Francesco Venturini of Università degli Studi di Perugia presented UNTANGLED research at the 5th Joint Conference of Polish and Hungarian Central Banks in Warsaw on 15 September. He showed that the development of artificial intelligence (AI) can act as a driver of productivity, but it also reduces demand for lower and medium-skilled workers.
In his presentation, “Development of AI: Productivity and Distributive Effects in Europe,” Francesco Venturini shared the results of his work with Fabrizio Pompei, demonstrating that the productivity of firms developing AI is 13.7% higher than of those who are not innovating in this field. The generation of AI technologies also helps laggard firms catch up with the productivity leaders.
AI development also has a significant impact on the share of labour in regional income (gross value added, GVA). Researchers found that AI reduces labour share and widens regional income disparities. While the share of regional income for highly skilled labour remains unaffected, that of medium-skilled workers decreases by 3%, and that of low-skilled workers decreases by 9 % with the doubling of AI-related innovation. Therefore, AI seems to contribute to an uneven distribution of wage income.
You can access Francesco Venturini’s presentation here.
For a deeper dive into UNTANGLED research on AI, read Fabrizio Pompei and Francesco Venturini’s paper by clicking here.