Katarina Railko brings a unique perspective to the world of corporate strategy as a hospitality and entertainment expert who has watched the digital landscape shift from simple booking systems to complex AI-driven ecosystems. Having refined her craft in the travel and tourism sectors, she understands the pulse of large-scale conferences and the granular needs of service-based industries where human interaction meets technological efficiency. Today, we sit down to discuss the findings of the inaugural AI Progress Barometer, exploring how European giants are sprinting to catch up with their North American counterparts and what the widening gap between small and large firms means for the continent’s future. We delve into the modernization of data foundations, the critical shift from experimentation to execution at scale, and why specific sectors like insurance and travel are currently leading the charge in this global race.
How do you interpret the recent shifts in AI readiness between Europe and North America, specifically regarding the pace of improvement?
It is fascinating to see Europe finding its stride, with large companies finally starting to narrow that historical gap with North American firms. Over the last six months, we’ve seen European organizations push their readiness scores up by 1.6 points, which actually outpaces the 1.1-point improvement we observed in North America. While North America still holds the lead with a higher average AI readiness score of 48.9 out of 100 compared to Europe’s 43.1, the momentum in Europe suggests a real awakening to the necessity of AI. This isn’t just about buying new software; it is about a fundamental shift in how these companies approach their data, their processes, and their people.
The data highlights a significant internal divide within Europe; what are the implications of smaller firms lagging behind the corporate giants?
This internal disparity is perhaps the most critical challenge facing the European economy today. We see the largest players—those with annual revenues above $10 billion—sitting only 2.1 points behind their North American peers, which is a manageable distance of 47.4 against 49.5. However, when you look at smaller European companies, they are struggling significantly, trailing comparable North American firms by a staggering 7.6 points with a score of 40.5 versus 48.1. This pronounced gap suggests that smaller businesses are missing out on the essential productivity gains that AI-led growth provides. If this divide isn’t bridged, we risk a two-tier economy where small and medium enterprises simply cannot keep pace in the global landscape.
Looking at the geographic landscape, which European countries are currently setting the pace for this transformation?
The growth is not uniform across the continent, but we are seeing some incredible “sprinters” in specific regions that are lifting the overall average. France has shown remarkable leadership with a 5-point jump to reach a 43.1 score, followed closely by the United Kingdom, which rose 4.8 points to land at 44.5. Even Spain, which started from a lower base, has surged by 4.6 points to reach 39.9 in the latest barometer. These numbers reflect a concerted effort by national industries to modernize their technological foundations and retrain their workforces. It’s heartening to see these major economies taking the lead, as their success often creates a roadmap for neighboring markets to follow.
As someone with deep roots in hospitality and travel, how do you see those specific sectors excelling in AI adoption compared to others?
Seeing the travel industry improve its score by 5.7 points to reach 46.7 is particularly exciting because it reflects the real-world complexities of managing customer experiences. However, the insurance industry is the real standout here, leading all eighteen tracked sectors with an 8-point increase to reach 48.6. They are successfully moving from just playing with AI to executing it at scale, such as automating straightforward claims while letting human experts handle the high-touch, complex cases. This requires a level of process reinvention and data hygiene that other sectors, including consumer goods which rose 5.2 points to 43.7, are still trying to master.
What are the foundational elements that these successful large companies are focusing on to maintain their competitive edge?
Success in AI isn’t a fluke; it’s built on four distinct pillars: strategic direction, technology foundation, people and skills, and process reinvention. Large firms are moving beyond simple experimentation and focusing on enterprise-wide reinvention, which means rethinking their entire operating models from the ground up. This involves cleaning up messy, siloed data and ensuring the workforce has the skills to actually use the new tools being deployed. Speed of execution is becoming the primary differentiator, as those who can modernize their technology foundations the fastest are the ones seeing the quickest returns. Without a committed leadership team and a robust governance framework, even the best technology will fail to deliver meaningful value.
What is your forecast for the AI landscape in Europe?
I believe we will see an “echo effect” where the strategies perfected by the $10 billion giants start to become the blueprint for the rest of the market. Over the next few years, I expect the gap between European and North American large firms to shrink further as European execution speed continues to accelerate. However, the real story will be whether smaller firms can find the investment to close that 7.6-point gap or if they will require more significant institutional support to stay relevant. We are moving into an era where AI readiness is no longer an “extra” feature, but the core engine of corporate survival across every sector from travel to insurance.
