AI’s impact on labor markets, US and Singapore lead, many at risk says Davos Report
Whiteshield, in collaboration with Google Cloud, unveiled the 9th edition of the Global Labour Resilience Index (GLRI) at an exclusive event during the World Economic Forum (WEF) Annual Meeting in Davos on January 24, 2025.
The report, produced in partnership with the Community of European Management Schools (CEMS), is based on a decade of data covering over 70 indicators. It provides valuable insights into how 118 countries are adapting their labour markets to various external shocks, including the rise of artificial intelligence. The findings reveal that while some countries are well-positioned to take advantage of AI advancements, the majority are at risk of being left behind.
The event, titled “The Transformative Impact of AI on Global Economies & Labour Markets,” was chaired by Nobel Laureate Sir Christopher Pissarides, Special Advisor and Director at Whiteshield, alongside Anna Koivuniemi, Head of Google DeepMind Impact Accelerator. It brought together over 50 senior policymakers, CEOs, academics, and representatives from international organizations.
The report highlights that the most resilient labour markets effectively combine traditional labour policies with strategic investments in AI and personalized, data-driven strategies.
Leading the 2025 GLRI rankings are the United States and Singapore, both recognized for their strong entrepreneurial ecosystems, flexible labour markets, and leadership in AI adoption and innovation.
Sweden follows closely, demonstrating resilience through substantial investments in education and research and development. Notably, countries in South Asia and the Middle East and North Africa (MENA) region have shown significant advancements, with India, the UAE, and Saudi Arabia reaping the greatest benefits from AI investments.
The Impact of AI on Labour Markets: Opportunities and Challenges
The rapid evolution of AI presents both significant opportunities and challenges for the global workforce. AI has the potential to enhance workforce availability, quality, and efficiency, driving the emergence of new skilled occupations such as AI data architects, human-AI interaction designers, and AI ethics officers.
However, the impact of AI on labour markets also raises concerns about job insecurity, displacement, and growing wage inequality. To address these issues, proactive and forward-looking policies are essential to ensure that labour markets remain resilient, adaptable, and capable of equitably distributing the benefits of AI across society.
Key Findings of the GLRI:
According to the GLRI report, the United States leads in AI investment and innovation, accounting for 60% of global AI investments over the past decade and a quarter of the world’s AI startups. This success is attributed to the country’s ability to integrate innovation with economic flexibility, fostering dynamic job creation. States such as California, Massachusetts, and Washington are identified as leaders in this domain. However, the report also highlights rising inequality, both between and within countries, as a major challenge exacerbated by AI, which will require the implementation of appropriate policies to address.
The gap between top-performing and lower-ranking countries has widened, with Sub-Saharan Africa particularly at risk. European countries, including the UK and Germany, dominate the top 10 positions, showcasing strong overall performance. However, some nations, such as Denmark, Austria, and Luxembourg, have slipped, dropping out of the top 10.
The report outlines three key approaches to labour market resilience: the “Traditional Pathway” (e.g., Sweden, Norway, Netherlands), which emphasizes robust social safety nets, education, and stable economic policies; the “AI and Innovation-Driven Pathway” (e.g., the US), focusing on a dynamic, entrepreneurial environment with a strong emphasis on R&D, particularly in AI; and the “Blended Pathway” (e.g., Singapore), which combines traditional strengths such as strong governance with strategic investments in AI.
The GLRI emphasizes a shift from “one-size-fits-all” policies to personalized, citizen-centric approaches enabled by AI, big data, and advanced analytics. It also highlights the growing use of AI, blockchain, and IoT across the labour lifecycle—from education and job searching to workforce productivity and lifelong learning.
Regional Performance Highlights:
Europe demonstrates significant labour market resilience, with six of the top ten most resilient economies. However, notable disparities exist within the region. Northern and Western European nations consistently outperform others, often surpassing North American benchmarks, while Eastern and Southern European countries tend to show lower resilience.
Over 80% of European nations rank in the global top 50 for overall labour market resilience, but this masks significant variations. For instance, Germany (5th globally) excels in AI integration, while Moldova (113th) lags far behind.
Europe leads in adaptive resilience, with 80% of countries maintaining strong performance in AI regulation, penetration, and entrepreneurship. However, nearly one-third of European countries rank outside the global top 50 in transformative capacity.
Sub-Saharan Africa remains at the bottom of regional rankings, facing persistent challenges across all dimensions of labour market resilience. The region is home to 12 of the 20 lowest-ranked countries globally, with the weakest scores in both traditional and AI-related metrics. Despite these challenges, Sub-Saharan Africa’s young and rapidly growing population presents significant potential for an AI-driven leap in labour resilience. Notably, six of the top 10 countries globally for demographic potential are located in this region.
However, most Sub-Saharan economies struggle with structural and policy gaps that hinder their ability to fully harness this potential. Key challenges include inadequate labour protection, lack of inclusiveness policies, and deficiencies in education and training systems.
The Middle East and North Africa (MENA) region ranks fourth globally among different regions, presenting a complex and varied landscape. While there has been overall progress, significant disparities persist between GCC and non-GCC countries in terms of labour market resilience. The region shows strength in AI-related metrics and strategic AI investments, but nearly half of its countries lag in AI cyclical adaptive resilience, reflecting challenges in AI penetration and entrepreneurship. Despite these weaknesses, over half of the region’s countries rank in the top 50 for transformative capacity, providing a solid foundation for harnessing the potential of AI in the future.
The Asia-Pacific (APAC) region holds its third-place ranking, demonstrating balanced performance with about two-thirds of its countries in the global top 50. Leading economies like Singapore (1st regionally, 2nd globally), China (2nd regionally), and South Korea excel in AI and technology.
Singapore stands out as a global leader in governance, business environment, and digital skills, also ranking highly in AI entrepreneurship and investment.
China leads in firm-level AI adoption and ranks among the top three in AI equipment capacity and research, although lower scores in governance and institutional capacity limit its overall performance.
Japan (17th globally), exhibits strong AI capabilities, while New Zealand and Australia’s high rankings are mainly attributed to their traditional economic strengths.
Karan Bhatia, Google’s Global Head of Government Affairs & Public Policy, commented on the transformative role of AI, stating, “As AI reshapes the global workforce, the GLRI offers a roadmap for countries to navigate this new era. It highlights pathways for inclusive, forward-looking policies that will not only address the challenges of automation but also harness the potential of AI to create opportunities for all.”
Sir Christopher Pissarides stated, “As AI continues to transform industries, the GLRI 2025 highlights the urgency for governments, businesses, and individuals to build resilient labour markets. This year’s report provides actionable insights to address the challenges of technological disruption, economic inequalities, and global crises, ensuring inclusive and sustainable economic growth. By understanding how labour markets adapt and evolve, we can drive innovation and create opportunities that benefit everyone.”
The Call to Action:
The GLRI concludes with a call to action for policymakers to proactively shape the future of labour markets by embracing AI-driven, personalized strategies and investing in digital infrastructure and literacy. The report stresses the urgency of this shift, highlighting the substantial costs of inaction, including growing inequality, displacement of vulnerable populations, and missed opportunities for sustainable growth. It emphasizes that the time has come to move from reactive measures to proactive strategies that harness AI’s transformative potential for the benefit of all.
The full report can be accessed at
