Automation Inequality: Will AI Widen the Gap Between Rich and Poor? The Transformation of the World Labour Market by Artificial Intelligence and the Challenges for the Development of Developing Economies

Abstract

The swift progress in the development of automation and artificial intelligence (AI) is changing global manufacturing processes, workforce conditions, and economic growth dynamics. Although the benefits of automation include substantial improvements in productivity levels, such innovations create major challenges related to inequality and workforce displacement, especially for emerging countries. This paper addresses the notion of automation inequality, exploring how advanced technologies can increase disparities between the wealth of capital and the earnings of workers in both international and domestic contexts.

In addition, this paper offers an analysis of the implications of displacement and productivity in connection with automation, stressing the trend toward wealth accumulation by the owners of innovations. The policy options proposed involve boosting total factor productivity, improving the education sector, providing better labor market conditions, and implementing effective tax policies.

On the whole, this research reveals that the role that AI technologies play in the future economy will be determined not only by their capacity but also by the adoption of appropriate policy options and investments in human resources. Developing countries should adopt innovative strategies for managing automation to ensure economic benefits.