FRANKFURT, (Reuters) – The Eurozone’s labour productivity growth surged in the wake of the pandemic. However, many of these gains have been at risk due to firms’ rush to adopt digital technology. A Wednesday study by the European Central Bank showed that this is a significant increase in the Euro zone’s labor productivity.

Europe has experienced a slowing in productivity growth over the years. It is keeping an eye on global economic expansion. Economists believe that digital solutions will be the COVID-19 panademic’s silver-lining.

The ECB stated in an Economic Bulletin article that data so far suggests this. They claim that labour productivity has increased by more than 2% since the beginning of recovery.

The ECB stated that “the pandemic has accelerated digitalisation, which had started long before the crisis”,

The ECB stated that although some of the transition to remote work might be reversed over time, others are likely to persist… which could lead to significant gains in productivity and employee well being.”

The shift comes with risks.

Unlike many other crises the pandemic didn’t lead to mass evacuation of low productivity companies. Government guarantees kept them afloat, which halted “creative destruction”, as it is usually called.

It is possible that the redistribution and distribution of labour could be reversed.

According to the ECB, businesses were forced to stop many face-to–face interactions due to the containment measures. This resulted in activity being redistributed. It accounted for between 30% and 40% of the growth in labour productivity.

“It is not clear to what extent the contribution of sector reallocation will persist over time – the impact already seems to be declining in the second quarter of 2021, and this may accelerate as containment measures are gradually removed,” the ECB added.

The disruption of education and training could also be caused by the lockdown. Additionally, current supply chain bottlenecks can force firms to locate new suppliers or supply routes which may impact their productivity.