BRUSSELS: The European Union’s attempts to catch China and the US in artificial intelligence and blockchain technologies are set to be hobbled by an investment shortfall of as much as €10 billion ($12 billion) annually, the European Investment Bank (EIB) said on Tuesday.

The EIB, the EU’s lending arm, said while the US and China together account for more than 80 percent of the €25 billion of annual equity investments in both technologies, the 27-country bloc contributed just €1.75 billion or 7 percent of the total.

It cited the importance of both technologies and their potential to reinvent sectors hit hard by the COVID-19 pandemic, such as financial services, healthcare and business intelligence, and boost the bloc’s economic resilience.

“Companies and governments in Europe are substantially underinvesting in AI and blockchain compared to other leading regions and it has become clear that the EU struggles to translate its scientific excellence into business application and economic success,” the bank said in a report.

It estimated an annual investment gap of between €5 and €10 billion in both technologies.

The EIB said access to finance may become more challenging in the short run as a result of market conditions, potentially widening the investment gap.

“EU and member state support schemes could plug part of the gap, but private markets will clearly need to contribute the balance,” the bank said. It cited several factors for the EU’s investment shortfall, among them European funds’ limited appetite due to high upfront investment needs, lack of knowledge and the limited specialization of EU venture capital funds in both technologies.