Analysis:AIBoomRaisesFearsofUnevenEconomicGains

Generative artificial intelligence (AI) is rapidly reshaping the global economy, but economists warn the technology could widen inequality and disrupt labor markets before broad productivity gains emerge.

The growing tension between AI’s uneven productivity gains and its immediate impact on jobs is increasingly forcing policymakers to rethink how monetary policy, labor markets and social safety nets should function in an AI-driven economy.

Governments and companies have poured billions into AI on expectations it could boost long-term growth. Yet economists say evidence of economy-wide productivity improvements remains limited because adoption is still uneven.

Instead, the gains are increasingly concentrated in a small number of companies and major cities with strong tech sectors and highly skilled workers.

A PwC survey released in April found that among more than 1,200 companies using AI, nearly three-quarters of the economic value generated was concentrated in just one-fifth of firms, underscoring concerns that AI may deepen disparities across companies and industries.

An April 28 report by Oxford Economics said AI is likely to strengthen major business hubs such as New York, San Francisco, London and Beijing, while industrial hubs and rural areas risk falling behind because of weaker talent pools and lower AI exposure.

Uneven AI adoption could also widen the gap between advanced and emerging economies. A Bank for International Settlements working paper estimated that AI-driven productivity gains could help advanced economies outpace emerging markets economically, slowing income convergence over time.

Economists remain divided over whether AI will ultimately fuel inflation or deflation. While some argue the technology could lower costs over time, others warn AI-driven labor disruptions could push wages higher in some sectors.

The International Monetary Fund estimates that nearly 40% of global jobs could be affected by AI, rising to roughly 60% in advanced economies.

Some economists say a central challenge is whether AI-driven gains can be distributed broadly enough to sustain consumer demand. Chinese economist Huang Yiping said that if AI-driven productivity growth outpaces demand growth, economies could face long-term deflationary pressure.

Contact editor Lin Jinbing (jinbinglin@caixin.com)