AI’s Disruption of Workforces May Give Rise to an Innovation Economy

Artificial intelligence is transforming industries and workforces across the globe, but it could also lay the foundation for an entirely new economic system.

Although the concept of AI has existed since the mid-1900s, the technology surged into mainstream discussions following the introduction of OpenAI’s generative AI chatbot, ChatGPT, in November 2022.

“But [generative AI] isn’t just another invention,” said Aneesh Raman, chief economic opportunity officer at LinkedIn. “It’s a turning point, forcing us to rethink not just what work is, but what it means to be human at work.”

The Decline of the Knowledge Economy

Raman compared AI’s impact to that of the Industrial Revolution, stating that it is ushering in a new era.

“For centuries, work was about our physical abilities on farms, and then again in the factories,” he explained. “It’s only been the past couple decades that work has been about our intellectual abilities.”

Now, a fresh economic shift is taking place—what Raman calls the “innovation economy.”

With automation handling more physical tasks and AI taking over many intellectual functions, human workers will increasingly be defined by their social capabilities, Raman said.

“The knowledge economy is on the way out, and a new economy is on the way for us humans at work,” he stated. “I’m calling it the innovation economy.”

In this emerging economic landscape, “human innovation and our uniquely human skills, like social and emotional intelligence” will be essential, he added.

According to Raman, the critical skills in this new economy include creativity, curiosity, courage, compassion, and communication—qualities he refers to as “the 5 C’s.” These abilities are fundamental to fostering innovation, enabling people to generate fresh ideas, challenge conventional norms, collaborate effectively, and build together.

AI as a Tool for Innovation

Beyond reshaping the nature of work, AI is poised to democratize innovation on an unprecedented scale, said Raman.

“The systems of work have traditionally privileged pedigree over potential—very few humans across history have had the right credentials and the right connections to get access to the capital they needed to turn ideas into inventions,” he noted.

A study conducted by economist Raj Chetty and other researchers introduced the term “lost Einsteins” to describe promising innovators whose socioeconomic backgrounds limit their opportunities.

The study analyzed tax and school district records of over one million U.S. patent holders and discovered that children with parents in the top 1% of the income distribution were ten times more likely to become inventors than those whose parents had incomes below the median.

“Where [AI] is set to have the biggest impact is in helping people sitting on great ideas and great inventions finally bring those ideas to life,” Raman said.

AI not only has the potential to automate routine tasks but can also serve as “your sounding board, your co-founder, your coder” and more, he added.

He illustrated the potential of AI with examples: “Think about what happens when an entrepreneur in Brazil can prototype a climate technology solution without needing a full engineering team. Or when a teacher in rural India can build and deploy an educational platform without needing to write code.”

AI’s Impact on the Job Market

Beyond fostering innovation, AI is also reshaping the employment landscape.

“Jobs are changing so fast that pedigree signals we’ve long relied on, like where you went to school or what big-name company you’ve worked for in the past, are no longer useful predictors of future success,” Raman said.

Instead, skills have taken on greater importance in the evolving job market.

Traditionally, technical knowledge and expertise have been labeled as “hard skills,” while social and emotional intelligence has been categorized as “soft skills.” However, as AI increasingly replicates many intellectual tasks, human abilities such as emotional intelligence are becoming the new “hard skills,” Raman asserted.

Thus, those who embrace adaptability will thrive in this new job market. “The winners of this new era of work will be those who lean in and learn to adapt—or put a different way, ‘disrupt yourself or be disrupted,’” he stated.

LinkedIn data collected from 1,991 executives across nine countries indicates that nearly 90% of C-suite executives consider AI adoption a top priority for 2025. In the Asia-Pacific region, this figure rises to 94%.

Given AI’s growing influence, it is crucial for workers to familiarize themselves with AI tools while honing the uniquely human skills that artificial intelligence cannot replace, Raman emphasized.