Barclays Research Predicts AI Will Redefine Global Supply Chains and Labor Markets

Barclays Research Expects AI to Reshape Global Supply Chains and Labor Markets LONDON—(BUSINESS WIRE)—In the 70th edition of the Equity Gilt Study, Barclays Research analysts explore the profound impact of artificial intelligence (AI) on various sectors of the global economy, including labor markets, energy, and supply chains. The study offers a long-term perspective on how AI-driven disruption, along with other structural forces, will shape the economy in the coming years, emphasizing that these changes promise to be both fascinating and largely beneficial. "AI is already transforming multiple facets of the modern economy and financial markets, and its influence will only continue to grow in the future," stated Ajay Rajadhyaksha, Global Chairman of Research at Barclays. "The ultimate outcomes of this transformation are likely to be positively transformative for the world." The Geopolitics of Minerals and Minds One of the critical areas of focus in the report is the geopolitical implications of the global dependence on a few countries for critical rare earth elements and skilled talent. Barclays analysts caution that this reliance creates significant vulnerabilities in supply chains, which could be exacerbated by rising geopolitical tensions, trade disputes, and climate-related shocks. These concerns highlight the need for diversification and resilience in sourcing essential materials and expertise. AI and the New Skills Divide Over the past eight years, Barclays Research has collected extensive data on the effects of AI on employment. While the overall impact has been modest, AI is already altering skill requirements and job responsibilities, particularly in high-paying, white-collar positions. As AI adoption accelerates, the potential for broader macroeconomic shifts becomes increasingly evident. Employers are looking for individuals who can work alongside AI, necessitating a blend of technical and soft skills. AI’s Market Divide The analysts at Barclays draw parallels between the current AI revolution and previous technological advancements, such as the post-World War II boom in durable goods, the internet revolution of the 1990s, and the data explosion of the 2010s. They predict that AI could lead to significant gains in equity markets, upward pressure on interest rates across various maturities, and a moderately stronger U.S. dollar. This transformation is likely to create both opportunities and challenges for investors, requiring them to adapt to new trends and technologies. Deep Impact The sudden emergence of DeepSeek, an AI firm from China, was akin to a "Sputnik moment" for the United States and other developed markets. This event has spurred a renewed focus on investing in AI infrastructure, driven by the need for vast computing power to handle complex, multi-step workloads. Barclays analysts foresee ongoing competition in capital expenditure, which will fuel further innovation and development in the AI space. Notes to Editors The Barclays Equity Gilt Study is a flagship annual publication that merges leading macroeconomic analysis with a comprehensive multi-asset dataset spanning over 100 years. It provides rich data and insightful commentary on long-term asset returns in the United Kingdom and the United States. The UK dataset dates back to 1899, while the U.S. dataset, provided by the Center for Research in Security Prices at the University of Chicago, starts from 1925. About Barclays Investment Bank Barclays Investment Bank aims to be the UK-centered leader in global finance. The bank operates in diverse sectors, including consumer, corporate, and wealth and private banking in the UK, a leading global investment bank, and a specialized U.S. consumer bank. The Investment Bank division serves a wide range of clients, including money managers, financial institutions, governments, supranational organizations, and corporate clients, helping them manage funding, investments, financing, and strategic and risk management needs. For more information, visit www.barclays.com/ib. More News From Barclays Stay tuned for additional updates and insights from Barclays on how emerging technologies and global trends are reshaping the financial landscape.