PwC Luxembourg recently released the results of the survey entitled “Use of Data Analytics and Artificial Intelligence by Luxembourg companies”, asking the question, “Where do we stand?” to Luxembourg organisations.
The conclusion of the survey results is that while there is work to do, the country is in line with other European countries. To add to this, PwC Luxembourg experts believe strongly that with the Luxembourg government pushing to develop the AI sector in the country, there are opportunities for Luxembourg and for its companies to become front-runners in the AI revolution. The survey reveals areas where positive actions can help move Luxembourg in that direction.
AI (artificial intelligence) as a true agent of change is coming. In many ways, its early rumblings are already being felt. It is clear that some companies will be early adopters while others will wait until their business model is obsolete. Many start-ups have created data-driven cultures from their inception, which is a key reason why large, established firms fear disruption from them.
Where does Luxembourg stand in terms of Data Analytics and AI?
The survey, conducted in May 2019, asked questions that were aimed at understanding what types of strategies Luxembourg companies currently have in place to manage data, the types of technology they use, and how they are investing to adopt a data-driven culture.
• 26% of respondents consider their company to be mature with regard to data architecture
• 28% of respondents say there is a clear and defined strategy for managing data within their company
• 23% of respondents say they are currently using AI
• The human factor is by far the biggest hurdle going forward. The financial factor is the second-largest.
“Luxembourg is at the same level as other EU countries in that it has not yet embraced the AI revolution 100%,” said Thierry Kremser, Partner, Data & AI Leader, PwC Luxembourg. “Our country is faced with similar challenges as most EU Countries in terms of skills, financial resources and lack of maturity of their current Data architecture. However, we observe many Lux companies with AI experiments or established teams. For example, in the financial sector, the regulatory requirements have pushed the development of Data expertise for risk and reporting purposes. Therefore, there is already a strong basis for more data & AI innovations. Moreover, the still relatively new Luxembourg government priorities put digital, and in particular AI, as a key priority. This vision is built on Luxembourg’s ambition as a digital front-runner; to be among the most advanced digital societies in the world, and especially in the EU, to become a data-driven and sustainable economy, and to support human-centric AI development. With the Luxembourg government keen to develop the AI sector in Lux, we see a bright future with many opportunities for Luxembourg and for its companies to become front-runners in the AI revolution and the survey results point out where work needs to be done.”
Data & AI use cases
Luxembourg companies primarily collect data for operational efficiency as well as client knowledge and experiences. Besides, the financial industry considers AI primarily for compliance and risk management purposes.
Slow adoption of Data and AI strategy and culture
An important and continuing issue is the slow speed with which established firms make the shift to a data-driven culture. Clearly, they need more intensive programmes to achieve data-related cultural change. In fact, very few firms in our sample (28%) have a clear and defined strategy for managing data. As many start-ups have created data-driven cultures from their inception, large and established firms fear disruption from them.
People are the weakest element for AI adoption
The human factor is by far the biggest hurdle: 63% of our respondents cited in particular the lack of knowledge about AI, the lack of team training and internal resistance to change as the main hurdles in the adoption of AI in Luxembourg. This requires companies to invest in their people and establish new management roles.
What can Luxembourg companies do?
The study reveals that there are three key points that companies in Luxembourg will need to keep in mind in order to move forward.
1. Luxembourg companies still face many hurdles in terms of data quality, coherence of systems, data processes, and data governance.
2. Adopting a true data-driven strategy means that data matters should not be left to a few experts who are in charge of producing reports; instead, companies should ensure data visualisation tools are widely spread throughout the company and used by employees at all levels of the organisation.
3. The route to AI will be long and full of obstacles. However, Luxembourg companies should already embrace R&D in the area and start thinking about what they can do with the data they are collecting on a daily basis, instead of waiting for the headquarters to take ownership of this data.
"The AI journey has to start with people. The capacity of employees, especially younger generations, to embrace the AI revolution is underestimated. Organisations will have to upskill their employees - all of them - and then trust them to innovate,” said Thierry Kremser, Partner, Data & AI Leader, PwC Luxembourg.