The United States is poised to strengthen its economic dominance over other nations in the coming two decades, driven by rapid advancements in technology and science. However, this progress may come at the cost of widening inequality within its borders, according to Gad Levanon, the chief economist at The Burning Glass Institute.
In his recent forecast, Levanon highlighted that American-led developments in artificial intelligence (AI) are expected to significantly boost worker productivity and drive economic growth in the U.S. at a pace much faster than most other developed nations. He pointed out that these advancements will likely widen the gap between the U.S. and its global competitors in economic and technological leadership.
“Generative AI represents more than a gradual improvement in technology—it is a significant leap forward,” Levanon noted. He emphasized that the transformative potential of AI will extend beyond merely enhancing existing systems. It is expected to accelerate research and development across industries, paving the way for groundbreaking innovations in science and other domains.
The United States is uniquely positioned to reap the largest benefits from these advancements due to its unparalleled dominance in the tech sector and its entrepreneurial business environment. High-paying jobs in the U.S. are predicted to attract top talent from across the globe, further fueling innovation and economic growth.
China and India are also projected to emerge as major beneficiaries of the AI revolution, according to Levanon.
While the economic benefits of AI will be significant, they are unlikely to be evenly distributed across the U.S. population. Levanon cautioned that much of the resulting wealth will be concentrated among tech investors and business leaders, particularly those based on the West Coast. “The increase in wealth will be disproportionately concentrated,” he said.
Moreover, the rise of AI is expected to impact white-collar workers more severely than their blue-collar counterparts. Levanon explained that AI will likely eliminate a substantial number of jobs currently held by individuals with college degrees. On the other hand, workers in skilled trades such as electricians, plumbers, and sawmill operators are likely to fare better. Their roles are less susceptible to automation, and ongoing labor shortages in these fields could lead to increased wages.
“As a result, the college premium, particularly for graduates of lower-ranked institutions, is likely to decline,” Levanon predicted.
Regional disparities within the U.S. could also deepen as a result of AI-driven economic changes. The West Coast, already a hub for technological innovation, is expected to emerge as the biggest winner, Levanon noted. In contrast, regions like the Midwest, which have historically relied on manufacturing, may fall further behind in terms of economic prosperity.
Levanon stressed that one of the most significant challenges for policymakers in the next 20 years will be ensuring that economic growth translates into widespread improvements in living standards for all Americans. Without deliberate intervention, the benefits of AI could remain concentrated among a small segment of the population, exacerbating existing inequalities.
In conclusion, while the U.S. is set to maintain and expand its global economic leadership through technological advancements, the path ahead requires careful navigation to address the domestic challenges of inequality and uneven regional development. The government will play a critical role in ensuring that the promise of AI leads to broad-based prosperity rather than deepening divides.
