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While the US has largely pursued minimal regulatory oversight in AI development, Europe has taken a different approach. The Data Protection Act (GDPR) and the recent AI Act align more closely with local workers’ laws and unions, setting the continent on a separate path.
A joint study from the International Labour Organisation (ILO) and Poland’s National Research Institute (NASK) found that Europe — alongside Asia — is among the most exposed regions to AI. Studies indicate that one in four jobs globally are at risk of being transformed by AI. This concern is heightened given Europe’s significant shortage of skilled workers.
“AI’s capabilities are still emerging, making it too early to predict its full impact,” Adam Maurer, COO of Connecting Software, a tech company operating across Europe, told TNW.
Big Tech companies have frequently carried out mass layoffs driven by both revenue concerns and the belief that AI can replace many employees. However, some initiatives have been problematic. At Klarna, for example, they replaced 700 workers with AI but recently hired humans back. The CEO admitted making a “mistake” when replacing workers.
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Maurer argued that while AI will certainly replace some jobs, it could also make others more valuable. In the EU, labour laws and regulations will shape how this transition impacts jobs. Tech leaders believe these regulations can lead to an AI future that benefits both workers and businesses.
Some executives expect the EU to step in and regulate job displacement, but argue that such measures would hinder growth and discourage startups from operating within the union. However, not all business leaders agree. Volodymyr Kubytskyi, head of AI at MacPaw, a Ukrainian software company, believes that while traditional work processes will be disrupted by AI, it’s crucial to redesign these processes before the system collapses.
Kubytskyi argued that the AI Act, which aims to set safety, transparency, and ethical standards for AI, lacks socio-economic impact considerations. He suggested that amendments to the act are necessary but unlikely in the near future.
Roman Eloshvili, founder of ComplyControl, a UK compliance company, noted that while the AI Act covers safety, transparency, and ethics, it falls short on socio-economic impacts, particularly on jobs. He expected that over time, measures like mandatory employer-led upskilling or protections for displaced workers would be implemented to address these issues.
Dario Amodei, CEO of Anthropic, suggested a “AI token” tax as another policy idea. This tax could generate revenue from AI usage and redistribute the funds through reskilling programs or support for affected industries.
European labor unions have expressed concerns about AI job displacement. The European Trade Union Confederation (ETUC) issued an open letter warning against monopolizing AI by a few tech companies, which would undermine efforts to ensure positive impacts on workers’ quality jobs and society.
Despite these challenges, some executives believe that collaboration between businesses and unions can lead to effective AI integration. For instance, joint upskilling initiatives can improve working conditions while mitigating job displacement concerns.
Regulations and labor protections in Europe are not necessarily obstacles but could be a competitive advantage. Companies should embed responsible AI practices, bias checks, explainability, and human oversight into their product cycles. This approach can transform the AI Act from a compliance hurdle into a market differentiator.
Europe faces competition from traditional tech powerhouses like Asia and the US, as well as emerging markets in Latin America. The lack of significant investment in technology is hurting European businesses, with many finding that the initial cost of AI implementation was higher than expected. However, stringent regulations can also be a premium brand for sectors valuing trust and data privacy.
In summary, the EU’s Act on AI has set a path for protecting jobs while fostering innovation. The key challenge lies in balancing these goals through collaboration between businesses, unions, and policymakers to ensure that AI development benefits both workers and industries.
📚 Reading Comprehension Quiz
According to the passage, which of the following statements best describes Europe's approach to AI development compared to the US?
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