Digital adoption, AI integration, and labor productivity: empirical insights from the European Union

Digital transformation has become a key driver of organisational competitiveness and economic performance, yet its contribution to labour productivity remains uneven across European Union (EU) member states. This study examines the relationship between enterprise artificial intelligence (AI) adoption, workforce digital skills, and labour productivity using a quantitative cross-sectional design based on secondary data from Eurostat and the Organisation for Economic Co-operation and Development (OECD). Labour productivity was measured using the Eurostat indicator Labour productivity per person employed and hour worked (EU27_2020 = 100). Descriptive statistics, Pearson correlation analysis, and Ordinary Least Squares (OLS) regression were employed to analyse data for the 27 EU member states. The findings indicate positive bivariate associations between labour productivity and AI adoption, digital skills, and GDP per capita. However, after controlling for economic development, GDP per capita emerged as the only statistically significant predictor of labour productivity. At the same time the independent effects of AI adoption and digital skills were no longer significant. These findings suggest that digital technologies alone do not guarantee productivity gains. The study contributes to digital productivity literature by demonstrating the importance of complementary economic capabilities in translating digital transformation into improved labour productivity across the European Union.