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While there is much discussion of how artificial intelligence will continue to transform industries and organizations, a key driver of AI’s role in the global economy will be cities. How cities deal with coming changes will determine which ones will thrive in the future. 

Many cities have plans to become “smart cities” armed with AI-driven processes and services, like AI-based traffic control systems, to improve residents’ lives. But simply adopting these new technologies won’t be enough to guarantee their success. Jobs that exist today may not exist tomorrow. Completely new jobs will need to be filled quickly. Many people today don’t yet have the skills needed for the jobs of the future. Yet cities cannot just shrink and grow their populations and talent at will.

To realize the potential of AI, city administrations have to work with local employers to plan for new opportunities — along with possible painful transitions — that their communities may experience. Many U.S. cities once dependent on manufacturing industries have made the shift to knowledge-based economies, including cities like Pittsburgh, Pennsylvania; Rochester, New York; and Madison, Wisconsin. In order for these economies to continue to prosper, cities — along with organizations and education experts — need to assess and prepare for AI-related skills gaps.

Urban Shifts

As with other technological revolutions, the move toward widespread use of AI will likely trigger urban shifts in cities. To better understand the scope of these, we conducted three studies. First, we examined how many people in American cities work in jobs with a greater than 70% probability of being automated. Applying a framework developed by Oxford University researchers Carl Benedikt Frey and Michael Osborneto 24 major U.S. cities, we found that between 33% and 44% of people work in jobs considered at high risk, including retail salespeople, cashiers, office workers, and other service-related jobs. 

That means millions of people will likely need assistance in transitioning to new jobs and roles as soon as within the next five years. In cities like New York and Los Angeles, with millions employed, many workers will need to find new professions (such as those in highly vulnerable roles such as tax preparers, loan officers, bank tellers, receptionists, and administrative assistants) as the nature of work is completely transformed. Even in global tech hubs like San Francisco and San Jose, California, about 400,000 people currently work in similar vulnerable roles. 

We surveyed more than 9,000 people in 21 major global cities to discover to what extent they expect, and may already be experiencing, displacement as a result of new technologies. These findings reaffirmed that transitions to AI-related jobs could prove problematic within the workforce. While most people (69%) expect their respective cities and residents will benefit in some way within the next 20 years from new technologies like AI, nearly half (45%) also expect their own jobs will be automated within the next decade. One-third of respondents in North America and Europe felt unsure about their city government’s vision for how to cope with technological change.

To dive deeper into this issue and quantify the extent to which more than 100 global cities are prepared to meet AI-related challenges, we conducted a series of expert interviews. This included speaking with 50 experts across academia, city governments, and business to determine what “prepared” really looks like in terms of cities’ readiness for broad social and economic changes. 

The data we collected showed that, in order to capture new prospects created by AI while minimizing risks, cities need to take advantage of four essential qualities: a vision for responding to technological change; a city administration able to activate new plans; a strong foundation of top talent, top employers, and top educational institutions; and the momentum to seize new opportunities. 

No city excelled across all four dimensions — most cities currently lead in only one or two factors. Singapore and Dubai have detailed visions for how to be leaders in the coming era of technological change. Singapore’s Digital Economy Framework for Action boldly states that it should seek out new digital opportunities for its businesses and people. Government agencies in Dubai publicly say they are examining ways to adopt new technologies and to recruit leading AI research labs and innovators, in part to support the United Arab Emirates’ broader AI strategy to eventually lift the UAE’s gross domestic product by 35%.

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