AI is affecting productivity and jobs in Europe — but not in the way you thought
EditorialThursday, 19 February 2026 at 09:50
Europe's in a weird spot with AI. Their researchers lead the world. Industrial capacity is strong. But actually using AI? Different story. A new study tracked over 12,000 European companies and finally gives us real numbers on what AI actually does.
Key Points:
- AI adoption increases EU labor productivity by 4% with no short-term job losses detected
- Medium and large firms see substantially stronger gains than small businesses (10-49 employees)
- Training investment multiplies AI productivity effect by 5.9x per percentage point spent
- Sweden and Netherlands match US adoption rates; Romania and Bulgaria lag at 28%
- Capital deepening mechanism augments worker output without displacing employment in short run
Productivity Goes Up, Jobs Don't Disappear
AI raises productivity by 4% on average across EU companies. That's solid but nowhere near the explosive growth some people predicted. No boom happening here—just steady improvement you can measure.
The surprise? Zero job losses short-term. None. Companies using AI didn't fire workers. They just got more work done with the same people. Workers finish tasks faster. They make better decisions with AI helping them. Economists call this "capital deepening."
Wages went up at companies using AI too. Both total payroll and individual worker pay rose. Whether that lasts or only helps highly skilled workers stays unclear.
Big Companies Win, Small Ones Lose
Small firms with 10-49 workers barely benefit from AI. Medium and large companies? Huge gains. The gap is brutal and growing.
This makes sense when you think about costs. Large firms already built data systems. They hire tech experts easily. They can redesign entire workflows. Small businesses lack all that.
Europe relies heavily on small companies. This uneven benefit creates real problems. The productivity gap between big and small firms will keep widening unless policies change.
Where AI Actually Gets Used
Average adoption looks similar—EU and US both hit around 36% of firms using AI and big data analytics in 2024. Look closer though and things break down fast.
Sweden and Netherlands match US rates. Romania and Bulgaria sit around 28%. That gap existed since 2019 and got worse recently. Good financial markets matter enormously for AI rollout.
Training Beats Technology
Just buying AI software does almost nothing. Real gains come from what companies do alongside buying AI.
Spend an extra percentage point on software and data systems? AI's effect grows by 2.4 percentage points. That's decent.
Spend an extra percentage point on worker training? AI's effect jumps by 5.9 percentage points. Training crushes everything else for getting value from AI.
Companies need what researchers call "fusion skills." That means prompt engineering. Data management. Keeping humans involved in AI decisions. These skills help humans and AI work together instead of replacing people.
What Governments Should Do
Europe needs policies helping small firms grow big enough to benefit from AI. That requires better financial markets pushing money toward innovative smaller companies. The EU Savings and Investment Union matters here.
Paying for AI software licenses misses the point entirely. Governments should pay for integration work, workflow redesign, and training programs instead.
The study offers some comfort about immediate job losses. But researchers warn this might be temporary. As AI gets better and companies learn to use it properly, job cuts could start later. Pay raises might only go to skilled workers, making inequality worse.
The 4% productivity gain is real. Big companies with training budgets getting most benefits is also real. Small businesses getting left behind is real too. That's Europe's AI situation right now—measurable improvement distributed extremely unfairly.
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