The IT sector accounted for nearly half of EU productivity growth between 2000 and 2004 and is still outstripping the rest of the economy, EU figures have revealed.
The figures come in the EU's annual i2010 report on its strategy to boost the digital economy. The report assesses the economic impact of IT deployments in the EU's member states.
This year's report shows software and IT services are the most dynamic growth area, with a 5.9 percent growth rate for 2006-07.
Viviane Reding, EU commissioner for information society and media said: "Our integrated European policy for growth and jobs is now starting to pay dividends.
But she added: "However, let's not be complacent. ICT companies in Europe are still not able to profit from economies of scale in view of regulatory fragmentation that blocks the emergence of pan-European services and hurts the chances of e-communication operators and software companies to compete on the world market."
She called on member states to make a greater effort to remove "the remaining impediments within the internal market for online services".
The report also revealed a record number of new broadband connections across Europe, with 20.1 million new lines connected in the year to October 2006. Six EU countries - the UK, Denmark, the Netherlands, Finland, Sweden and Belgium - all now have higher broadband penetration rates than the US and Japan.