Artificial Intelligence and the Future of Sustainable Economic Growth: Implications for Productivity, Employment, Innovation, Inequality, and Inclusive Development

Abstract

Artificial intelligence (AI) is being touted as a catchall, ‘general-purpose technology' which can transform economic growth. AI, or ‘artificial intelligence ', is emerging as a ‘catch-all' or ‘general-purpose technology' with the capacity to drive economic growth. The effects on productivity, jobs, innovation, inequality, and sustainability have been debated. The objective of this review is to bring together the peer-reviewed and working paper literature relating to the subject during the period 2020– 2025. Experimental and firm-level studies indicate significant task-level productivity improvements, particularly for less experienced workers. In macroeconomics, estimates of aggregate gains do not exceed. As for employment, so far it is not mass displacement; rather, it is task reallocation, which, as is well known, occurs with automation and leads to wage polarisation. AI is creating innovations in science and biomedicine like protein structure prediction and drug discovery, but few companies and countries can develop AI. AI can help achieve climate and Sustainable Development Goals (SDGs), but it also has significant energy, carbon, and water impacts. We believe AI-powered growth is sustainable and inclusive only if complemented by appropriate investments in skills, governance, auditing, open infrastructure, and energy-efficient computing. We recommend a policy framework and research priorities.