Technology
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Bernstein says AI may hit rich economies harder
NDTV Profit··11 Jun
Bernstein argued that AI may narrow global income gaps by affecting high-income economies more than middle-income countries. The firm said knowledge and information sectors make up a larger share of employment and GDP in advanced economies than in countries such as India, Indonesia or Mexico.
Prism
What It Means For You
- AI risk is not distributed evenly; high-wage service economies may face stronger replacement incentives.
- India's lower wage base may reduce immediate substitution pressure, but workers still need to upgrade skills as AI changes job design.
- If Bernstein is right, AI could narrow some country-level income gaps while still disrupting white-collar workers within every economy.
What's Happening
- Bernstein challenged the view that middle-income countries will be hit hardest by AI.
- The firm said advanced economies have higher exposure to knowledge-sector employment and wages.
- It estimated a larger national income hit for high-income economies than for middle-income ones.
Automation Incentives
- Companies adopt automation faster when labour replacement produces large savings relative to technology cost.
- High-income countries concentrate more GDP in services and knowledge work, which are more AI-exposed.
- The long-term outcome depends on whether economies create new tasks and industries fast enough to absorb displaced workers.
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