Economic Capacity, Digital Skills, and Cyber Diplomacy: Factors Influencing EU Enterprise AI Adoption

The European Union’s (EU) enterprises can benefit greatly from artificial intelligence (AI) to improve their competitiveness and increase their productivity; however, AI adoption rates vary widely by country. While earlier research has found that digital skills, innovation capacity, and quality of governance each contribute to enterprise AI adoption levels, the EU has very few quantitative analyses regarding which factors are most likely to influence the level of enterprise AI adoption. This study investigates how the national-level variables: gross domestic product (GDP) per capita, number of available Information and Communication Technology (ICT) specialists, innovation intensity, and cyber diplomacy capacity explain variations in enterprise AI adoption across the EU countries. It uses OLS regression models estimated using cross-national data from Eurostat and the Digital Economy and Society Index (DESI) for 2022 and 2023. The results show that the R&D intensity was the only factor to remain positively and statistically significant in both years’ full models. Gross Domestic Product (GDP) per capita, and the number of ICT specialists were positively related to enterprise AI adoption in the two years; however, the relationships were not statistically significant once innovation intensity and cyber diplomacy capacity were included. Additionally, the Cyber Diplomacy Capacity Index (CCI) was not statistically significant, indicating that cyber diplomacy may be more an institutional characteristic rather than as a specific short-term correlate of enterprise AI adoption. Overall, this research indicates that national innovation systems may be more relevant to the adoption of enterprise AI than merely the economic prosperity of a nation.