How Cities Should Prepare for Artificial Intelligence

While there is much discussion of how artificial intelligence will continue to transform industries and organizations, a key driver of AI’s role in the global economy will be cities. How cities deal with coming changes will determine which ones will thrive in the future.

Many cities have plans to become “smart cities” armed with AI-driven processes and services, like AI-based traffic control systems, to improve residents’ lives. But simply adopting these new technologies won’t be enough to guarantee their success. Jobs that exist today may not exist tomorrow. Completely new jobs will need to be filled quickly. Many people today don’t yet have the skills needed for the jobs of the future. Yet cities cannot just shrink and grow their populations and talent at will.

To realize the potential of AI, city administrations have to work with local employers to plan for new opportunities — along with possible painful transitions — that their communities may experience. Many U.S. cities once dependent on manufacturing industries have made the shift to knowledge-based economies, including cities like Pittsburgh, Pennsylvania; Rochester, New York; and Madison, Wisconsin. In order for these economies to continue to prosper, cities — along with organizations and education experts — need to assess and prepare for AI-related skills gaps.

Urban Shifts

As with other technological revolutions, the move toward widespread use of AI will likely trigger urban shifts in cities. To better understand the scope of these, we conducted three studies. First, we examined how many people in American cities work in jobs with a greater than 70% probability of being automated. Applying a framework developed by Oxford University researchers Carl Benedikt Frey and Michael Osborne to 24 major U.S. cities, we found that between 33% and 44% of people work in jobs considered at high risk, including retail salespeople, cashiers, office workers, and other service-related jobs.

That means millions of people will likely need assistance in transitioning to new jobs and roles as soon as within the next five years. In cities like New York and Los Angeles, with millions employed, many workers will need to find new professions (such as those in highly vulnerable roles such as tax preparers, loan officers, bank tellers, receptionists, and administrative assistants) as the nature of work is completely transformed.


An MIT SMR initiative exploring how technology is reshaping the practice of management.

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About the Authors

Timocin Pervane is a Boston-based partner and Kaijia Gu is a London-based partner at Oliver Wyman. Both are leaders of the Oliver Wyman Forum.


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