Generative AI to Reshape Regional Job Markets Across OECD, Exacerbating Urban-Rural Gaps.

Paris: Generative Artificial Intelligence (AI) is set to impact regional local job markets across OECD countries differently, potentially exacerbating existing urban-rural income and productivity gaps as well as the digital divides between regions, as revealed in a new report by the OECD. According to Emirates News Agency, the "Job Creation and Local Economic Development 2024" report indicates that, following a decade of employment growth, over half of OECD regions had reached employment rates above 70% by 2023. This growth included more women joining the workforce, which has narrowed the gender gap in labor force participation in 84% of OECD regions. However, this employment boom has also led to labor shortages and gaps, especially in densely populated urban regions such as Lombardy in Italy and Hamburg in Germany, as well as in regions experiencing population decline and aging. Amid these challenges, Generative AI presents potential solutions to address labor shortages and enhance productivity. Nonetheles s, the report underscores significant regional disparities in how jobs are affected by Generative AI. The proportion of workers in jobs exposed to AI varies, with urban regions like Stockholm in Sweden and Prague in Czechia seeing 45% exposure, while rural regions like Cauca in Colombia experience only 13% exposure. Urban workers are more likely to be impacted, with an average of 32% already exposed to Generative AI, compared to just 21% of rural workers. This trend could further widen existing urban-rural income and productivity gaps, as well as digital divides between regions. Regions previously at a lower risk of automation now face higher exposure to Generative AI, with metropolitan areas, high-skilled workers, and women being increasingly affected as Generative AI excels in performing cognitive and non-routine tasks. OECD Secretary-General Mathias Cormann emphasized the dual nature of Generative AI's impact on local job markets, stating, "The rapid adoption of Generative AI is reshaping local job marke ts, offering solutions to labor shortages and boosting productivity. But it also risks widening the digital divide between urban and rural areas. To harness its potential for all, policymakers must prioritize digital infrastructure, boost digital literacy, and support SMEs to ensure AI's benefits reach everyone and help tackle local skills bottlenecks."