The Role of Artificial Intelligence Within the Algerian Economy: Opportunity or Threat to the Job Market?

Artificial intelligence (AI) is transforming global labor markets, offering opportunities to boost productivity and create industries while raising concerns about job displacement and inequality. For Algeria, an oil-dependent economy, AI presents opportunities to diversify and improve efficiency as well as risks such as unemployment, skill gaps, and delayed adoption due to technological gaps and institutional constraints. This study adopts a novel approach that estimates automation risk by mixing the probabilities of the capabilities required for various occupations using occupational databases and crosswalks. These probabilities were adjusted with a correction factor accounting for the slower technology adoption in emerging markets, inspired by historical patterns. The findings reveal a significant lag in AI adoption, with Algeria’s automation trailing that of advanced economies by approximately 2.5 times the required time. Some qualitative insights from interviews with managers and employees are consistent with our results, and the study concludes that Algeria faces minimal immediate AI risks. Integration and its consequences are likely to be delayed due to industrial dependency and competitive pricing from developed countries. These findings provide a foundation for future MENA-wide studies on the impact of AI on labor markets.