Despite cultural similarities and technological progress, the productivity gap between Europe and the United States not only persists – it’s growing.
Euronews spoke with new technology market expert Dawid Osiecki, who recently co-authored a 40-page report analysing economic development on both sides of the Atlantic, about why this is happening and what might change.
“We recently conducted a study that clearly shows: the difference between the US and Europe isn’t just about money,” Osiecki said.
“It’s also about the number of large companies that can effectively implement new technologies, including AI” or artificial intelligence.
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“Comparing data since 1996, we see very clearly that the US has emerged more effectively from successive crises – the 2008 financial crisis, the pandemic, and the current one related to AI transformation,” Osiecki said, adding that each crises led to increased production in the US.
But in Europe, the response has been “stagnation,” he added.
The key differences? Investments and the structure of the economy.
The US stock market is dominated by the so-called Big Tech companies – the seven largest technology companies that not only generate enormous value growth but also effectively implement the latest technologies.
As for Europe, “we didn’t seize this opportunity,” Osiecki said.
The economist and former Italian prime minister Mario Draghi’s report on how to improve the European Union’s competitiveness indicates that AI could be Europe’s chance to close the gap with the US.
But even here, the situation is not simple. European workers claim to understand the benefits of AI by a whopping 95 per cent, yet two-thirds fear losing their jobs.
Meanwhile, three-quarters indicate they lack meaningful access to AI tools in the workplace. And one-third say they do not have training or education that would allow them to better use new technologies.
Fewer giants, more mid-sized companies
Data collected in a study of 800 companies from six European countries shows that the largest European companies (valued over $10 billion or €8.68 billion) are adopting AI at a rate comparable to American giants. The challenges begin among smaller companies.
“The problem lies at the bottom. Smaller companies, especially those valued between $1 billion and $2.5 billion [€2.2 billion], are three times less likely to successfully implement AI than their American counterparts,” Osiecki said.
Furthermore, the European economy is more fragmented: there are more mid-sized companies, but fewer global giants. These smaller organisations often have limited access to technology, tools, and specialised staff.
Company size isn’t the only factor. Sector differences are equally significant. The aerospace, defense, and advanced industries are leaders in AI use in Europe. Meanwhile, the public and energy sectors lag significantly behind, with differences reaching dozens of percentage points.
Results vary similarly between countries. Switzerland, Germany, and France lead the way, but after taking into account sectoral structure, the United Kingdom emerges as the leader, with AI adoption rates exceeding 50 per cent.
On the other hand, while France has large companies and high technological ambitions, it shows surprisingly low adoption rates – around 30 per cent. Spain and Italy are at the bottom of the rankings.
Investment is the biggest challenge, according to Osiecki.
Between 2013 and 2023, investment capital in new technologies in the US was 5 to 7.5 times greater than in Europe. At the same time, European companies tried to compensate with organisational differences – to no avail.
“You can’t just tighten your belt for a decade and expect results. You have to invest, train, and implement new technologies with courage,” Osiecki said.
How to bridge the gap
European bureaucracy is often perceived as a barrier to innovation.
According to Osiecki, this is not a problem for the largest players in Europe.
“For smaller companies, however, regulations can be an excuse or an obstacle,” he added.
In his opinion, the key is not only simplifying regulations but faster decisions, greater courage, and mass technological education.
The EU has ambitious goals: by 2030, 75 per cent of companies should use cloud technologies and AI, and at least 20 million citizens should possess advanced digital skills.
Increasing investment in new technologies, supporting medium-sized companies in adopting AI, bridging the gap between sectors and countries, unlocking tools for employees, and providing them with training will be crucial, Osiecki said.
“If we don’t do this, European productivity will continue to lag behind. And with it, the competitiveness of the entire continent,” he said.
