How AI is affecting productivity and jobs in Europe
cepr.org
cepr.org
E.U. patent law takes a very different attitude towards software patents than the U.S. Even if that wasn't the case: “Specialisation” means that no innovation unrelated to AI gets mind share, investment, patent applications. And that's somehow a good thing? Not something you can just throw out there as a presupposition without explaining your reasoning.
I don’t think the authors claim we should have 100% specialisation. They just say that the fact that the EU has fewer AI-related patents as a proportion of the total (less specialisation) is evidence that it is behind in AI. That seems reasonable.
Perhaps it will make patent trolling a bit harder because it is easier to look up existing work and to check if an idea is obvious?
Haha, funny :)
No, it'll be like the rest of the industries that use more AI, they'll spend the same amount of effort (as little as possible) and won't validate anything, and provide worse service, not better. AIslop is everywhere, and seemingly unavoidable for companies to use more and more to cut more corners.
The pattern was consistent: the tools produce confident, well-formatted output that looks thoroughly researched. But more than half the statistics were either distorted or completely fabricated. The worst part was finding the same fake stats appearing across multiple tools - not because they independently verified anything, but because they all absorbed the same bad data from training.
The productivity gains from AI are real, but so is the validation cost. People just aren't accounting for it.
Nowadays an ai assist with a web search usually eliminates the search altogether and gives you a clear answer right away.
for example, "how much does a ford f-150 cost" will give you something ballpark in a second, compared to annoying "research" to find the answer shrouded in corporate obfuscation.
I found it a sad condemnation of how far the tech industry has fallen into enshittification and is failing to provide tools that are actually useful.
Or when asking an LLM for a comparison matrix or pros and cons between choices ... beware paid placements or sponsors. Bias could be a result of available training data (forgivable?) or due to paid prioritization (or de-prioritizing of competitors!)
Yes, there will be people not using adblockers just as there are people today. But no adblocker ever was able to remove SEO spam from googles website, all they did was hiding obvious adds. They didn't improve the search experience.
Unless this bubble popping is truly catastrophic, I don't see this ending a different way.
It is not horrible, it reached the point of absolute excellence. Not for you, the user - but for making money for the creator. Remember, no one paid for web search, so you are the product. If you are the provider of the web search engine, the point of having web search is not deliver the best search result to the user, but maximize the amount of money you can make from the sum of the world population. And google did very good in maximizing their profits, without users turning away from them.
Then SEO will catch up and we'll have spam again, but now we'll be paying by the token for it. Probably right around the time hallucination drops off enough to have made this viable.
I kind of want to become Amish sometimes.
Maybe smaller ones can somehow provide almost comparable but ad-free service, heck even mildly worse but genuine results would win many people over, this one included.
Searching for information is inherently an adversarial process. You want your attention in one place, other actors in the system want it in another. Any solution that doesn't suck will need to be aware of this.
- the anthropic superbowl dig at chatgpt ads
"Anthropic's Super Bowl ad humorously criticized OpenAI's decision to introduce ads to ChatGPT, featuring a scenario where a man seeking advice is interrupted by an unexpected advertisement." - ddg search assist
- amish hackers: https://kk.org/thetechnium/amish-hackers-a/
They might have fixed it in more recent years, but to me that was when the tide started shifting in the mentality behind google search as a product/service
Google gave me more than 2 pages of results, while Bing gave me only 1 page.
After that, both Google and Bing provided countless pages full of results about Hoodoo, Voodoo, Zoodoo and the like.
The impossibility of making exact searches is what annoys me most in modern search engines.
I might make a typo sometimes, but I would prefer to correct myself when that happens, instead of the search engine always assuming that I am a moron that cannot type, thus offering every time "helpful" corrections.
then declined as sponsored results and SEO degraded things
In the 2000s, everything was open because of the ad driven model. Then ad blockers, mobile subscription model, and the dominance of a few apps such as Instagram and Youtube sucking up all the ad revenue made having an open web unsustainable.
How many Hacker News style open forums are left? Most open forums are dead because discussions happen on login platforms like Reddit, Facebook, Instagram, X, Discord, etc. The only reason HN is alive is because HN doesn't make need to make money. It's an ad for Y Combinator.
SEO only became an issue when all there is for crawlers is SEO content instead of true genuine content.
I remember ads everywhere in 2000s.
Interesting point.
> ost open forums are dead because discussions happen on login platforms like Reddit, Facebook, Instagram, X, Discord, etc
Ironically isn't one of the reasons some of those platforms started to use logins was so they could track users and better sell their information to ad people?
Obviously now there are other reasons as well - regulation, age verification etc.
Does this suggest that the AI/ad platforms need to tweak their economic model to share more of the revenue with content creators?
Now AI will give me a confident answer that is outright wrong 20% of the time or kind of right but not really 30% of the time. So now I ask something using an AI chatbot and carefully word it so as to have it not get off topic and focus on what I actually want to know, wait 30 seconds for its long ass answer to finish, skim it for the relevant parts, then google the answer and try to see where the AI sourced its answer from and determine whether it misinterpreted/mixed up results or it's accurate. What used to be a 10 second google search is now a 2-3 minute exercise.
I can see very much how people say AI has somehow led to productivity losses. It's shit like this, and it floods the internet and makes real info harder to find, making this cycle worse and worse and take more and more time for basic stuff.
This was horrible for web traffic, but the utility level was off the charts. It was possible to get accurate results in milliseconds. It was faster than using an LLM.
Now sites put almost no info in the search result headers, to get people to click through. I think this will work on some users, but most will start using LLMs as search by default.
Search engines have gotten so bad that I almost feel forced to try running SearXNG or some other search engine locally. Its a pain to set up, but degooglefication is always worth it.
I don't know if content other than that exists out there any more. Still, I'd rather have no answer than a "top ten $item" list just describing the first page of Amazon results.
I also feel like a really good local LLM can be better. I'd love to get something set up where my searches get sent to the local LLM first, and then to Kagi\SearXNG if it needs more information.
The more mainstream a subject is, the lower the incidence of hallucinations. With google search, the mantra “I can’t be the first with this problem/question” almost always proves to be right.
I’m in the process of restoring a piece of vintage electronics and everytime I ask gemini (fast or thinking) for help I’m getting sent down an irrelevant rabbit hole. It’s taking info from service manuals of other equipment with a similar product number, misinterpreting diagrams, getting electrical workings wrong.
These things aren’t AI. AI can extract certainty from uncertain data. LLMs take data and turn it into garbage.
The result started with 3 "sponsored links" which threw her down the rabbit hole.
This used to be easy.
Currently it is probably just mostly quantity that does the trick w.r.t. training data. So e.g. spam the Internet with "product comparisons" featuring your product as the winner.
It’s been a long time since agents couldn’t even conduct web search and could only riff off their model. But the examples in this thread are things an agent would search for immediately, and agents are leaning harder on tool calls and external info over time, not less.
Used to be.
> Nowadays an ai assist with a web search usually eliminates the search altogether and gives you a clear answer right away.
Now.
Case in point, this past week, I learned Deloitte only recently gave the approval in picking Gemini as their AI platform. Rollout hasn't even begun yet which you can imagine is going to take a while.
To say "AI is failing to deliver" because only 4% efficiency increase is a pre-mature conclusion.
These are not the openclaw folks
Genuinely confused, I don't get it
It’s good money if you can live with yourself, and a mortgage and tuitions make it easy to ignore what you are becoming. I lived that for a few years and then jumped off that train.
Is putting Google Analytics onto your website and pulling a report 'big data analytics'...?
And for the record I think they are absolutely right to be cautious, a mistake in my industry can be disastrous so a considered approach to integrating this stuff is absolutely warranted. Most established companies outside of tech really can’t have the “move fast break things” mindset.
"The Internet" is completely dead. Both as an idea and as a practical implementation.
No, Google/Meta/Netflix is not the "world wide web", they're a new iteration of AOL and CompuServe.
The Internet has been getting worse pretty steadily for 20 years now
If rollout at Deloitte has not yet begun... How on earth did this clusterfuck [0] happen?
> Deloitte’s member firm in Australia will pay the government a partial refund for a $290,000 report that contained alleged AI-generated errors, including references to non-existent academic research papers and a fabricated quote from a federal court judgment.
[0] https://fortune.com/2025/10/07/deloitte-ai-australia-governm...
But obviously people were copy/pasting content to ChatGPT and Claude long before that.
That requires more than a single person's involvement.
[0]: If it contains references to nonexistent papers and fabricated quotes, the conclusions of the report are highly doubtful at best.
... And they did also get blacklisted for the next report.
We sell SAAS software to SMEs in Germany. Forget AI, these guys are stuck in the last century when it comes to software. A lot of paper based processes. Cloud is mainly something that comes up in weather predictions for them. These companies don't have budget for a lot of things. The notion that they'll overnight switch to being AI driven companies is arguably more than a bit naive. It indicates a lack of understanding of how the real world works.
There are a lot of highly specialized niche companies that manufacture things that are part of very complex supply chains. The transition will take decades, not months/weeks. They run on demand for products they specialize in making. Their revenue is driven by demand for that stuff and their ability to make and ship it. There are a lot of aspects about how they operate that are definitely not optimal and could be optimized. And AI provides plenty of additional potential to do something about it. But it's not like they were short of opportunities to do so. It takes more than shiny new tools for these companies to move. Change is invasive and disruptive for these companies. And costly. They take the slow and careful perspective to change.
There's a clean split between people that are AI clued in and people working in these companies. The Venn diagram has almost no overlap. It's a huge business opportunity for people that are clued in: a rapidly growing amount of people mainly active in software development. Helping the people on the other side of the diagram is what they'll be mostly doing going forward. There's going to be a huge demand for building AI based stuff for these people. It's not a zero sum game, the amount of new work will dwarf the amount of lost work.
Some of that change is going to be painful. We all have to rethink what we do and re-align our plans in life around that. I'm a programmer. Or I was one until recently. Now I'm a software builder. I still cause software to come into existence. A lot of software actually. But I'm not artisanally coding most of it anymore.
Personally, I don't think the current frontier models would help the company I work for all that much. The company exists because of the skill in networking and human friendships. The company exist in spite of technological incompetence.
At some level of ability though, a threshold will be reached and a competitor will eat our lunch whole by building a new business around this future model.
It is not going to be a % more productive than our business. It is like the opposite of 0 to 1. The company I work for will go from 1 to zero really quick because we simply won't be able to compete on anything besides those network ties. Those ties will break fast if every other dimension of the business is not even competitive and really in a different category.
For those hearing this at work, better prepare an exit plan.
If the manager doesn’t have ideas, it is they who deserve the boot.
If anyone still resigns that is. They seem to have automated that too.
The governments however have been and continue to be ill prepared to the rising increases of globalisation labor offshoring and automation.
There was a news article yesterday in my EU country about a 50 year old laid off CEO of a small company that continues to be unemployed after a year because nobody will hire him anymore so he lives off welfare and oddjobs and the government unemployment office has no solution.
What happens in the future when AI and offshoring culls more white collar jobs and there will be thousands or tens of thousands of unemployable 50 year old managers with outdated skills that nobody will want to hire or re-train due to various reasons, but they still need to keep working somehow till their 70s to qualify for retirement? Sure you then go to re-train yourself to become a licensed plumber or electrician, but who will want to hire you to gain experience when they can hire the 20-something fresher rather than the 50 year old with bad knees?
Governments are not prepared for this.
I'd say those things are the job of the population itself, via a wide range of pluralistic institutions. The job of governments, which are just specific organizations within a much larger society, is primarily to maintain public order.
I'd agree ONLY IF I'd pay no taxes to the government. But since most middle class people pay 40%+ of their income to the state, then the state now has the responsibility to handle those challenges for us.
But if the state wants me to handle it, then sure I'd do it gladly, they just need to reimburse 90% of my tax payments so I'd have the financial resources to proactively invest in my future security.
But right now we have the worst of both worlds in the west: a huge tax burden on the middle class funding an incompetent state that takes your money, spends it like drunken sailors on bullshit, and when the shit hits the fan, just tells you it's your fault when you fall down, instead of having used your money for societal wide preemptive solutions.
Well, no, we pay taxes for the government to fund the things government is supposed to do and is competent at. Paying the government doesn't make them responsible for or competent to handle anything every problem arising anywhere in society, any more than paying for a Netflix subscription makes Netflix responsible for or capable of handling those problems.
This is really important, because political institutions aren't just bad at handling complex social problems, but when made responsible for them, often get in the way of other individuals, communities, and institutions trying to solve those problems with much better approaches.
> But if the state wants me to handle it, then sure I'd do it gladly, they just need to reimburse all my tax payments so I'd have the financial resources to invest in my future.
Agreed. We should drastically lower taxes, and ensure that most of the resources necessary to improve society are left in the hands of society itself, and not monopolized by a single institution that's subject to perverse incentives.
But if we assume that we're stuck paying the same level of taxes for the time being, and treat those taxes merely as losses, the question reduces to whether we want a monopolistic organization run by people with ulterior motives exercising a controlling influence over our lives and livelihoods -- and often failing to solve those complex problems in the first place -- or whether we would still prefer to solve those problems for ourselves with the resources we have left. And to my mind, the latter is still preferable, even if unhelpful strangers are stealing a good chunk of my resources.
> But right now we have the worst of both worlds: a huge tax burden on the middle class funding an incompetent state that takes your money, spends it like drunken sailors on bullshit, and when the shit hits the fan just tells you it's your fault when you fall down, instead of having used your money for societal wide preemptive solutions.
Yes, that's all true. But to my point above, the only way out of this is not to expect that the incompetent grifters will somehow start behaving like competent philanthropists, but rather to contain them and minimize the grift -- either way, it's still on us to solve our own problems.
Which also includes the education system training you for the labor market. How is the state good at that if what they're training you for is now useless? Also includes the welfare safety net which is now failing to catch everyone falling.
>This is really important, because political institutions aren't just bad at handling complex social problems, but when made responsible for them, often get in the way of other individuals, communities, and institutions trying to solve those problems with much better approaches.
If we know they're bad at this and often responsible for the issues we have, why are we funding them so much?
Norway has their sovereign fund as a premprive solution in case the country hits a rough path in the future.
>but rather to contain them and minimize the grift
And this can only be done peacefully by defunding the incompetent state apparatus.
>either way, it's still on us to solve our own problems
Yeah but you need money for that. And we don't have money because the state is taking half of it.
Does it? That's an assumption many people make, but I'm not sure that this was either the original intent -- public schooling was driven largely as a tool for "liberal arts" and to assimilate immigrants -- nor something that public schooling has ever proven to be particularly good at.
> If we know they're bad at this and often responsible for the issues we have, why are we funding them so much?
Well, most people's main incentive for paying taxes is the threat of being punished for failing to do so.
> And this can only be done peacefully by defunding the incompetent state apparatus.
Agreed entirely.
> Yeah but you need money for that. And we don't have money because the state is taking half of it.
Agreed entirely, and doing away with confiscatory taxation is an important goal. But whether or not the state takes our money is not directly relevant to the question of whether the state is sufficiently trustworthy and competent to assign monopolistic control of critical aspects of our lives to.
And my position on that is that even if we can't roll back taxation, we still shouldn't trust the state with unilateral control over key aspects of our lives and livelihoods, and we'd be better off making do with the resources we retain despite taxation to provide those things for ourselves via other forms of organization or community.
More people without jobs will be a heavy burden on social security systems, so in the end it's literally about starving.
You’re gonna call the people that built everything a burden?
Either we are talking in terms of propagandistic guilt assignment, or we’re talking realpolitics. Either:
1. we can trivially support the “burden” because of automation (no burden); or
2. billionaire resource hoarders (a burden?) do not need the vast majority of their underlings (maybe just a few for Epstein 2.0) and can let them fend for themselves or die off. (It’s literally not even a question of whether they have a big red Automation Button that would sustain the “burden” indefinitely. What incentive do they have to press it?)
[1] I notice scale is a favorite buzzword now
In the end the upper 0.1% get the profit and those who still have jobs have to finance the social security systems. More jobless and less working means the jobless become a burden and in the long run the system will fail.
So you either need to tax automation or the rich. Guess if that will happen.
> In the end the upper 0.1% get the profit and those who still have jobs have to finance the social security systems. More jobless and less working means the jobless become a burden and in the long run the system will fail.
Who is the burden in that sentence?
I am a heavy AI user myself, and sure as hell I am not putting my foot in that place again.
The end results evokes a sense of unease even in laymen, and the more you know about the subject matter, the more wrong it looks..
And 'fixing' it essentially requires as much if not more effort as writing it from scratch.
Commodities are used in an enterprise. Some of the commodities are labor. That labor commodity does work. Involving automation. Eventually (so we are told) those labor commodities manage to automate some forms of labor. Making those other labor commodities redundant.
The labor commodities are discarded. Because why (sigh) use a cart when you now have a car? And you don’t even own a horse.
All of the above is presumably not an insult to human dignity. No. The insult to human dignity is being “kept busy” instead of letting billionaires hoard automation made through human labor.
Of course the real solution is not busywork. But the part about busywork was not on the top of my mind with regards to dignity in this context.
> Personally, unless the alternative is literally starving,
To put a fine point on it, yeah? Ultimately.
Which for the positions/roles involved does make some sense (drafting documents/research).
But it seems like most people are annoyed, because the people shoving those aren't even fully able to show how to leverage the tools, the attitude seems like "you need to do what you do right now under lots of pressure, but also find the time to understand how to use these tools in your own role".
All in all, it's an interesting study, but it leaves out a lot, such as long-term effects, new dependencies, loss of skills, employee motivation, and much more.
> The respondents to the interviews are senior managers or financial directors with responsibility for investment decisions and how investments are financed – for example, the owner, chief financial officer or chief executive officer
> Firms are asked the following question: “To what extent, if at all, are big data analytics and artificial intelligence used within your business? A. Not used in the business. B. Used in parts of the business. C. Entire business is organized around this technology.”
AI adoption is defined as the manager answering B or C.
I'm doubtful that this data is going to be very robust. Some senior tech managers are very keen to talk about AI, while at the same time knowing little about how much AI is actually being used by workers. At other companies you'll have people using free or personal ChatGPT accounts without the knowledge of management.
Also "big data" is not exactly AI.
The productivity information is robust as it's based on company accounts, albeit from 2024 so a couple of years out of date now.
This is just a little wikipedia adlib I did to illustrate my point. (double posted)
"The Phoebus.AI cartel was an international cartel that controlled the manufacture and sale of computer components in much of Europe and North America between 2025 and 2039. The cartel took over market territories and lowered the useful supply and life of such computer components, which is commonly cited as an example of planned obsolescence of general computing technology in favor of 6G ubiquitous computing. The Phoebus.AI cartel's compact was intended to expire in 2055, but it was instead nullified in 2040 after World War III made coordination among the members impossible."
They typically white label Azure LLM offerings or use Github Copilot Enterprise and sign everyone up wholesale.
Some with competent IT dept wrote their own router and offer multiple models from multiple vendors and present it as "<company name> chat".
> This was mostly due to second line pushing back because of data protection, data privacy and all other regulatory requirement and bureaucratic paperwork
Fintec startup. Fintech. Handling people's money. Handling a lot of extremely sensitive data. Complaining that they have to deal with some "bullshit bureacracy about the things like privacy and data regulations or something".
Really? Really?!