Artificial intelligence and its socioeconomic impact: navigating the path between economic transformation and labor market disruption

The accumulation of human knowledge has been a key driver of civilization's progress. In recent decades, rapid technological advances, fueled by innovation and scientific research, have transformed the pace of change, creating new economic, social, and ethical challenges. Although fear of technological disruption has always accompanied progress, societies have repeatedly adapted and benefited from its outcomes. The rise of artificial intelligence (AI) now presents unprecedented opportunities and uncertainties, especially regarding its impact on work and economic structures. This paper explores the socioeconomic implications of AI adoption in the context of sustainable economic growth and inclusive labor markets, focusing on Montenegro's evolving labor market amid tightening global resource and environmental constraints. Adopting a mixed-methods approach that integrates quantitative labor market analysis with a systematic review of international literature, the study examines how AI-related technological change influences employment levels, wage distribution, and patterns of economic growth. Using data from Montenegro's labor force survey (2018–2023) and relevant comparative datasets the research identifies associations between AI intensity and labor market outcomes, which are interpreted as descriptive rather than causal evidence given data limitations, underscoring the potential for AI to either exacerbate or mitigate social inequalities. The findings contribute to the growing body of evidence on the intersection of technology, labor, and sustainable development, and offer policy recommendations for leveraging AI to promote economic resilience, social inclusiveness, and long-term sustainability in small, resource-constrained economies.