Shayne MacLachlan
Communications and Public Relations Manager, OECD
Generative artificial intelligence (AI) is not just reshaping industries — it’s revolutionising the very fabric of local economies.
As this technology advances rapidly, it brings with it both promises and challenges for workers, particularly in smaller towns and rural areas. The local job impacts of generative AI are powerful; that’s why place-based policies are critical to be sure that no one is left behind.
Growing impact of generative AI on local jobs
Historically, technological advances have disrupted jobs, particularly ones requiring manual labour. The rise of factory automation displaced workers in rural areas, where manufacturing was a dominant industry.
Generative AI represents a transformation that is not limited to physical labour but extends to knowledge-based, creative and cognitive tasks. Generative AI stands to affect high-skilled workers and women more than low-skilled roles, traditionally held by men. Crucially, its impacts will not be felt equally across regions.
According to a recent OECD report, ‘Job Creation and Local Economic Development’, 32% of urban workers are in jobs that will be affected by generative AI, compared to just 21% of rural workers. The lack of high-speed broadband in rural areas, where over 30% of households don’t have access to fast internet, could make it harder for small towns to tap into the benefits of AI.
Job evolution and productivity boost
Generative AI’s influence on local jobs is not necessarily about job loss but about job evolution. OECD evidence shows that generative AI could boost annual labour productivity growth by 0.4–0.9 percentage points. Additionally, a 2023 OECD AI survey found that 75% of surveyed finance workers using AI had accelerated their work.
In industries like healthcare, education and finance — sectors where AI can aid in decision-making or content creation — the technology can boost efficiency rather than replace local jobs entirely. Generative AI can enhance the work of local professionals, improving productivity across various sectors, from small businesses to rural healthcare facilities.
Generative AI can enhance the work
of local professionals, improving
productivity across various sectors.
Local communities can supercharge their future using generative AI
Local governments, businesses and educational institutions must collaborate to create tailored solutions that address the specific needs of their communities. One approach is to invest in AI training programmes that equip workers with the skills needed to thrive in a rapidly changing job market.
Local businesses, especially SMEs, must also be supported in adopting AI technologies that can boost competitiveness and create new opportunities. Rural regions must invest in digital infrastructure to bridge the connectivity gap to ensure they aren’t left behind. Without robust broadband access, rural communities may find themselves excluded from the benefits of AI, reinforcing existing economic disparities.
The future of work is inclusive and local
By embracing generative AI in ways that prioritise local needs and ensure digital equity, we can ensure that this new wave of technology doesn’t just create winners in urban hubs but benefits workers and regions globally.
