Artificial intelligence and frontier technologies could add up to one percentage point per year to labor productivity growth in the United States, according to an analysis by Luiss Business School based on data from the Global INTAN-Invest project, coordinated by WIPO, the United Nations agency for intellectual property. In Europe, that contribution drops to roughly 0.3 percentage points. The gap is striking, and the data behind it tells a story about how differently economies are absorbing the technology wave now reshaping global growth.
Between 2017 and 2024, about half of American economic growth came from software production and use, alongside research and development of intangible assets. According to the Luiss research, software production alone accounts for more than half of the acceleration in U.S. productivity growth. The same dynamic, however, carries real downsides that the data is only beginning to make visible.
Intangible Investment Crosses $10 Trillion for the First Time
Researchers analyzed 29 economies, representing roughly 57% of global GDP, and found that intangible investments surpassed $10 trillion in 2025 for the first time on record. Software, data, research, user experience design, workforce training, and organizational capital now represent 12.8% of GDP globally, compared with 11.8% for machinery and buildings. Since 2008, investment in intangibles has grown at a rate 3.6 times faster than physical capital, according to the Global INTAN-Invest dataset.
The United States alone accounts for $5 trillion of that annual total, roughly half the global figure. The gap between U.S. intangible investment and the four next-largest economies combined has doubled over the past decade, rising from approximately $1 trillion to $2 trillion.
The United Kingdom and Germany have both moved aggressively toward intangible-led growth, which makes Italy's position particularly notable. Between 2015 and 2025, Italy is one of the few high-income economies where investment in machinery and buildings grew faster than intangible investment. Italian intangible investment grew 1.9% in the most recent year measured, compared with 3.3% in Germany and 2.5% in France. The EU has signaled intent to push member states toward this investment model, and some Italian lending institutions are positioning to support that shift, but the distance from U.S. spending levels remains vast.
The Downside: Jobs at Risk
After mapping the productivity gains, the WIPO-Luiss report is notably quieter on the employment side. The report acknowledges that intangible investment tends to support better-paid professions, and that training will help workers adapt as tasks shift from execution to oversight of automated systems. What it does not estimate is the net number of jobs created versus jobs lost.
Where AI infrastructure has already taken hold, the employment picture is not reassuring. In Hollywood, scenes are already being generated with fully synthetic actors. Employment in the California entertainment sector fell 5.8% in the past year and is down roughly 30% from 2022 levels, a shift that reflects the industry's accelerating adoption of generative tools.
San Francisco's tech startup scene has normalized a different staffing model: companies operating with dozens of AI agents and only a handful of human employees. Cutting headcount frequently accompanies rising performance and lower costs. Even the construction of AI infrastructure itself creates fewer jobs than conventional wisdom might suggest. According to 2008 Nobel Prize laureate in economics Paul Krugman, U.S. data center investment projected to reach approximately $7.5 trillion by 2032 would generate fewer than 20,000 direct jobs, compared with roughly 10 million that equivalent spending in more traditional sectors would have produced under pre-AI-boom economic models.
Young Workers Are Absorbing the First Shock
The clearest signal on employment comes from younger cohorts. According to Stanford economist Erik Brynjolfsson, among workers aged 22 to 25 in occupations most exposed to frontier technology, U.S. employment is already 19% below the level it would have maintained had pre-November 2022 labor market trends continued. November 2022 is when ChatGPT became publicly available.
The mechanism isn't layoffs. It's hiring freezes. Companies simply aren't bringing on the entry-level and junior roles they once did, because AI tools are absorbing a growing share of that workload. This is harder to see in headline unemployment figures, but it compounds over time.
If AI systems become capable enough to replace most human labor in highly skilled professions, what now looks like a sectoral shift in California could spread far beyond Silicon Valley. The WIPO-Luiss data offers a clear productivity case for accelerating AI adoption. The employment case is still being written, and the earliest evidence from the U.S. labor market suggests the costs will not be evenly distributed. Policymakers in London, Brussels, and Berlin will need to watch the next two years of U.S. employment data closely: the hiring patterns forming now among 22-to-25-year-olds are the leading indicator for what comes next across the broader workforce.
