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The impact of artificial intelligence on economic development

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  • Mohamed Ali Trabelsi

Abstract

Purpose - This paper reviews recent research on the expected economic effects of developing artificial intelligence (AI) through a survey of the latest publications, in particular papers and reports issued by academics, consulting companies and think tanks. Design/methodology/approach - Our paper represents a point of view on AI and its impact on the global economy. It represents a descriptive analysis of the AI phenomenon. Findings - AI represents a driver of productivity and economic growth. It can increase efficiency and significantly improve the decision-making process by analyzing large amounts of data, yet at the same time it creates equally serious risks of job market polarization, rising inequality, structural unemployment and the emergence of new undesirable industrial structures. Practical implications - This paper presents itself as a building block for further research by introducing the two main factors in the production function (Cobb-Douglas): labor and capital. Indeed, Zeira (1998) and Aghion, Jones and Jones (2017) suggested that AI can stimulate growth by replacing labor, which is a limited resource, with capital, an unlimited resource, both for the production of goods, services and ideas. Originality/value - Our study contributes to the previous literature and presents a descriptive analysis of the impact of AI on technological development, economic growth and employment.

Suggested Citation

  • Mohamed Ali Trabelsi, 2024. "The impact of artificial intelligence on economic development," Journal of Electronic Business & Digital Economics, Emerald Group Publishing Limited, vol. 3(2), pages 142-155, May.
    • Handle: RePEc:eme:jebdep:jebde-10-2023-0022
    DOI: 10.1108/JEBDE-10-2023-0022
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    References listed on IDEAS

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    1. Joseph Zeira, 1998. "Workers, Machines, and Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(4), pages 1091-1117.
    2. Egidijus BARCEVICIUS & Cristiano CODAGNONE & Luka KLIMAVICIUTE & Gianluca MISURACA, 2020. "Exploring digital government transformation in the EU: Expert Consultation and Stakeholder Engagement," JRC Research Reports JRC121494, Joint Research Centre.
    3. David Hémous & Morten Olsen, 2022. "The Rise of the Machines: Automation, Horizontal Innovation, and Income Inequality," American Economic Journal: Macroeconomics, American Economic Association, vol. 14(1), pages 179-223, January.
    4. Mohamed Ali Trabelsi, 2024. "The impact of corruption on economic growth: a nonlinear evidence," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 26(3), pages 953-962, December.
    5. Ajay Agrawal & Joshua S. Gans & Avi Goldfarb, 2019. "Artificial Intelligence: The Ambiguous Labor Market Impact of Automating Prediction," Journal of Economic Perspectives, American Economic Association, vol. 33(2), pages 31-50, Spring.
    6. Daron Acemoglu & Pascual Restrepo, 2016. "The Race Between Machine and Man: Implications of Technology for Growth, Factor Shares and Employment," NBER Working Papers 22252, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Carlo Drago & Alberto Costantiello & Marco Savorgnan & Angelo Leogrande, 2025. "Macroeconomic and Labor Market Drivers of AI Adoption in Europe: A Machine Learning and Panel Data Approach," Economies, MDPI, vol. 13(8), pages 1-62, August.
    2. Brij Behari Dave, 2024. "Technology and AI—Impact on Country’s Growth and Unemployment," Journal of Banking and Financial Dynamics, Eastern Centre of Science and Education, vol. 8, pages 6-16.
    3. Ilma Sharif & Syed Tehseen Jawaid & Moona Shamim & Hira Mujahid, 2026. "The Nexus Between Mineral Resources and Economic Growth: Exploring the Moderating Role of Fintech Instruments and Artificial Intelligence in Developed Economies," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 68(1), pages 1-32, March.
    4. Carlo Drago & Alberto Costantiello & Marco Savorgnan & Angelo Leogrande, 2025. "Driving AI Adoption in the EU: A Quantitative Analysis of Macroeconomic Influences," Working Papers hal-05102974, HAL.
    5. Assem Atalla & Noha Ghazy, 2026. "Digital Advancements as a Catalyst for Economic Development: An Empirical Examination of Asia Pacific from 1991–2019," Springer Proceedings in Business and Economics, in: Hebatallah Ghoneim & José Iparraguirre & Martin Walther & Rasha S. Hassan & Noha Amer & Noha Ghazy (ed.), Positive Performativity and Transformative Management Research, pages 241-264, Springer.
    6. Trabelsi, Mohamed Ali, 2025. "L’intelligence artificielle: les métiers de la comptabilité et la gouvernance publique [Artificial intelligence: accounting professions and public governance]," MPRA Paper 127412, University Library of Munich, Germany.
    7. Constantinos Challoumis & Nikolaos Eriotis & Dimitrios Vasiliou, 2025. "Mobile applications and internet banking for Greek enterprises," Edelweiss Applied Science and Technology, Learning Gate, vol. 9(9), pages 699-714.
    8. Zaitseva, Elena & Levashenko, Vitaly, 2026. "Reliability engineering in healthcare: Opportunities and challenges," Reliability Engineering and System Safety, Elsevier, vol. 267(PB).
    9. Kateryna Kolos & Oleg Kubrak & Yuliya Olimpiyeva & Pavlo Ihnatenko & Olena Furtat, 2025. "Automation of Production Management Processes Using Artificial Intelligence: Impact on the Efficiency and Resilience of Manufacturing Systems," LatIA, AG Editor, vol. 3, pages 311-311.
    10. Xia Zhao & Jingjing Yang, 2025. "How Artificial Intelligence Empowers Rural Industrial Revitalization: A Case Study of Hebei Province," Sustainability, MDPI, vol. 17(16), pages 1-27, August.
    11. Satyadhar Joshi, 2025. "Artificial Intelligence And The Future Of Us Competitiveness: Sectoral Impacts, Workforce Transitions, And Policy Challenges," Post-Print hal-05212339, HAL.
    12. Bahaa Awwad & Mohammad A. A. Zaid & Adel Sarea, 2026. "Does generative artificial intelligence reinforce financial performance? The mediating role of governance quality," Future Business Journal, Springer, vol. 12(1), pages 1-11, December.
    13. Adela Socol & Oana-Raluca Ivan & Adina Elena Danuletiu & Ionela Cornelia Cioca & Claudia Florina Botar & Dorina Elena Virdea, 2025. "The Moderating Role of Governmental Artificial Intelligence in Shaping Green Growth Dynamics in the European Union," Sustainability, MDPI, vol. 17(22), pages 1-34, November.
    14. Jung, Juan & Katz, Raúl L., 2026. "Impacto económico de la inteligencia artificial en América Latina: transformación tecnológica y rezago en materia de inversión y capacidades laborales," Documentos de Proyectos 81909, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    15. Lin, Boqiang & Zhou, Dengli, 2025. "A new green transition driver: How does artificial intelligence affect the green economic efficiency," Energy, Elsevier, vol. 334(C).

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    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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