With US hyperscalers driving the AI boom, Europe has so far been broadly absent from the excitement surrounding this technology. But the lesson from past technological revolutions is that the ultimate prize – stronger productivity growth – will depend less on where the technology is developed than on how effectively it is deployed.
So far, progress is slow. While output per hour grew by over 2% in the US in 2025, it barely rose at all in the eurozone and UK. Europe starts from a stronger position than often assumed, however. After the US, European countries are among the best placed to benefit from adopting AI.
Estimates from the OECD suggest labour productivity growth could rise by 1- 1.25 percentage points (PPT) annually in the US and UK, with Germany and France close behind at 0.7-1.1ppts. This would triple the average rate of productivity growth since 2010 in the UK and France and double it in Germany.
AI adoption in Europe has also picked up. EU data show 20% of firms using AI in 2025, 6.5pp higher than in 2024, and an ad-hoc survey by the European Commission conducted between February-March 2026 found just over half of Europeans use AI, with one in four using it at work.
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