October 9, 2023
NEW DELHI – Artificial Intelligence (AI) is the new game in town but it is still very much at home, as it were ~ the new jobs it is generating are all clustered in America’s traditional big tech hubs such as California’s Bay Area. For the many optimists who thought the generative AI boom would lead to jobs being created across the USA and, indeed, the globe, especially given the work-from-home trend catching on in the aftermath of the Covid-19 pandemic, the news is that US job postings over the past year definitively belie their hopes. Scholars Mark Muro and Julian Jacobs point out in a recent article that rather than democratising tech, generative AI could well further geographically concentrate AI activity.
Technology innovation tends to concentrate in key hubs, and AI is following the same, well-trodden path. A July 2023 report by the authors on building AI cities iterated that digital industries tend to concentrate in just a few key hubs for specific reasons. These include the innovation benefits of local clusters, the need for deep pools of specialised talent, and the benefits of ‘winner-take-most’ network effects playing out across huge platforms. Stanford University economist Nicholas Bloom, meanwhile, has shown that over the past two decades most disruptive technologies have remained highly concentrated in their core locations, conferring long-lasting advantages on these so-called pioneer locations. The prognosis does not seem very different for AI.
Brookings research from 2021 showed that the Bay Area and 13 “early adopter” metro areas in the USA accounted for over half of the country’s AI activity in federal contracting, conference papers, patents, job postings, job profiles, and start-ups. A fresh survey conducted by Muro and Jacobs now shows that across America, over 60 per cent of generative AI jobs posted in the year ending in July 2023 were clustered in just 10 metro areas and about 25 per cent of those postings were in the Bay Area. The others, unsurprisingly, were concentrated in a handful of the “superstar” cities. It’s important to keep in mind that America is, of course, the clear world leader in AI. To be sure, a degree of employment diffusion may occur over time as more middle wage work in an AI field begins to spread to new regions.
But the new job posting numbers make the AI story a lot like the social media story, the earlier internet boom, and the PC boom before that in regards to their geographic concentration. As the latest digital technology, AI appears to be developing along the same highly clustered path of previous digital services, driven by its need for deep pools of pre-existing expertise and talent. That is not great news for either the rest of America or the world.