Digital transformation and artificial intelligence: Implications for inequality and global economic convergence

Technological change, led by digital technologies, is a defining feature of our time. The latest advances in artificial intelligence (AI) will drive the ongoing digital transformation of economies much further. These new technologies are reshaping markets, production, trade, and the nature of work. They hold great potential to boost productivity, economic growth, and human welfare. But they also pose new challenges and risks. There is uneven participation in the new opportunities created by digital transformation. Many are being left behind, across industries, across the workforce, and across economies. This has not only hindered the realization of the full economic potential of the new technologies but also contributed to higher inequality. Growing economic disparities and related anxieties have been stoking social discontent and are a major driver of the increased political polarization and populist nationalism that are so evident today. Rising inequality has emerged as an important topic of political debate and a major public policy concern.

On October 22, 2024, the Global Economy and Development program at Brookings, jointly with the Center for International Development at the Korea Development Institute, held a seminar titled “Digital Transformation and Artificial Intelligence: Implications for Inequality and Global Economic Convergence.” The seminar addressed the challenges of harnessing technology to build more inclusive prosperity. The program consisted of three main parts: (i) analysis of recent trends in, and outlook for, inequality within and between economies and the role of technological change and other factors; (ii) a drill-down on how technology is altering growth and distribution dynamics by reshaping labor markets (affecting workers) and product markets (affecting firms) and creating new challenges for global economic convergence; and (iii) a review of some regional/country case studies on the new dynamics and challenges created by technological change. The discussion addressed the implications of the research findings for public policy.

All presentations made at the seminar are available for download on this page.