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technology8h ago
AI may boost euro area productivity growth by 4% in 10 years, ECB says
Tradingview.com and 2 more
- ECB Chief Economist Philip Lane says AI could lift euro-area productivity by more than 4 percentage points over the next decade, but progress depends on how quickly adoption spreads and energy costs.
- A take-up rate similar to the internet could deliver at least 1.5 percentage points of extra productivity growth in 10 years, Lane notes.
- If AI adoption reaches at least half the economy, gains could exceed 4 percentage points, underscoring the scale of potential impact.
- Lane warns that high energy costs and the energy intensity of AI could slow model development and adoption.
- Europe lags the US in AI innovation, with only about 3% of euro-area patents related to AI compared with 9% in the United States.
- Europe pays roughly 250 billion euros a year in royalties to foreign patent-holders, highlighting dependence on imported AI tech.
- Europe's shallower capital markets are seen as a barrier to scaling AI innovation and investment.
- Policy priorities include broader access to finance, diffusion to smaller firms, and investment in skills and intangible assets.
- The ECB emphasizes that AI gains hinge on adoption speed and energy prices that affect model building and deployment costs.
- AI's greatest long-run impact would come if it materially boosts the pace of innovation, potentially raising long-run growth beyond productivity gains alone.
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