The Role of Artificial Intelligence (AI) in Productivity & Economic Growth in Nordic Welfare States

Authors

Keywords:

Artificial intelligence, Economic growth, Nordic States, Social safety, Income equality

Abstract

The Nordic welfare states have long been admired for their robust social welfare systems and high standards of living. However, as these economies face challenges posed by demographic shifts and global economic competition, the role of artificial intelligence (AI) in driving productivity and economic growth becomes increasingly pertinent. This research explores the multifaceted relationship between AI, productivity, and economic growth in the context of Nordic welfare states. Drawing upon existing literature and empirical evidence, this study explores how AI can enhance worker capabilities by automating routine tasks, increase productivity across various sectors including manufacturing by optimizing resource allocation, public administration and driving innovation. Additionally, it investigates the mechanisms through which AI adoption influences economic growth, considering factors such as innovation, efficiency gains, and the creation of new industries and employment opportunities. Moreover, the study delves into the unique characteristics of Nordic welfare states, such as strong social safety nets and emphasis on human capital development, and assesses how these factors interact with AI-driven productivity and economic growth. Furthermore, the study examines policy implications, including the need for adaptive regulatory frameworks, investment in AI infrastructure and research, and strategies for up-skilling the workforce to ensure inclusive growth and social cohesion. By offering insights into the role of AI in shaping productivity and economic growth within Nordic welfare states, this research contributes to a deeper understanding of the opportunities and challenges presented by AI adoption in the context of advanced social welfare models. The study emphasizes the significance of social safety nets in Nordic welfare states and the need for re-skilling and up-skilling to prevent job displacement. It also explores the potential of AI adoption in these states, aiming to inform policymakers and stakeholders on strategies to maximize the benefits of AI while maintaining social cohesion.

Author Biography

Junaid Butt, Advocate High Court, Member AJK BAR COUNCIL,  2nd Floor Old Courts Plaza, Muzafarabad, Azad Kashmir, PAKISTAN

Mag. Junaid Sattar Butt, LL.M, is a highly accomplished legal professional with a diverse educational background and a wealth of practical experience. Holding a Master of Laws (LL.M) and a Bachelor of Laws (LL.B). Butt brings a unique blend of legal expertise and financial acumen to his professional endeavors. In addition to his legal qualifications. Further holds a Master's degree in Political Science (MA), MBA in Finance and a Bachelor's degree in Commerce (B.Com), showcasing his commitment to a comprehensive understanding of both legal and socio-political landscapes. With over four years of practical experience as an Advocate in both District and High Courts, Mag. Butt has demonstrated exceptional skills in legal practice, including litigation, advocacy and drafting. His proficiency extends to acadamia, where he has served as a Lecturer imparting legal knowledge and expertise. Butt has also contributed significantly in his role as a Legal Research Officer at Malik Law Associates. His research publications stand as a testament to his dedication to advancing legal understanding and knowledge. Throughout his career, Mag. Junaid Sattar Butt has proven himself to be a committed and knowledgeable professional, seamlessly combining his educational background with practical experience in the legal field. His multifaceted expertise positions him as a valuable asset in legal practice, academia, and research.

References

Abban, O. J.; Xing, Y. H.; Nuţă, A. C.; Nuţă, F. M.; Borah, P. S.; Ofori, C. & Jing, Y. J. (2023). Policies for carbon zero targets: Examining the spillover effects of renewable energy and patent applications on environmental quality in Europe. Energy Economics.

Albanesi, S.; Da Silva, A. D.; Jimeno, J. F.; Lamo, A. & Wabitsch, A. (2023). New technologies and jobs in Europe. National Bureau of Economic Research. Retrieved March 11, 2024, from https://www.nber.org/system/files/working_papers/w31357/w31357.pdf.

Andersson, J.; Nyholm, T.; Ceberg, C.; Alm´en, A.; Bernhardt, P.; Franssong, A. & Olssond, L. E. (2021). Artificial intelligence and the medical physics profession - A Swedish perspective. Physica Medica, pp. 218–225.

Anke, H. & Bruno, P. (2023). Same Trend, Different Paths: Growth and Welfare Regimes across Time and Space. Annual Review of Political Science, pp. 347-368.

Awoke, M.; Tesfalem, A. & Takele, S. (2024). The Influence of Artificial Intelligence Technology on the Management of Livestock Farms. International Journal of Distributed Sensor Networks, 12.

Bjørndalen, A. J.; Dahlström, P.; Lundberg, T. & Torres, A. (23 January, 2024). What’s driving the Nordic countries’ software export surge? Retrieved from McKinsey & Company: https://www.mckinsey.com/industries/technology-media-and-telecommunications/our-insights/whats-driving-the-nordic-countries-software-export-surge.

Butt, J. (2023). Legal Considerations and Comparative Study about Countries Already Incorporated AI for Administrative Decisions. Acta Universitatis Danubius. Juridica, pp. 7-25.

Cazzaniga, M.; Jaumotte, F., Li, L.; Melina, G.; Panton, A. J.; Pizzinelli, C. & Mendes Tavares, M. (2024). Gen-AI: Artificial Intelligence and the Future of Work. Staff Discussion Notes. International Monetary Fund, pp. 1-39.

Colonna, L. (2020). Law in the Era of Artificial Intelligence. Nordic Yearbook of Law and Informatics, pp. 13-18.

Fossa, F. (2023). The high road. Driving automation, human values, and artificial agency. Ethics of Driving Automation: Artificial Agency and Human Values.

Garritzmann, J.; Häusermann, S. & Palier, B. (2022). The World Politics of Social Investment. Welfare States in the Knowledge Economy.

GmbH, S. (2024). Nordic Model. Retrieved March 11, 2024, from StudySmarter GmbH: https://www.studysmarter.co.uk/explanations/macroeconomics/macroeconomics-examples/nordic-model/.

Gmyrek, P.; Berg, J. & Bescond, D. (2023). Generative AI and jobs: A global analysis of potential effects on job quantity and quality. ILO Working Paper. Retrieved from https://www.econstor.eu/bitstream/10419/278614/1/1857683005.pdf.

Hatzius, J. (2023). The Potentially Large Effects of Artificial Intelligence on Economic Growth (Briggs/Kodnani). Global Economics Analyst, 1-20. Retrieved from https://static.poder360.com.br/2023/03/Global-Economics-Analyst_-The-Potentially-Large-Effects-of-Artificial-Intelligence-on-Economic-Growth-Briggs_Kodnani.pdf.

Ilzetzki, E. & Jain, S. (2023). The impact of artificial intelligence on growth and employment. Retrieved from VoxEU. org: https://scholar.google.com/scholar_lookup?title=The+Impact+of+Artificial+Intelligence+on+Growth+and+Employment&author=E.+S.+Ilzetzki+Jain&publication_year=2023.

Kettunen, P. (2001). The Nordic Welfare State in Finland. Scandinavian Journal of History.

Khan, H.; Dong, Y.; Nuţă, F. M. & Khan, I. (2023). Eco-innovations, green growth, and environmental taxes in EU countries: a panel quantile regression approach. Environmental Science and Pollution Research, pp. 108005–108022.

Ključnikov, A.; Popkova, E. G. & Sergi, B. S. (2023). Global labor markets and workplaces in the age of intelligent machines. Journal of Innovation & Knowledge.

Lehtonen, K. (2023). Unlocking the full potential of digitalization and the data economy – including in the EU. Fair data economy.

Lisa, R. & Heidrun, Å. (2024). Constructing the data economy: tracing expectations of value creation in policy documents. Critical Policy Studies.

Mannonen, M. (2023). Why is Technology Industries of Finland making a big investment in artificial intelligence? Retrieved from https://teknologiateollisuus.fi/en/ajankohtaista/news/why-technology-industries-finland-making-big-investment-artificial-intelligence

Matthews, L. (2023). Taking a Closer Look at the Vaunted Scandinavian Welfare States. Mises Wire.

Mustosmäki, A.; Reisel, L.; Sihto, T. & Teigen, M. (2022). Gendered Labor Market (dis)advantages in Nordic Welfare States. Nordic Journal of Working Life Studies, pp. 1-9.

Nureen, N.; Sun, H.; Irfan, M.; Nuta, A. C. & Malik, M. (2023). Digital transformation: fresh insights to implement green supply chain management, eco-technological innovation, and collaborative capability in manufacturing sector of an emerging economy. Environmental Science and Pollution Research, pp. 78168–78181.

Peng, C.; Zhen, X. & Huang, Y. (2023). Human-automation interaction centered approach based on FRAM for systemic safety analysis of dynamic positioning operations for offshore tandem offloading. Ocean Engineering.

Piton, C. (2023). The economic consequences of artificial intelligence: An overview. National Bank of Belgium Economic Review.

Reutter, L. & Åm, H. (2024). Constructing the data economy: tracing expectations of value creation in policy documents. Critical Policy Studies, pp. 1-21.

Schäfer, B.; Koloch, L.; Storai, D.; Gunkel, M. & Kraus, S. (2023). Alternative workplace arrangements: Tearing down the walls of a conceptual labyrinth. Journal of Innovation & Knowledge, 1-14. Retrieved March 12, 2024, from https://www.sciencedirect.com/science/article/pii/S2444569X23000483.

Schmitt, L. (2022). Mapping global AI governance: a nascent regime in a fragmented landscape. AI Ethics, pp. 303–314.

Singh, M.; Goyat, R. & Panwar, R. (2023). Fundamental pillars for industry 4.0 development: implementation framework and challenges in manufacturing environment. The TQM Journal.

Tarkkala, H.; Snell, K. & Tupasela, A. (2020). The Nordic data imaginary. Big Data and Society.

Taylor, P. (2023). Volume of data/information created, captured, copied, and consumed worldwide from 2010 to 2020, with forecasts from 2021 to 2025. Retrieved from Statista: https://www.statista.com/statistics/871513/worldwide-data-created/

Tyson, L. & Zysman, J. (2022). Automation, AI & work. Daedalus, pp. 256–271.

Van der Marel, E. & Bjørn, B. (2023). Artificial Intelligence and the Clustering of Human Capital: The Risks for Europe. ECIPE Occasional Papers.

Waage, M.; Weinbach, B. & Larsen, Ø. (2024). Digital and AI Maturity of Enterprises in Sogn Og Fjordane, a Rural Region of Norway. AI, Data, and Digitalization. Communications in Computer and Information Science, pp. 187-202. Norway: Springer.

Books

AI Needs You: How We Can Change AI’s Future and Save Our Own, Verity Harding.

Algorithms for the People: Democracy in the Age of AI by Josh Simons.

Are Nordic organizations ready for AI? The effect of AI on how organisations think about their digital transition and skills 2023 by Mette Beck-Nielsen, CEO director, Digital Dogme, Jakob Kaastrup Sørensen, independent management consultant, Søren Gisselmann, independent consultant.

Guardrails: Guiding Human Decisions in the Age of AI by Urs Gasser and Viktor Mayer-Schönberger.

The Importance of Being Educable: A New Theory of Human Uniqueness by Leslie Valiant.

The Nordic Economic, Social and Political Model Challenges in the 21st Century by Anu Koivunen, Jari Ojala, Janne Holmén.

The Nordic Model: Scandinavia since 1945 by Mary Hilson

Viking Economics: How the Scandinavians Got It Right-and How We Can, Too by George Lakey.

Downloads

Published

2024-04-30

How to Cite

Butt, J. (2024). The Role of Artificial Intelligence (AI) in Productivity & Economic Growth in Nordic Welfare States. Acta Universitatis Danubius. Œconomica, 20(2), 50–72. Retrieved from https://dj.univ-danubius.ro/index.php/AUDOE/article/view/2714

Issue

Section

Economic Development, Technological Change, and Growth