Closing the technology gap to reduce labour productivity disparities across Europe is crucial for the
European cohesion policy. This article explores the sources of labour productivity growth in
Europe over the period 1993–2007 in light of the enlargement process. Labour productivity growth
has been mostly driven by capital accumulation. New Member States have significantly reduced
their inefficiency and their technology gap. Disparities in the levels of labour productivity are still
substantial and, to a considerable extent, they can be attributed to technology gap differences. This
raises concerns about the process of convergence in labour productivity in Europe and suggests
further policies aimed at reducing the technology gap.