscape, where the adoption of artificial intelligence (AI) is accelerating in well-resourced hubs while it keeps trailing in less advanced regions.   

The EU needs to change course. While investing in hard digital skills is paramount to promote adoption in the short run, a deeper shift is also required - one that fosters a problem-solving mindset, equips workers with adaptive skills, and enables the long-term capacity to stay at pace with rapid technological change. In essence, this means undergoing a fundamental reform that starts with education.    

Technology diffuses unevenly and reinforces inequalities  

AI is reshaping labour markets, eliminating some jobs and creating new ones. The computer age rewarded software engineers and made typists obsolete because digital machines could perform similar tasks more efficiently. AI is likely to follow a similar pattern, benefiting those with expertise in data science, machine learning, and related fields.     

Individuals with high-level, specialised AI skills can gain more in terms of productivity and wages than their low AI-skilled counterparts. Larger firms can adopt advanced technologies more easily, not least thanks to their more skilled management and capacity to make necessary organisational arrangements. Firms and regions with pre-existing expertise in science, technology, engineering and mathematics (STEM) disciplines are already exhibiting significantly higher rates of AI and automation uptake.   

In 2024, only 13.5% of European enterprises used AI technologies in their everyday tasks, ranging from more than 27.6% in Denmark, 25.1% in Sweden, and 24.7% in Belgium to just 5.9% in Poland and 3.1% in Romania. Moreover, the differences registered were not only geographical but also sectoral: almost 50% of companies in the information and communication sector used AI, while nearly 6% in the construction sector did so.    

Around 60% of firms point to the lack of skills as a major barrier to investment in advanced technologies. Individual attitudes towards such technologies might contribute to explaining these gaps. In general, Europeans think positively about science, but as the latest Eurobarometer indicates, nearly 40% don’t have time to engage with it, 37% are not interested, and 36% lack basic knowledge to understand it. While Europeans believe that technology could help address societal crises, they also think that technological progress mostly helps companies make profits. When it comes to AI and science, just over a third trust AI-supported scientific research, while a quarter distrust it. In general, Europeans are most concerned with the equitable distribution of the benefits of AI.  

At the same time, however, the stakes could not be higher. By 2040, Europe will lose two million workers per year due to the greying of its population, reducing the ratio of workers to pensioners from 3:1 to 2:1. In this context, Europe’s long-standing social protection and welfare standards will become increasingly unsustainable if productivity doesn’t rise. Therefore, in a world where AI drives growth, digital illiteracy and fear of job automation are luxuries Europe cannot afford. Europe must act fast and make political choices to move forward.     

From Digital Skills to a New Educational Paradigm    

Updating workers’ hard skills risks being a short-lived solution to closing the productivity gap. The diffusion of advanced technologies demands more than technical expertise. It requires problem-solving, adaptability, and interdisciplinary thinking across the workforce. For most employees, AI will not automate jobs outright but will transform familiar tasks, requiring workers to apply new tools to old problems.     

The recent call to equip citizens with the necessary skills to increase resilience and innovation by improving digital literacy and STEM knowledge is indispensable to boosting rapid technological adoption. Adult learning to update workers’ competencies throughout their careers is paramount to adapt old profiles to new tasks, problems to solve, and technologies, and vocational training must indeed be requalified across national education systems.   

However, such initiatives risk being short-lived if not backed by deeper educational reforms with a forward-looking spirit. One of the reasons behind the decreasing number of STEM graduates mirrors the declining interest of young Europeans in science. Among those who do graduate in STEM subjects, many prefer relocating to more stimulating social environments that reward scientific inquiry and problem solving. Silicon Valley is an innovation hotspot and attracts leading scientists, technologists, and entrepreneurs because it fosters risk-taking, embraces failure as a learning opportunity and encourages people to think big and out of the box.   

In Europe, part of the problem is thus cultural, and education is central to it. European science education remains largely deductive - students are given formulas and facts rather than being encouraged to explore open-ended questions. Yet, there are more appropriate educational models for a world of rapid technological change. Over a century ago, American educational reformer John Dewey emphasised learning through active problem-solving rather than passive memorisation. Today, his insights are more relevant than ever. A shift toward problem-based education is needed to equip students with the curiosity and critical thinking skills to navigate technology-driven transformations.   

For example, problem-based learning (PBL) is a teaching method that encourages learning by experience. Championed by medical schools, it has been tested in other areas, too, and across different educational degrees. European examples include Denmark and the Netherlands. Not surprisingly, the same countries figure among the EU’s top innovators. While critics point to the requirement of more teaching staff and resources to deliver effective PBL, the method has been shown to improve students’ learning outcomes, help reduce the achievement gaps for students from disadvantaged backgrounds and improve students’ capacity to manage and cope with uncertainty.     

Similar solutions could be adapted to national contexts and disciplinary objectives. The revision of teaching and learning experiences can be achieved without undermining the cultural pillars of each national education system. In fact, nurturing more critical, experimental, and proactive attitudes towards knowledge and science could actually reinforce national pride in education by driving local innovation and prosperity.  

 A generation that shapes technology – not the other way around     

Path dependencies and political inertia make ambitious reforms difficult, but an education system that nurtures problem-solving is essential to enable technological diffusion and, thus, sustained economic growth.   

The EU faces a choice: it can remain a laggard in AI adoption, hampered by a lack of skills and outdated educational models, or it can equip today’s students and workforce with the tools and literacy to cope with the diffusion of new technologies.   

Governments, industry, and researchers should work together to identify the cognitive skills remaining in high demand throughout different technological changes. Before taking concrete action, and to take it pragmatically, they should compare those skills with those nurtured by existing educational programs to complement and update them.  

Ultimately, not every student will become a scientist, but fostering critical thinking and adaptability will certainly benefit society as a whole. The ability to question assumptions, identify challenges, and propose solutions will define Europe’s role in a fast-changing world. The alternative is to passively accept technological change without shaping its direction. The EU cannot afford to fear AI - it must learn to master it.