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May 15, 2026Economies1 citationsOpen Access

Sustaining Growth Under Demographic Decline: A Minimum AI Investment Threshold for OECD Economies

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JGJingshuang GuJGJinghong Gu

Key Points

  • The aim is to determine the minimum AI investment share required for non-negative per capita growth in OECD countries facing demographic decline.
  • Developed a balanced-growth benchmark for AI investment and knowledge production.
  • Calibrated the model using data from 15 OECD countries, focusing on their demographic and R&D profiles.
  • Utilized United Nations World Population Prospects and OECD indicators to derive AI investment thresholds as a percentage of GDP.
  • Identified minimum AI investment thresholds of 0.236–0.275% of GDP when assuming 10% of GERD for AI.
  • Highlighted variation in research requirements by country, estimating 5–7% GERD for South Korea and the US, and 18–20% for Italy, Poland, and Spain.
  • Emphasized that demographic factors necessitate country-specific AI benchmarks rather than a uniform OECD target.

Abstract

Population aging weakens the research base for growth in Organisation for Economic Co-operation and Development (OECD) economies. This paper develops a balanced-growth benchmark with semi-endogenous knowledge production, human-capital deepening, and artificial intelligence (AI) research capital to derive in closed form the minimum AI-investment share consistent with non-negative per capita growth. Calibrated to an illustrative 15-country OECD sample spanning contrasting demographic regimes and gross expenditure on research and development (GERD)-intensity profiles, using United Nations World Population Prospects 2024 and OECD Main Science and Technology Indicators data, the formula yields midpoint thresholds of 0.236–0.275% of gross domestic product (GDP) when 10% of GERD is assumed to be AI-designated. The midpoint normalization is anchored to the best currently available OECD/European Commission (EC) measurement evidence, which places the AI-designated share of aggregate research and development (R&D) at 8.8% for the EU27, 9.9% for the United States, and 7.9% for Japan—all within the 5–15% window used here. Although this range is narrow in GDP-point terms, it implies research requirements from about 5–7% of GERD in South Korea and the United States to about 18–20% in Italy, Poland, and Spain. The common normalization shifts levels but not the cross-country ranking. These results favor demographically adjusted, country-specific AI-investment benchmarks over an OECD-wide target and imply that migration and research-base expansion can partly substitute for higher AI spending in high-pressure economies.

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Cite This Study

Gu et al. (2026) studied this question.

synapsesocial.com/papers/6a06b940e7dec685947abd1fhttps://doi.org/10.3390/economies14050176
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