Policy paper

Introducing the AI Economics Institute

Published 8 June 2026

Introduction

AI will substantially reshape the structure of firms, industries and labour markets. The opportunities are extraordinary: AI could provide returns to workers, consumers and firms, drive productivity gains, and unlock new sources of growth across the economy. However, it also carries risks as the shape of the economy changes. The government is committed to ensuring that the UK captures benefits for the whole economy, and that we manage the risks.

The UK – with its service-intensive economy, strong AI and tech ecosystem, and experience translating our world-class research into widespread commercial deployment – is well-placed to benefit. However, the government also recognises the challenges of adjustment for workers, firms and the wider economy.

The government aims to embrace and shape the development and deployment of AI. This requires early, proactive work to build the evidence base required to inform policy decisions.

This is why the government has established the AI Economics Institute (AIEI), the first government-backed Institute of its kind in the world. It will build the data infrastructure, analytical capability and external relationships needed to assess AI’s economic impacts rigorously. As AI develops rapidly, the Institute will strengthen the evidence base on how AI affects productivity, labour markets, and growth. The Institute will ensure that evidence reaches policymakers in the right form, at the right time, and act as a focal point for engagement with academia and business.

If you have questions about the AI Economics Institute, or are interested in working for the AIEI, please get in touch at AIEI@dsit.gov.uk.

Mission and Scope

The Institute is a joint research organisation of HM Treasury and the Department for Science, Innovation and Technology, established to build and maintain the analytical capability needed to assess AI’s economic impacts.

The Institute will assess both opportunities and risks under a range of scenarios. It will examine how AI is affecting productivity, labour markets, and growth. A key consideration will be whether AI gains are broadly shared across regions, income groups, sectors and generations and that the opportunities are accessible, regardless of background, gender or geography.

The Institute’s work will focus on the UK economy, drawing on evidence from other advanced economies, and draw out what this evidence means for the choices government faces.

The Institute is not a policy-setting body. UK government departments are  responsible for, and already making, policy decisions in response to AI’s development. The Institute’s role is to improve the quality and timeliness of the evidence and analysis on which those policy decisions rest and to ensure decisions are grounded in the best available understanding of what is happening, and why.

Functions

The Institute will focus on priorities where it has a comparative advantage, as a research institute sitting at the heart of government. It will seek to avoid duplicating work that can happen equally well (or better) elsewhere, for example, in wider academia or the private sector.

It will perform two core functions, prioritising its work within this scope to ensure maximum impact:

• Build and analyse the evidence base: developing the data infrastructure, measurement frameworks and empirical research needed to establish an evidence-based picture of AI’s economic effects as they develop;
• Develop models and scenarios: connecting potential pathways for AI’s development and adoption to economy-wide outcomes, testing assumptions, and ensuring policy conclusions are robust to the uncertainty that remains.

The Institute will ensure that its research agenda is shaped by live policy questions and that its outputs inform policy development. The Institute will act as the focal point for engagement with academia, frontier AI firms and wider business, employee groups, international organisations and analytical bodies. It will commission high-quality external research in priority areas and foster deep collaboration with the research community. To ensure insights from the UK’s experience inform global conversations, the Institute will publish selected analysis externally where it supports open debate.  

Further detail on the scope of the research the AIEI will undertake is set out in the AI Economics Institute Prospectus.

Organisational structure

The Institute follows the model established by the AI Security Institute (AISI), a specialist institute within government that attracts leading talent and operates with the autonomy needed to move at pace. The Institute will operate with a focused team combining civil servants with external hires, including specialist researchers, analysts and economists. It incorporates DSIT’s Future of Work Unit, including its existing work programme. As part of its focus on understanding the productivity, labour market and growth impacts of AI, the Institute will take forward a dedicated workstream on the Future of Work.

Professor Simon Johnson, Nobel Prize-winning economist, former Chief Economist of the IMF, and co-director of MIT’s Stone Center on Inequality and Shaping the Future of Work, will serve as Chair of the Institute. His appointment brings a wealth of experience in understanding how AI can create good jobs and boost shared prosperity, and how institutions are formed and affect economic growth. He will be supported by a Director and a Chief Economist who will provide operational and analytical leadership.

The Institute will be supported by an advisory board drawing on expertise from academia, business and labour market institutions. Further details on the advisory board will be set out in due course.

Partnerships

The nature of the analytical challenge means that the AIEI will work collaboratively with a range of experts and organisations. Fully understanding the economic impact of AI requires combining insights and data that currently sits in separate institutions. The Institute will engage widely with academia, business and civil society both to inform its work and to contribute to public understanding of AI’s economic effects.

Across government

The government is committed to ensuring that the AIEI’s research benefits policy
making across government departments and is informed by existing cross-government
administrative, survey or microdata to support AI analysis and the work of the Institute. The AIEI will work closely with HMRC and the ONS to explore what data could be made available for research purposes. The government will also continue to explore whether further data can be made available for public research by academia and industry.

Academia & Civil Society

The government welcomes the growing body of research on AI’s economic implications taking place across civil society, including in universities and other research organisations. While the Institute will have significant capability and capacity, it will not be able to answer all relevant questions alone. It will engage closely with leading academics and civil society organisations in the UK and internationally – welcoming insights, challenge, and contributions to its research, and helping orient the research community towards the policy questions that are most pressing. This will ensure that the growing field of academic work on the economics of AI is mobilised to inform decisions.

The AIEI will also continue the Future of Work Unit’s engagement with Trade Unions and businesses to ensure workers are supported to adapt and find new jobs in a more productive economy.

Industry

The Institute will collaborate with businesses and frontier AI firms to understand how AI is being adopted across the economy.

More than 20 major companies, like BT, Accenture and EDF, have signed up to share data on how they’re using AI in the workplace – including how they are supporting staff and adapting the way they work. Further, the existing data access partnership between the Future of Work Unit and LinkedIn will be carried over to the AIEI, providing the institute with an additional rich source of data on changing skills needs and labour market trends.

The government also recognises that frontier AI companies observe usage at scale: how tools are deployed, by whom, for what tasks and how patterns evolve. Yet any single platform sees only a partial picture. The Institute will work with AI companies in support of evidence-based policymaking and responsible AI development and has agreed a Joint Statement of Collaboration with Anthropic, OpenAI, Google and Microsoft.

Joint Statement on Collaboration between the UK government and Anthropic, Google, OpenAI and Microsoft

Artificial Intelligence offers profound economic opportunities, including higher growth and living standards, but also carries potential challenges as the shape of the economy changes. We are committed to ensuring that these benefits are realised, and risks managed.

The UK government has established the AI Economics Institute (AIEI), the first government-backed research institution of its kind in the world, to build the analytical foundations that the economics of AI demands.

The research conducted by AIEI will be focused on building the evidence base needed to understand the economic impacts of artificial intelligence, including labour market impacts, productivity and growth, and inform government policy.

Anthropic, Google, OpenAI and Microsoft welcome the AI Economics Institute and commit to close collaboration with the UK government in support of evidence-based policymaking and responsible AI development.

This collaboration will include a range of partnerships that support frontier labs and the UK government to work more closely to anticipate and shape the economic impacts of AI, and to share insights about AI use and adoption throughout the UK economy, including by building on data and analysis already published by labs.

The government will establish a working group with Anthropic, Google, OpenAI and Microsoft by the end of June 2026, in order to accelerate the Institute’s research agenda and subsequent partnership opportunities.

The UK government also holds valuable data, including survey and administrative data, and is committed to using that data to inform policy research.