Study of 12,000 EU Firms Finds AI's Productivity Gains Are Real

Source: Slashdot

Key Findings

• AI adoption causally increases labour productivity by 4 % on average across the EU.
• The productivity boost occurs without reducing employment in the short run.
• Gains are concentrated in medium and large companies: 45 % of large firms have deployed AI versus 24 % of small firms.
• Complementary investments matter greatly:
  • Each additional percentage point of spending on workforce training amplifies AI’s productivity effect by 5.9 %.
  • Each additional percentage point on software and data infrastructure adds 2.4 %.

Methodology

Researchers from the Bank for International Settlements and the European Investment Bank used an instrumental‑variable approach:

1. Matched EU firms with comparable US firms based on sector, size, investment intensity, and other characteristics.
2. Used the AI adoption rates of those US counterparts as a proxy for exogenous AI exposure among European firms.

Implications

• AI can boost productivity without immediate job losses, suggesting a short‑run win‑win for firms and workers.
• The strong role of training and infrastructure underscores the need for complementary policies to maximize AI’s benefits.

Original story available on Slashdot.