OECD Job Creation and Local Economic Development 2024 - The Geography of Generative AI

The OECD report on Job Creation and Local Economic Development 2024 explores the transformative impact of generative AI on regional labour markets. It shows how AI-driven technologies can bridge productivity gaps and reduce labour shortages, especially in regions with ageing populations or significant demographic shifts. The report emphasises the potential of AI to enhance job performance by complementing tasks, with significant exposure observed in urban areas and high-skilled sectors.

Market differences between regions remain significant in OECD countries, with disparities in productivity, skills mismatches, and employment rates. The report identifies critical challenges such as labour shortages, exacerbated by demographic pressures, and highlights the importance of investment in upskilling and education systems to meet the demands of green and digital transitions.

Recommendations include targeted policies to enable regions to make use of the potential of generative AI and other emerging technologies. This includes supporting public-private sector partnerships, investing in infrastructure, and addressing specific local challenges such as skills gaps and job quality. By using AI as a strategic tool, regions can boost productivity, create inclusive labour markets, and build resilience against future economic shifts.