Nobel Laureate Aghion: AI Will Spark Job Boom, But Smart Policies Are Crucial

Philippe Aghion, the 2025 Nobel laureate in Economic Sciences, recently doubled down on his optimistic outlook for Artificial Intelligence (AI) and the future of work, asserting that while some jobs will disappear, the technology's immense productivity boost will ultimately create many more new ones. Speaking at the Cercle d'Economia in Barcelona and the Amundi World Investment Forum, Aghion emphasized that AI is already showing a 'slightly positive effect' on aggregate employment, pushing back against widespread fears of mass unemployment. Aghion, a leading proponent of 'creative destruction' theory, argues that AI represents the latest wave of innovation that, like past technological revolutions such as electricity and the internet, will reshape economies by automating tasks while simultaneously opening up entirely new industries and roles. His views are echoed by economists like Joseph Briggs of Goldman Sachs Research, who predicts approximately 15 million US jobs will be displaced by AI, representing about 9% of the workforce, but notes that historically, technology-driven productivity gains have always led to net job growth. This ongoing transformation is not just about automation, but also about AI's ability to generate ideas and drive exponential productivity gains, which Aghion estimates could add at least one percentage point annually to global productivity for a decade. However, Aghion's optimism comes with a critical caveat: realizing AI's full potential hinges on smart policy choices and institutional adaptation, particularly in regions like the European Union. He stresses the urgent need for increased venture capital, robust competition policies, and targeted industrial policies to foster a vibrant AI ecosystem, warning that without these, Europe risks being 'doomed' and left behind by the US and China. The ongoing debate is less about whether jobs will change, and more about how governments and businesses will manage this massive Labor Market Transformation to ensure the benefits of AI are broadly shared.