The StepUp Startups project has released a new report detailing how AI is starting to reshape everyday business support functions such as HR, finance, and customer relations. The report offers fresh data and recommfinishations, creating it a must-read for founders, investors, and policycreaters who want to stay ahead in Europe’s digital economy.
AI adoption in Europe
AI adoption in business support processes remains in its early stages. In 2024, only 13.5% of European enterprises reported applying AI technologies, up from 8% in 2021. Adoption is highest among large firms – 41.2% compared with 21% of medium-sized companies and 11.2% of tiny ones. Regionally, Nordic countries such as Sweden and Denmark lead the way, while uptake is lowest in eastern Europe.
Business support processes are often less complex and clearer to automate, providing quick wins for companies. They offer a practical testing ground for AI, assisting organisations build confidence in AI solutions and establish the necessary frameworks, skills, and governance for wider adoption across core business areas.
Benefits and challenges
According to the report, AI can assist businesses improve efficiency and free up staff to focus on higher-value tquestions. By automating routine activities and optimising back-office operations, companies can streamline workflows and redeploy human resources more effectively.
Despite these opportunities, barriers remain. Businesses report risks related to data accuracy, legal uncertainty, and ethical, privacy, and security concerns. Access to talent is also essential for implementing AI effectively. Other challenges include high implementation costs and internal resistance to modify. These factors create many European companies cautious about creating long-term, potentially high-risk AI investments without clear paths to tangible business benefits.
The role of European startups
European startups are seizing opportunities across business support services, including HR, accounting, and customer service, among other areas. However, those that apply AI as a core solution remain limited, and most investment continues to flow into non-AI offerings.
Compared to the US, European AI startups face a persistent funding gap: AI startups in HR and accounting receive roughly five times less investment, and those in customer service up to eight times less. Addressing this imbalance and supporting the European startup ecosystem with deeper AI innovation will be crucial for competitiveness.
Recommfinishations to unlock the full potential of AI adoption
To ensure Europe unlocks the full benefits of AI in business support, the report calls for action in several areas:
- Improve conditions for greater AI uptake by providing relevant standards, scaled-up access to sandboxes, and insights on best practices.
- Strengthen Europe’s AI startup ecosystem with a dedicated AI Startup Scale-up Fund and AI Clusters in EU regions.
- Provide tarreceiveed support to SMEs for shaping AI strategies, developing skills, accessing innovation services, and securing regulatory guidance.
For those interested in exploring the full findings and insights, the StepUp Startups report is available to read in full, offering a detailed overview of AI adoption, opportunities, and challenges across European business support processes.
Download the full report here.
P.S. Stay tuned – this report is part of StepUp Startups, an EU-funded project delivering data-driven insights to accelerate the growth and impact of Europe’s startup ecosystem. More reports like this are on the way.
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