The deployment of AI is among the important shifts. AI is already affecting the economics of the workplace, with the potential to dramatically increase productivity in some sectors,³ while displacing various roles.⁴ Lower- and middle-income countries, already bypassed by industrialisation, face an even steeper path if AI takes over both manufacturing and service jobs, especially if the economic value it creates becomes concentrated in the hands of a few technology companies and their investors.

Another threat is the possibility of a dangerous AI race without adequate societal controls, driven by capitalist and geopolitical competition. AI development is resource-hungry, exacerbating global inequality and geopolitical tension, and such a race may prioritise rapid development over safety and environmental concerns like energy and water consumption for data centres. How governments and transnational organisations protect public interests in this scenario is an important open question, which will also require the integration of ecological economics and transnational economics in determining how the knowledge economy evolves.

All this is forcing economists and policy-makers to rethink traditional assumptions and ask difficult questions about values, well-being, control of technology and wealth distribution. As AI transforms the digital and real economy, the greatest challenge will be to ensure that society acts to ensure this process benefits all and not just the powerful few.⁵