Former minister and OECD head urges Australia not to adopt migration caps, with research showing migrants boost employment

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Australia’s mainstream political parties are being warned not to adopt populist policies such as migration caps to address voters’ grievances over the cost of living.

Instead, Australia’s longest-serving finance minister, Mathias Cormann, is urging politicians to deliver housing, real wage growth and lower energy costs by boosting productivity.

• OpenAI's Alexander Embiricos said the AI era gives a choice: work more, or work less.
• He's in charge of Dots, the company's new always-on work assistant.
• AI is often pitched as freeing up time. Embiricos responded to the idea that it might add more work.

As the competitive AI race pushes tech workers into long hours, the head of OpenAI's new Dots product says AI gives people another option: work a whole lot less.

Alexander Embiricos, who leads OpenAI's enterprise product and helms the new Dots agent tool, told a crowd at TechCrunch's Disrupt conference on Thursday that AI's capabilities have created something of a fork in the road for workers. You can grind to meet the moment. Or you can use AI to kick your feet up a little.

"We basically have a lot more choice now," he said.

Embiricos made the comments after a reporter asked about when AI systems will actually deliver more free time. The reporter shared an anecdote where an OpenAI employee used a ChatGPT mobile feature to work in their car and on a plane — not exactly liberated by the new tech.

Embiricos said that the moment has already arrived where a worker can "outsource" tasks to AI and do less work. Then again, some people are so excited about AI's potential that they feel like it's an "interesting, ripe moment" to put in extra hours.

"I think that's why a lot of people are motivated to work very hard right now. That includes myself," he said. "But I think actually there is this choice, and there's totally this other setup where you could delegate a ton more things."

OpenAI is billing its Dots tool as a workplace assistant, always on and capable of proactively handing tasks and sorting to-dos. Embiricos uses his Dot often in Slack, he said, engaging on various threads.

His perspective illustrates how early companies are in their journey to adopt AI tools. Most companies have not yet automated their work tasks, and many workers are still debating how much to use the tools. Early AI adopters, meanwhile, can sprint through some work that used to take days or weeks, especially in software engineering.

Embiricos summed up the situation he feels workers are in: "You either choose: do you expand the ambition of what you can do, or do you do less? I do think we're there."

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Growth potential across Central and Eastern Europe has fallen sharply from the levels seen around EU accession, with ageing populations, weak productivity, Chinese competition and slower German industry increasingly testing the region’s economic convergence.

The economic model that transformed Central and Eastern Europe after EU accession is losing momentum, according to the International Monetary Fund, which is warning governments that structural reforms are needed if the region is to continue narrowing the income gap with Western Europe.

Carlos Mulas-Granados, the IMF’s regional representative, said on Tuesday that medium-term growth potential across Central and Eastern Europe had declined to around 2.5 per cent, compared with roughly 5 per cent before countries in the region joined the European Union.

The slowdown does not mean that every economy is stagnating. Poland continues to grow faster than much of Western Europe, while the Czech economy has recovered from recent shocks. The concern is instead about the underlying rate at which these economies can expand once temporary fiscal stimulus, EU funding and post-crisis recoveries are stripped out.

Several of the forces behind the region’s earlier success are becoming weaker.

EU accession opened access to the single market, attracted foreign investment and integrated Poland, Czechia, Slovakia and Hungary deeply into European industrial supply chains. German manufacturers in particular moved production eastwards, taking advantage of lower labour costs, skilled workforces and geographic proximity.

That process generated rapid gains in productivity and incomes. It cannot simply be repeated.

Demographics are one of the most immediate constraints. Working-age populations are shrinking across much of the region while ageing increases spending requirements for pensions, health care and social support.

The IMF’s country assessments illustrate the problem. Its assessment of Poland says demographic pressures are mounting even as labour productivity remains comparatively strong, and calls for higher labour participation, better skills and deeper capital markets.

In Slovakia, the Fund expects growth of only 0.9 per cent this year and says adverse demographics and weaker productivity are weighing on the medium-term outlook. The economy remains particularly exposed to manufacturing and the automotive industry.

The Czech Republic faces a similar structural constraint. The IMF estimates its medium-term potential growth at around 1.8 per cent, with population ageing and modest productivity gains limiting further convergence.

External conditions have also changed.

Germany, the region’s principal industrial partner, has experienced prolonged weakness in manufacturing. Central European producers therefore face softer demand from the market around which many of their supply chains were originally built.

At the same time, China has moved from being primarily a source of imports and components to a direct competitor in sectors where Central Europe has substantial industrial exposure, including cars, batteries, machinery and electrical equipment.

That combination is particularly difficult for economies built around export-oriented manufacturing.

The problem overlaps with the wider European competitiveness debate. EU Today reported in July that only 15.7 per cent of the reforms recommended in Mario Draghi’s competitiveness report had been fully implemented at that stage, with important work still outstanding on capital markets, energy and investment.

For Central Europe, progress on those issues has a direct bearing on growth. Smaller national capital markets make it harder for companies to finance expansion. Fragmented energy systems add to industrial costs, while limited access to venture capital can restrict the development of businesses outside established manufacturing sectors.

There are significant differences between countries. Poland’s larger domestic market gives it more insulation from industrial weakness elsewhere and the IMF expects relatively strong growth. Hungary has faced a different combination of weak investment and fiscal constraints, while Slovakia’s dependence on car production leaves it particularly exposed to changes in the European automotive sector.

EU funding remains an important source of investment across the region, particularly for infrastructure and modernisation. But EU transfers cannot by themselves replace improvements in productivity.

The IMF’s argument is therefore less about an immediate recession than about the end of an unusually favourable period of convergence.

Central Europe entered the EU with lower wages, substantial scope to import Western technology and a powerful incentive for Western European manufacturers to move production eastwards. As those gaps narrow, future growth depends more heavily on innovation, skills, investment and domestic productivity.

The region is still converging with Western Europe. The question raised by the latest IMF warning is how quickly that process can continue once the economic advantages that powered its first two decades of EU membership become less powerful.

European companies are adopting artificial intelligence rapidly, but adoption alone will not close the technology gap with the United States. The larger problem lies in investment, scale, energy and the extent to which businesses are prepared to rebuild their operations around AI.

Europe’s artificial-intelligence problem is changing. The immediate issue is no longer whether European companies will use AI. They already are. The harder question is how they are using it, how quickly successful companies can scale, and where the economic gains from the technology will ultimately be captured.

The latest figures show rapid adoption. In 2025, 20 per cent of EU companies with at least 10 employees were using artificial intelligence, up from 13.5 per cent a year earlier. Among large companies the figure reached 55 per cent. Denmark led at 42 per cent, followed by Finland at almost 38 per cent, while Sweden and Belgium were both at about 35 per cent.

Those numbers describe adoption, but not how deeply AI has been integrated into companies.

Kristalina Georgieva, managing director of the International Monetary Fund, drew a distinction during a meeting of EU finance ministers in Dublin on 21 September. US companies are increasingly using AI to overhaul entire business processes, she said, while European companies tend to apply it much more narrowly.

This is where the productivity gap becomes important. Replacing a particular administrative task with an AI tool may cut costs. Redesigning production, logistics, customer management and decision-making around the technology can alter the economics of an entire company. The IMF estimates that AI could eventually add between 0.1 and 0.8 percentage points to annual global potential growth.

Europe already has weaker productivity growth than the United States. If American businesses extract more output from the same technology because they reorganise around it more quickly, AI could widen rather than reduce that difference.

The investment gap is much larger

Capital is accumulating heavily in the United States.

The 2026 Stanford AI Index puts US private AI investment at $285.9 billion in 2025 — more than 23 times the $12.4 billion recorded for China. In generative AI, American investment exceeded the combined total for China and Europe by a wide margin.

Europe does not lack start-ups or technical expertise. Its difficulty becomes more pronounced when companies need large amounts of capital to move from promising businesses to international competitors.

A European Commission-backed examination of AI financing found that European investors provide most funding for EU AI start-ups in rounds below €10 million, but their participation falls to 26 per cent in deals above €25 million. Much of the late-stage financing instead comes from the US and UK.

The problem extends beyond AI. The European Investment Bank has found that EU scale-ups raise only about half as much capital as comparable Silicon Valley companies. Companies that cannot find sufficient growth capital in Europe often turn to foreign investors, buyers or stock markets.

Europe can therefore produce technology without necessarily retaining the companies that turn it into large businesses.

Compute requires capital — and electricity

Brussels is attempting to address another part of the problem through infrastructure.

Under the EU’s AI Continent Action Plan, the Commission is expanding AI factories based around European high-performance computers and plans larger AI gigafactories. InvestAI is intended to mobilise €20 billion for the gigafactory programme alone.

Compute, however, cannot be separated from energy.

Data centres already consume around 3 per cent of European electricity, according to the IMF, while AI-driven demand could triple by 2030. EU Today has previously examined how the Commission’s push for greater computing capacity is colliding with electricity, grid, water and permitting constraints across Europe.

The shortage of computing capacity is not uniquely European. A reported dispute over access to Google’s Gemini models showed that even the largest US technology groups can encounter limits on available AI compute. Europe enters the same contest with fewer hyperscale cloud providers, less domestic frontier-model infrastructure and high industrial electricity prices.

Regulation is only part of the explanation

The AI Act inevitably occupies much of the European debate. Most of the framework entered a new enforcement phase in August, although EU institutions have delayed important obligations covering high-risk systems. As EU Today reported following final Council approval, some high-risk requirements will now apply from December 2027 and August 2028.

Regulatory costs can affect investment and the speed at which companies introduce new products. They are not, however, a complete explanation for the transatlantic gap.

Changing the AI Act would not on its own produce deeper European capital markets, cheaper electricity, faster grid connections or larger technology companies. Nor would lighter regulation ensure that European businesses redesign their operations around AI.

Europe retains considerable strengths. Seven of the ten highest-ranked countries in the IMF’s AI preparedness index are European. The continent includes semiconductor-equipment leader ASML, advanced research centres, industrial engineering expertise and sectors such as pharmaceuticals, aerospace, automotive manufacturing and machinery where specialised AI can generate substantial productivity gains.

The problem is converting those assets into economic scale.

Europe has spent several years developing rules for artificial intelligence. It is now building computing infrastructure and trying to mobilise capital. The next stage will take place largely outside Brussels: inside companies deciding whether AI is another software tool or a reason to redesign the way they operate.

If European firms remain users of predominantly American models and infrastructure while US companies capture most of the investment, scaling and productivity gains, rising AI adoption will not by itself close the gap.