ABSTRACT

Technological transformation, changes in the structure of workplaces, economic and environmental pressures shape business models and the behavior of participants in the labor market in all European countries. This paper explores the impact of artificial intelligence (AI) on the labor market in Europe, which can still be assessed as uncertain. Focusing on the transformation of business models, the paper identifies key challenges: job polarization, the growing digital skills gap and the need for urgent reskilling initiatives. Analyzing empirical data, it explores how AI is redefining labor demand by pushing certain workers out of the market and creating a need for workers with specific technological competencies. The results reveal considerable disparities in AI adoption across European countries, with Scandinavian economies demonstrating significantly higher levels of enterprise AI usage than Southeastern and Eastern European countries. The findings further indicate that skills shortages, demographic pressures, and limited technological readiness represent major barriers to successful business transformation. Scenario analysis suggests that the future resilience and competitiveness of European labor markets will depend on technological sovereignty, continuous workforce adaptation, and effective public policies supporting innovation and social inclusion. Sectoral evidence confirms that the effects of AI differ substantially across industries, requiring tailored approaches to workforce development and digital transformation. The results indicate the necessity of synergy between business strategies and public policies in order to mitigate structural disruptions in the labor market and preserve the well-being, safety and protection of those who suffer the negative effects of artificial intelligence on wages and employment.