This article has explored the dynamics and the sources of labour productivity growth
across Europe during the period 1993–2007. Its specific contribution is to address explicitly
the role of the technology gap. In the context of the EU this is timely and relevant for
three main reasons. First, as a result of the enlargement process the EU has substantially
increased its degree of heterogeneity in labour productivity and technological capabilities
across its Member States. In this context, the presence of substantial technology gaps
across countries represents a serious obstacle to productivity convergence. Second, over
the last few decades the EU cohesion policy has devoted substantial resources through the
structural funds aiming to reduce technology disparities between the EU Member States.
Third, the reduction of technology gap would increase the benefits for NMS from
technological advancements taking place in the common market.