This analysis, commissioned by the European Commission suggests that, if managed well, technological change could deliver substantial employment gains across the continent. However, these benefits are unlikely to be evenly distributed. Differences between countries, regions, and demographic groups risk deepening existing inequalities unless proactive policy measures are put in place.
A Net Employment Boost — Even After Demographic Change
By 2040, AI and other emerging digital technologies are forecast to expand employment in Europe by an average of 5.9%, equivalent to around 11.8 million additional jobs. Under more optimistic scenarios, job creation could reach as high as 27.5 million, while more pessimistic assumptions still point to modest gains.
When demographic trends such as population ageing are taken into account, the overall impact remains positive. Total employment is projected to increase by an average of 6.6%, or roughly 13.1 million jobs. These findings challenge widespread fears of large-scale technological unemployment and suggest that, at an aggregate level, digital transformation is more likely to create jobs than destroy them.
Uneven Gains Across Countries and Regions
While the overall picture is positive, the distribution of employment gains across Europe is highly uneven. Among major economies, Germany and Spain are expected to benefit the most from technological change. Their relatively strong industrial bases, higher digital uptake, and more favourable demographic trends position them well to capture new employment opportunities.
In contrast, France and Italy are projected to see weaker gains. These differences reflect variations in industrial structure, the pace of digital adoption, and population dynamics. More broadly, the analysis points to increasing regional polarisation. Job losses are expected to be concentrated in peripheral and structurally weaker regions, including parts of Southern and Eastern Europe, Romania, and rural areas of France.
Without targeted intervention, technological change could therefore exacerbate existing regional divides, reinforcing patterns of economic concentration in already prosperous urban and industrial centres.
Who Benefits — and Who Is at Risk?
The employment effects of AI and digital technologies also vary significantly across demographic groups.
High-skilled workers are projected to benefit the most, with employment for this group increasing by 22.7% by 2040. These workers are more directly exposed to AI technologies that enhance productivity, support complex decision-making, and create new high-value roles.
Women are also expected to see stronger employment gains than men (7.2% compared to 4.8%). This reflects their relatively higher representation in occupations and sectors that are less exposed to automation and more likely to benefit from digital augmentation.
Prime-age workers aged 25–64 are forecast to experience solid employment growth of 6.2%. In contrast, outcomes for middle-skilled workers are mixed, reflecting both displacement risks and opportunities for job transformation.
Low-skilled workers and young people aged 15–24 face the greatest challenges. Low-skilled workers are more affected by AI-complementary technologies that automate routine tasks without necessarily creating new roles at the same skill level. Weaker outcomes for young people reflect their concentration in part-time and service-sector jobs, as well as longer periods spent in education, which delay labour market entry.
Policy Choices Will Shape the Outcome
Maximising the employment benefits of AI is not automatic. It depends critically on proactive and well-designed policy responses.
Investments in reskilling and upskilling are essential to help workers adapt to changing job requirements and transition into growing occupations. Targeted support for young people — including apprenticeships, high-quality vocational training, and smoother school-to-work pathways — will be crucial to prevent long-term scarring effects.
Promoting labour mobility can also help mitigate displacement risks by enabling workers to move across sectors and regions as new opportunities emerge. At the same time, rising regional polarisation highlights the importance of place-based policies. These should combine investments in digital infrastructure, skills development, and local innovation ecosystems, particularly in structurally weaker regions that risk being left behind.
A Window of Opportunity
AI and digital technologies present Europe with a significant opportunity to boost employment and productivity. But without deliberate action, their benefits may accrue to a limited set of countries, regions, and workers. The coming years will be decisive. With the right mix of skills policies, regional investment, and inclusive labour market strategies, Europe can ensure that technological progress translates into shared and sustainable employment growth.
