By Steve Lohr
Chattanooga, Tennessee, a medium-sized city in the South, is not typically recognized as a hotspot for artificial intelligence.
However, as this technology expands beyond major metropolitan areas and gains broader adoption across various sectors, Chattanooga and similar cities that have faced challenges in the past are set to become unexpected beneficiaries, according to a recent study.
The common characteristics of these urban areas include a skilled workforce, reasonably priced housing, and residents predominantly employed in roles and sectors less susceptible to AI disruption, as highlighted by two labor economists, Scott Abrahams from Louisiana State University and Frank Levy from the Massachusetts Institute of Technology. These cities are well-equipped to leverage AI for increased productivity, potentially attracting more residents.
This research is part of a larger investigation into how chatbot-like artificial intelligence could significantly alter America’s demographics and job market. The disruptive potential of AI may reshape the nation’s economy and political landscape, similar to previous technological advancements.
“This is a transformative technology that is set to permeate American workplaces with possible far-reaching geographic effects,” remarked Mark Muro, a senior fellow at the Brookings Institution, who studies the implications of technology and policy on different regions. “It’s essential to consider what lies ahead.”
The focus is on a new and rapidly evolving class of technology referred to as generative AI, which can swiftly produce business reports, create software, and provide responses, often matching human capabilities. There are already numerous forecasts suggesting that generative AI will replace a variety of jobs, including those in call centers, software development, and business analysis.
This trend of technological upheaval is not unprecedented. The industrial revolution mechanized farming, resulting in laborers fleeing farms for urban centers. The advent of automobiles and highways catalyzed suburbia in the 1950s and 1960s. Furthermore, factory automation and globalization, spurred by the internet, led to job losses in traditional manufacturing hubs, displacing populations in parts of the Midwest and South.
While there remains uncertainty regarding the pace and extent to which generative AI will infiltrate workplaces, numerous studies indicate that the impact could be significant, possibly automating millions of jobs.
So far, the regions reaping the greatest rewards from technological advancements have predominantly been a few metropolitan areas, particularly where AI development is underway, such as Silicon Valley.
However, these locations also have the highest likelihood of facing challenges as AI capabilities improve and jobs become more automatable, according to the economists’ findings. Tech-centric cities like San Jose, San Francisco, Washington, New York, and Boston accommodate many high-income workers—from business analysts to software developers—whose roles involve generating words or code, which is a specialty of AI.
Nevertheless, exposure to AI doesn’t necessarily lead to massive job losses. The economists emphasize that these cities have demonstrated remarkable resilience, maintaining dynamism and being capable of bouncing back from setbacks.
In their analysis, the two labor economists pinpointed nearly two dozen metro areas likely to thrive due to the wider integration of AI technology, including Dayton, Ohio; Scranton, Pennsylvania; Savannah, Georgia; and Greenville, South Carolina.
Chattanooga is already drawing in tech-focused companies and talent.
Evan Shelley relocated to Chattanooga from Miami last year, bringing along his startup. He characterizes Truck Parking Club, his two-year-old venture, as the “Airbnb for truck parking.” It connects tens of thousands of long-distance truck drivers to over 1,100 parking facilities nationwide—ranging from small parking spots to extensive areas.
Shelley, 30, shared that Chattanooga’s concentration of trucking businesses, freight brokers, shipping companies, and transportation tech firms “makes a lot of sense for us.” He has cultivated connections with local experts and cites Chattanooga’s supportive environment for startups, which includes modern coworking spaces, rapid internet access, and potential investors.
Currently, most customer service interactions occur via phone, staffed by former truck drivers whose knowledge is a valuable resource and selling point. However, the startup is in the process of developing generative AI for its mobile application to manage basic inquiries and support its customer service staff.
Chattanooga’s publicly owned utility, EPB, has been at the forefront of technology, providing some of the fastest internet access globally for over a decade, and continues to innovate. Last year, EPB launched a commercially accessible quantum network to enable businesses and researchers to experiment with emerging quantum computing technologies.
The city’s administration is trying out chatbot technology, training the AI using the texts of local laws, regulations, and ordinances. The system will address queries or serve as a conversational guide for residents navigating processes like obtaining a business license.
“We’re aiming to equip our community for collaboration with AI, emphasizing the advantages and maximizing its potential,” stated Tim Kelly, the mayor of Chattanooga.
