The European Central Bank’s chief economist said on Monday that artificial intelligence could add more than four percentage points to euro zone productivity growth over the next decade, but warned that Europe’s technological disadvantage and high energy costs threaten to limit those gains.
Philip Lane, speaking at an ECB conference in Frankfurt, told delegates that the scale of the benefit would depend almost entirely on how fast businesses adopted the technology. A gradual take-up in line with previous innovations such as the internet would deliver at least 1.5 percentage points of additional productivity growth over ten years, Lane said, while faster adoption reaching at least half the economy could push that figure above four percentage points.
“The greatest impact will be achieved if AI materially boosts the pace of innovation, as rather than just boosting the level of productivity, this could increase the long-run potential growth rate,” he said.
Lane cautioned that persistently high energy costs posed a direct threat to that outcome. Because AI systems consume substantial power, prolonged fuel price pressure would constrain both the construction of new models and the pace of wider adoption.
Europe’s starting position compounds those risks. Lane noted that only around three per cent of euro area patents relate to AI, compared with nine per cent in the US. Euro zone residents pay close to 250 billion euros annually in royalties to foreign patent holders, the vast majority of them American, a figure that reflects the bloc’s deep reliance on imported technology.
Lane partly attributed that gap to Europe’s shallower capital markets, which he said curb the investment needed to scale innovation. Venture capital activity in the euro area has grown, he noted, but the pool of risk capital remains far smaller than in the United States, limiting the ability of domestic start-ups to achieve scale.
Between 2008 and 2021, close to 30 per cent of European-founded unicorns relocated abroad, mostly to the United States, according to a 2026 European Investment Bank report cited in his speech, with better access to capital and regulatory simplicity among the reasons given.
The ECB’s own survey data showed rapid early adoption among workers and firms. The share of employed euro area workers using AI rose from 26 per cent in 2024 to 40 per cent in 2025, outpacing the historical uptake of the internet or personal computers.
Yet only seven per cent of firms reported making significant use of the technology, suggesting it has not yet been embedded in broader corporate processes in ways that historically produce economy-wide productivity gains.
“Ensuring broad access to finance, supporting diffusion among smaller firms and investing in skills and complementary intangible assets will be central to realising AI’s potential while limiting adjustment costs,” Lane said.
