European companies less willing to invest in IT than US firms

Large US companies with annual sales of over $1 billion invest 1.45% of their sales in technology and IT. In Europe, large companies invest 10% less in IT, at 1.29% of total sales,  according to a report from Capgemini, which interviewed 2,500 decision-makers and business leaders across the globe. 

“The market size itself provides a clear advantage for US companies to scale technology investments compared to Europe,” said Jeremy Jurgens, managing director and head of the Center for the Fourth Industrial Revolution at the World Economic Forum, to Capgemini Research Institute in a comment. 

Things don’t look any better for smaller companies in Europe. Despite new regulations such as DORA and NIS2, both of which are expected to require significant investments in cybersecurity and skills, there is even more difference in willingness to invest when comparing European SMEs with American ones. Midsize American companies invest 3.04% of their turnover in technology, while similarly sized European companies invest 2.07%.

Business leaders around the world believe it is important to invest in IT and technology, and globally, 69% of business execs believe it is necessary for their organizations to increase investments in IT to maintain competitiveness. 

But even there, Europe lags far behind the US. Less than two thirds (64%) of European business leaders, fewer than the global average, are concerned that their organization is investing too little. In the US, however, where there is a stronger willingness to invest in IT when compared globally, 84% percent of business leaders are concerned about their organization’s investment power. 

Caroline Segerstéen Runervik, Nordic head at Capgemini, says in a comment that the lower investment rate and continued challenges with recruiting the right skills in IT and technology pose major challenges for European companies to maintain their competitiveness globally. 

“This will be especially important for countries that, like Sweden, rely more heavily on innovation and technological advances to drive growth,” she says.