Artificial intelligence promises to reshape economies worldwide, but firm-level evidence on its effects in Europe remains scarce. This column uses survey data to examine how AI adoption affects productivity and employment across more than 12,000 European firms. The authors find that AI adoption increases labour productivity levels by 4% on average in the EU, with no evidence of reduced employment in the short run. The productivity benefits, however, are unevenly distributed. Medium and large firms, as well as firms that have the capacity to integrate AI through investments in intangible assets and human capital, experience substantially stronger productivity gains.

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