“Based on a survey of French companies, where we compared firms that adopt AI with similar ones that haven’t, we observe a positive effect on unemployment caused by AI,” stated the French economist during a remote participation at a conference on AI and financial stability organized by the Bank of Portugal, held today at the Money Museum in Lisbon.
“Companies that adopt AI become more productive and thus more competitive, leading to increased product demand and, consequently, higher employment. Therefore, this productivity effect counteracts the labor substitution effect of AI,” he added.
Nonetheless, he highlighted that this perspective is not applicable across all sectors. He noted that the adoption of AI models for administrative or highly exposed and replaceable jobs has a “negative effect” on employment.
Philippe Aghion further emphasized the need to harness this employment effect of AI, which should be aligned with an “adequate education system,” praising former Minister of Education Nuno Crato (2011-2015).
“I know that in Portugal, with Nuno Crato, there was a fantastic reform of the education system that we should emulate in France,” he pointed out.
Similarly, he argued for appropriate labor policies, citing Denmark as an example.
“Just as a proper competition policy is necessary to leverage the growth potential of AI, an adequate education policy and labor market policy are also essential to benefit from AI’s growth and job creation potential,” he stressed.
Aghion added that Europe does not want to be “entirely dependent on the USA in terms of computing capacity,” making the development of Europe’s own computing capacity “very important.”
The French economist, recently honored by the Swedish academy, was the third speaker at the conference, following the opening remarks of the Governor of the Bank of Portugal, Álvaro Santos Pereira, and the head of AI research at JP Morgan Chase, Manuela Veloso.
In his opening, Álvaro Santos Pereira asserted that the banking system—from financial institutions to central banks—can enhance “its resilience by harnessing the power of AI,” as the volume of data processed can improve threat detection and incident response.
“We need to invest in these technologies so that central banks and supervisory authorities stay at the forefront, ensuring that AI benefits for the system, economies, and citizens outweigh the risks posed by the rapid dissemination of these innovative technologies,” advocated the governor.
According to the Bank of Portugal’s head, responsibility and human experience should be central to the governance of entities, and “AI systems should augment, not replace decision-making.”
In her address, focusing on the workings of AI models and AI agents, Manuela Veloso revisited Álvaro Santos Pereira’s statement, noting that “ultimately, AI will also make decisions.”
