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

A study of more than 12,000 European firms found that AI adoption causally increases labour productivity by 4% on average across the EU, and that it does so without reducing employment in the short run. Researchers from the Bank for International Settlements and the European Investment Bank used an instrumental variable strategy that matched EU firms to comparable US firms by sector, size, investment intensity and other characteristics, then used the AI adoption rates of those US counterparts as a proxy for exogenous AI exposure among European firms. The productivity gains, however, skewed heavily toward medium and large companies. Among large firms, 45% had deployed AI, compared to just 24% of small firms. The study also found that complementary investments mattered enormously: an extra percentage point of spending on workforce training amplified AI's productivity effect by 5.9%, and an extra point on software and data infrastructure added 2.4%.

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