1---AI adoption will be net beneficial for the economy – it will drive sustainable growth and job creation, not the other way around.

AI is generally acknowledged to be an engine of productivity and growth. With its ability to process and analyse enormous volumes of data, it has the potential to boost the efficiency of business operations. The McKinsey Global Institute predicts that around 70% of companies will adopt at least one type of AI technology by 2030, and less than half of large companies may use the full range of AI technologies. Price Waterhouse Coopers predicts that AI could increase global GDP by 14% in 2030 (PwC 2017). Research into the impact of AI on the labour market has expanded recently. Acemoglu and Restrepo (2018) provide a theoretical framework to understand the impact of new technologies on the labour market. They decompose the effect of new technologies on labour into three broad effects: a displacement effect, a productivity effect and a reinstatement effect (new technologies can serve as a platform to create new tasks in many service industries, where labour has a comparative advantage relative to machines, boosting labour demand). Frank et al. (2019) classify current literature on the labour market implications of AI into two broad categories: a doomsayer’s perspective and an optimist’s perspective. Doomsayers believe that labour substitution by AI will harm employment. Frey and Osborne (2013) estimate that 47% of total US employment is at risk of losing jobs to automation over the next decade. Their research reveals that a substantial share of employment in service occupations – where most US job growth has occurred over the past decades – are highly susceptible to computerisation. Bowles (2014) uses Frey and Osborne’s (2013) framework to estimate that 54% of EU jobs are at risk of computerisation. Acemoglu and Restrepo (2017) provide a historical example of excessive automation negatively affecting the labour market due to weak productivity and reinstatement effects, finding that areas in the US most exposed to industrial automation in the 1990s and 2000s experienced large and robust negative effects on employment and wages. AI is also expected to have a disruptive effect on the composition of the labour market. Autor (2015) presented evidence that the labour market has become polarised over the last few decades towards low-skilled and high-skilled jobs and away from medium-skilled jobs, due to the advent of computers. However, he stated that this polarisation is likely to be reversed, as some low-and-medium skilled jobs are likely to be relatively resistant to automation, while some highly-skilled but relatively routine jobs may be automatable (potentially with technologies like AI). However, Petropoulos and Brekelmans (2020) concluded that unlike the computer and robotic revolution, the AI revolution is unlikely to cause job polarisation as it will affect alter low-skilled, middle-skilled and high-skilled jobs. Optimists believe that AI’s productivity and reinstatement effects will be more than enough to compensate for the substitution effect. Some opinion pieces project that AI and robotics will have created up to 90 million jobs by 2025, indicating a strong positive labour market impact. The World Economic Forum concluded in October 2020 that while AI would likely take away 85 million jobs globally by 2025, it would also generate 97 million new jobs in fields ranging from big data and machine learning to information security and digital marketing. Lawrence et al. (2017) argue that AI automation is unlikely to negatively impact the employment market due to its large positive spillover effects (reinstatement effect), which would counteract the negative direct effects of substitution in the labour market and can be seen as a Schumpeterian ‘creative destruction’. They believe that automation is likely to transform, rather than eliminate, work. In contrast to other studies finding larger negative effects, Arntz et al. (2016) estimate that only 9% of jobs in the UK are susceptible to automation in the next decade. They argue that instead of substitution, transformation is more likely to occur, with 35% of jobs would change radically in the next two decades.