How AI Could Put the US Ahead of Europe

AI is everywhere from your Google (GOOGL) search to new laptops. It’s the new big thing, the next frontier. And if you believe some researchers, it’s the thing that could revolutionize labor productivity and change the world in the process.

Productivity Divide

The U.S. has been quick to embrace artificial intelligence, so it stands to reason that it will see the fruits of its labor sooner. In Europe, things look differently, with AI adoption being hindered by regulatory concerns. Over time, this could result in European labor productivity falling behind that of the U.S., which could weigh on economic growth, according to a report from the McKinsey Global Institute .

The U.S. has another advantage when it comes to the accelerated adoption of new technology: proximity. Many major industry players are U.S.-based stateside, including companies like OpenAI and Anthropic.

Technology Tradeoffs

There is already a productivity gap between the U.S. and its European peers: Since 2019, productivity in the U.S. grew 6% but just 0.6% in Europe, according to European Central Bank head Christine Lagarde.

But if Europe accelerates its adoption of emerging technologies like AI, it could see annual productivity growth of 3%, according to the McKinsey Global Institute report.

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