How AI and green energy innovations are unleashing a productivity boom and transforming jobs.
The 2020s got off to a rocky start – unprecedented job losses in 2020, labor shortages and sky-high inflation in 2021, and then the fastest interest rate hike cycle on record in 2022-3. Now, inflation has cooled more quickly than the labor market, setting us up for what many economists believed was a low-probability scenario, “the soft landing.”
So, what can we expect from 2024 and beyond? Major investments in AI, green tech, semiconductors, cloud computing, and infrastructure are set to drive rapid growth and innovation reminiscent of the 1920s. Green energy, supported by AI optimization and smart grids, promises cost savings, job creation, and economic resilience.
The first ‘Roaring Twenties’ was a period of profound economic change and rising prosperity. At the heart of the change were two key innovations concerning a power source and a business process: Electricity found its way into most factories and homes, and the assembly line led to the efficient mass production of goods like cars, tractors, refrigerators, washing machines, and radios. At the same time, World War I labor shortages challenged traditional gender roles, allowing women to enter the workforce in large numbers.
We’re on the verge of a second roaring twenties – with a twist. Again, the key innovations involve new energy sources and productivity-enhancing technologies, this time green energy and artificial intelligence. Together, these innovations have the potential to drive significant economic growth and change. Once again, a crisis has changed societal work norms- this time concerning remote work and schedule flexibility – again leading to increased labor force participation among women.
Of course, the 1920s were blighted by rising income inequality, speculative mania fueled by loose monetary policy, and worsening pollution from coal-fired electric plants. The decade ultimately ended with a catastrophic stock market crash and Great Depression. This time, however, we got the crash out of the way first, a higher interest rate paradigm will help prevent speculative excesses, and the new energy revolution will reduce smog, not increase it. There’s a strong chance we are poised to repeat the good of the 1920s without the bad.
ZipRecruiter, a leading hiring site used by more than 160 million job seekers, recently published its 2024 Labor Market Outlook and laid out several ways in which the synergy of green energy and AI are beginning to shape a trailblazing and prosperous decade:
- Improved energy efficiency – AI is increasingly being employed to optimize energy consumption in various sectors, including manufacturing, transportation, and construction. Smart systems that identify opportunities for energy efficiency are reducing costs for businesses and consumers
- New infrastructure development – The transition to green energy and more AI-powered systems requires significant infrastructure development like the construction of renewable energy facilities, smart grids, energy storage systems, electric vehicle charging networks, and semiconductor factories. Some of these infrastructure projects have been slow to get off the ground, but it’s only a matter of time before they start driving economic activity and creating good jobs
- Accelerated innovation & research – AI is accelerating research and development in green technologies, materials science, and drug discovery. This rapid innovation is leading to new breakthroughs and will likely have spillover effects in other fields that we haven’t yet begun to imagine
A key barrier to the U.S. economy’s successful transition to both greener and more productive technologies will be the availability of labor with the right skills and interests. Companies that learn to win the war for talent in a supply-constrained environment and that develop robust talent pipelines alongside resilient domestic supply chains will have the advantage.
By Julia Pollak
Julia Pollak is Chief Economist at ZipRecruiter, a leading online employment marketplace that actively connects job seekers and businesses using AI-driven smart matching technology. She uses real-time data from the ZipRecruiter marketplace to measure the health of the labor market, identify hiring trends, and help employers and job seekers prepare for the future of work. Her research is frequently cited in leading national outlets, like the New York Times, Wall Street Journal, and NPR. She is also a contributor to Barron’s, a member of the Forbes Human Resources Council, and an active member of the National Association of Business Economists. In 2023, she was named one of the 100 Most Influential Talent Acquisition Thought Leaders by TATech and was awarded the Center for Workforce Inclusion’s Innovation and Thought Leadership Award.