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Technology is the force shaping the future of global business services (GBS). The next great advantage won't come from old tricks like labor arbitrage or simply being big. Instead, it will come from mastering AI, creating smart data products, and building resilient digital foundations.
Europe has a couple of aces up its sleeve: some of the world's most mature service centers and global leadership in setting the rules for digital and AI. But these strengths are offset by ongoing weaknesses. Think fragmented infrastructure, slow adoption of advanced tech, and a growing innovation gap with the US and Asia.
Let's look at how Europe's business services can become a real engine for competitive advantage. The argument is straightforward: Europe has the right assets, but without scaling up its tech adoption and building for resilience, it risks being left in the dust. The time to act is now.
From classic GBS to the AI-powered era
To see where Europe's business services need to go, we first need to understand how far they've come. The journey from classic GBS to the AI-powered model is all about technology getting smarter. It's a shift from a back-office cost-cutter to an intelligent partner in business growth.
Classic GBS: Focused on cutting costs and consolidating processes. The tech was mainly ERPs and basic automation
GBS 3.0: Became an end-to-end integrator, using cloud platforms and analytics to run operations at scale
AI-powered GBS: Now, it's a business transformation engine. It uses multicloud, large language models (LLMs), and AI-infused platforms to cocreate value
In this new world, technology isn't just a support function. It's the key to global agility and creating real enterprise value. AI-powered GBS centers place intelligent systems right at the heart of business operations.
How Europe stacks up globally
Despite its strengths in governance and talent, Europe is lagging in key areas of enterprise technology. This is especially true when it comes to scaling AI and building data products.
United States: High readiness for AI, with mature, reusable services and a ton of data. The regulatory approach is light, putting innovation first
Asia (India, Singapore): Growing AI readiness with strong engineering talent. They are moving fast with cloud-native scaling
Europe: AI adoption is more cautious and fragmented, partly due to strong regulations such as the AI Act. Platform development is in its early stages, held back by legacy systems
Europe's advantage is in trust and mature delivery centers. But without speed and scale, this edge could disappear.
Why Europe's GBS ecosystem is primed for the next leap
Over the last decade, Europe's GBS centers in countries like Poland, Romania, and Portugal have quietly transformed. They've moved from simple transactional hubs to digitally mature service platforms. They now combine operational reliability with strategic adaptability, a rare and valuable mix in the age of AI.
These centers are perfect launchpads for enterprise autonomy, where systems, data, and AI agents work together to self-adjust and operate with little human help. Here are five unique advantages Europe's GBS ecosystem offers:
- Testbeds for trustworthy AI: With rules such as the GDPR and the AI Act, Europe can become the gold standard for responsible AI. GBS centers are ideal for piloting AI systems that are fair, transparent, and have a human in the loop
- Creators of modular data products: GBS centers can lead the charge in creating well-governed, reusable data assets. Imagine a harmonized dataset that can be used for forecasting, logistics, and marketing, speeding up insights
- Accelerators for edge-enabled services: GBS centers can integrate edge computing into workflows, bringing intelligence closer to where data is created. This reduces delays and makes operations more responsive, especially for industrial or retail clients
- Demonstrators of responsible AI in action: The world needs real examples of AI that is both effective and responsible. Europe's GBS hubs can show how it's done, deploying AI copilots that assist human agents while maintaining trust
- Champions of quantum-resilient systems: GBS centers can start embedding post-quantum cryptography (PQC) into core systems, securing critical infrastructure for the long haul
Why tech scaling in Europe so hard
Even with a clear opportunity, many European companies struggle to scale their tech ambitions. The hurdles aren't about a lack of intent; they're more structural.
- Digital talent gaps: The biggest roadblock is people. There's a serious shortage of AI engineers, cloud architects, and security pros. A recent Genpact study also found that European professionals spend less time on training than their counterparts in China and India, highlighting a learning culture gap in the graph below
- Fragmented data and platforms: Data often remains stuck in silos, making it hard to build trusted AI pipelines. Many companies are dealing with a dozen or more core administrative systems, a complexity that slows everything down
- Regulatory over-caution: While Europe's regulations are a strength, uncertainty and over-interpretation can stall innovation. Companies sometimes wait for definitive guidance before launching new projects
- Legacy architectures: Many large European firms have grown through acquisitions, resulting in a patchwork of old systems. Result? A reluctance to overhaul legacy systems
These barriers are not mainly financial. The real challenge is building the organizational muscle for speed and autonomy, not just buying the tools.
Calls to action: What you must do
To close the digital gap, European enterprises need to act now. Here are seven strategic imperatives:
- Accelerate platformization: Move from isolated projects to integrated platforms. Use multicloud for flexibility and edge computing for real-time decisions
- Invest in full-stack capabilities: Build for resilience by integrating infrastructure, data, AI, and security into a single architecture
- Build AI fluency everywhere: It's not just an IT job anymore. Everyone needs to understand how AI and automation create value. For example, in a manufacturing firm, a procurement analyst can use an AI assistant to suggest optimal suppliers based on historical pricing, quality scores, and contract terms. At the same time, a claims adjuster can benefit from an AI copilot that prescreens claims for anomalies and recommends next steps
- Create scalable, reusable digital assets through digital twins: Build AI agents, data pipelines, and automation modules once and scale them across the business. This turns scale into a competitive advantage. For instance, a manufacturing plant can simulate its assembly line to get a snapshot of different production schedules and equipment maintenance scenarios, helping managers optimize throughput while minimizing downtime and operational risks
- Embed security and compliance by design: Make security part of innovation from day one. Prepare for quantum threats by adopting PQC and zero-trust principles now
- Foster cross-border collaboration: Use mature GBS hubs to integrate AI models and standardize data across geographies. This reduces duplication and speeds up learning
- Use regulatory advantage to reimagine business: Treat the AI Act not as a hurdle but as a catalyst. Build business models that are auditable, explainable, and trustworthy
From potential to performance
Europe is at the crossroads of opportunity. The risk of inaction is real, as competitors in the US and Asia sprint ahead. Incremental improvements won't cut it.
The message is clear: Reinventing your business is no longer an option. It's the price of staying in the game. By building a resilient, intelligent enterprise backbone, Europe can redefine what business services mean in the age of AI. It's time to move from vision to execution and turn potential into performance.
The article is based on the 2025 ABSL report, in which Genpact shared its view on "Technology as a strategic differentiator for Europe's business services sector."
