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Innovation and employment in the era of artificial intelligence

Marco Vivarelli () and Guillermo Arenas Díaz
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Guillermo Arenas Díaz: Università Cattolica del Sacro Cuore

Authors registered in the RePEc Author Service: Guillermo Arenas Díaz ()

IZA World of Labor, 2025, No 154.v2, 154.v2

Abstract: The relationship between technology and employment has always been a source of concern, at least since the first industrial revolution. However, while process innovation can be job-destroying (provided that its direct labor-saving effect is not compensated through market mechanisms), product innovation can imply the emergence of new firms, new sectors, and thus new jobs (provided that its welfare effect dominates the crowding out of old products). Nowadays, the topic is even more relevant because the world economy is undergoing a new technological revolution centred on automation and the diffusion of Artificial Intelligence (AI).

Keywords: innovation; technological change; R&D; artificial intelligence; employment; technological unemployment (search for similar items in EconPapers)
JEL-codes: J21 O33 (search for similar items in EconPapers)
Date: 2025
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