Artificial Intelligence and Urban Economics: An Observational Study on Labor Market Transformation and Commercial Real Estate Dynamics

Abstract

This study combines current observation of empirical literature and current labor market data to assess the multi-dimensional impact of Artificial Intelligence (AI) on the urban labor markets and the resulting effects on the commercial real estate markets. The study show cases a multi-dimensional perspective by evaluating how the polarization of labor triggered by AI, the wage inequality triggered by skills sets and the emergence of anywhere working are changing the urban economic landscape. It is noted that the effect of AI is felt disproportionately on high skill, urban based jobs which has led to a re-evaluation of the traditional office requirements and further development through suburban working models and workplace hybrids. The study documents a defined geographic redeployment of the economic activity with major implications for the urban form and function. The concluding outcome of the study is that mitgating the negative effects and realizing the potential require an integrated multi-valued stakeholder response. The study offers evidence based suggestions for urban planners, investors and governments to develop the appealing, integrated and inclusive urban economic milieu during the period of AI.