By Dimitris Georgiades
What do Donald Trump's economic policies and artificial intelligence have in common?
At first glance, almost nothing.
And yet both influence the same thing in a similar way: the decision by businesses and governments about whether, when and where to invest.
Tariffs, trade restrictions and uncertainty surrounding the rules of international trade increase both costs and risk.
When a company does not know whether, in two years' time, it will still be able to import raw materials or export its products, it is perfectly rational for it to postpone or scale back its investments.
Conversely, a company planning to invest in a protected market cannot know whether tariffs will still exist in the future and continue to protect that investment. It therefore has every reason to adopt a wait-and-see approach.
Artificial intelligence creates a different, but equally powerful, form of uncertainty.
Who today can be certain that an investment in a traditional manufacturing facility, a customer service centre or even an office building will retain the same value in five to ten years' time?
At the same time, expectations of high returns are attracting ever greater volumes of capital towards artificial intelligence and related infrastructure.
The more capital flows into this new sector, the less remains available for other, often productive, activities.
Of course, some will argue that neither tariffs nor artificial intelligence reduce investment overall. They merely redirect it.
The former shift investment from one country to another. The latter moves it away from traditional sectors and towards data centres, networks, energy, software and digital infrastructure.
This observation is partly correct, although uncertainty also leads to investment being postponed. Even so, it does not answer the essential question.
Will these new investments generate sufficient returns to compensate for what is being left behind?
Will they create the same number and quality of jobs?
Will they be distributed geographically in the same way?
Will they benefit the same social groups?
And, most importantly, how long will the transition period last before a new equilibrium is established?
History shows that major technological transformations ultimately increase productivity and prosperity.
The transition, however, is rarely smooth.
It creates winners and losers, new opportunities and significant social upheaval.
The same is true of abrupt changes in trade policy.
For this reason, my concern is neither tariffs nor artificial intelligence in themselves.
It is the manner, scale and speed with which they are evolving.
When two such powerful forces simultaneously reshape the investment environment, the risk is not merely the redistribution of investment.
The risk is that a prolonged gap in investment, production and employment is created before the economy that will replace it has had time to emerge.
And the cost of that transition period will not be borne equally by everyone.
The greatest burden is likely to fall on part of today's younger generation, which will be required to enter a labour market that is changing faster than institutions, education systems and societies themselves can adapt.
I hope someone is preparing for this.
