Cost of non-Europe in robotics and artificial intelligence

This piece of work for the European Parliament explores a wide and multi-faceted domain – robotics – that crosses boundaries between several economic sectors and legal disciplines.

The development of robotics and artificial intelligence (AI) technologies is growing rapidly and there is a need for improvement in the legislation to accompany this development. A harmonised EU regulatory framework concerning liability and insurance regarding robotics and AI could provide greater legal certainty and also promote trust.

Greater legal certainty stimulates greater research and development activity by producers of these two new emerging technologies and increases their speed of uptake by consumers, resulting in a possible positive impact in terms of gross domestic product (GDP).

In Cost of non-Europe in robotics and artificial intelligence Cambridge Econometrics used a consistent CoNE/value-for-money approach to identify and quantify the foregone net benefits and the cost of not introducing EU-level action in relation to selected markets (liability, insurance and risk management) for robotics and AI.

Using the E3ME macroeconomic model, Cambridge Econometrics compared the prospects for the EU economy under two alternative regulatory regimes, with the CoNE identified by the difference in EU GDP between the scenarios in 2030.

The first regulatory regime is the current fragmented legislation framework with each Member State adopting different rules / laws. The second regulatory framework is the harmonised regulatory framework at the European level, i.e. one rule / law for all. The analysis focused on four sectors: transport (excluding autonomous vehicles), household consumer products, hobby/entertainment and medical.

Key findings of the quantitative analysis:

  • A harmonised EU regulatory framework on liability and insurance in robotics and AI in EU-27 is assumed to lead to increased R&D efforts, uptake of these two new essential emerging technologies and insurance cost
  • Greater R&D efforts on its own would lead to small positive impacts on GDP and employment. However, the uptake of robotics and AI is expected to bring about a wide range of economic and social implications, including the loss of employment
  • The overall impact of harmonised regulation depends greatly on the extent of which the jobs displaced by the faster uptake of AI and robotics are matched by new employment opportunities created elsewhere. The analysis suggests that favourable price effects do not offset much of the direct impact on the EU-27 as a whole
  • The adverse impact on GDP from net job losses can be mitigated via additional investment needed to increase the adoption rate of AI
Cornelia Suta Project Manager