Directions for Major Transitions: Lessons from the Cartagena Research Project

Technological progress is the most important source of economic growth, but its effects on productivity and well-being depend on how new technologies are adopted and how labor and capital are reallocated to new activities. This report brings together findings from the Cartagena project, conducted by ETLA and funded by Business Finland, on the digital and clean transitions and the economic policies supporting them. The results indicate that AI exposure in Finland has so far not been systematically associated with weaker employment or wage outcomes among young workers, nor does AI use appear to have reduced employee well-being. Information based on personal consumption data can influence consumer choices, although the effects are moderate on average. The productivity effects of the green transition depend critically on whether resources move toward high- or low-productivity clean activities. The effectiveness of business subsidies likewise depends on their ability to generate new investment, technology adoption, and structural change.