AI and Social Equity

The recently published Report of the National Committee for the Acceleration of Artificial Intelligence – August 2025 (see here, in Hebrew), known as the Nagel AI Report (headed by B. Gen. (Res.) Prof. Jacob Nagel, appointed by Prime Minister Netanyahu), is an impressive work carried out in a relatively short time. It follows earlier reports, including one headed by Dr. Orna Berry (2020), a report by the State Comptroller (2024), and an extensive 2020 report produced by a committee headed by by Gen. (Res) Prof. Isaac Ben Israel and Prof. Eviatar Matania,

All of these reports, including the one just presented to the Prime Minister, agree that Israel must invest heavily in AI to achieve a global leadership position. Nagel’s report concludes that “Israel will aspire to become a global leader in the field of AI” (p. 65). At the same time, its introduction warns that “the State of Israel is not at the appropriate and desired point to accelerate in the field of artificial intelligence.”

The report recommends creating a National Council in the Prime Minister’s Office and allocating at least 25 billion NIS over five years, in addition to currently available resources and existing frameworks. More than 70% of the funding would go toward computing resources, energy, and operational infrastructure. The remainder would fund academic and industry excellence programs, as well as a newly formed National Institute for Artificial Intelligence.

In a relatively minor section, the report notes the potential impact of artificial intelligence on the job market. It stresses the need for continuous workforce training and new skills to ensure that workers can operate in synergy with AI tools rather than be replaced by them. It recommends an active government policy to expand vocational training and retraining programs to minimize harm to workers in industries most exposed to automation.

This aspect deserves far more attention, because the adoption of AI presents a unique opportunity to reduce social gaps. However, this will not happen without government support, and it must be included in the National AI Strategy.

The Israel Innovation Authority’s 2025 High-Tech Employment Report found that in 2024, the average high-tech salary was nearly three times that of other industries—up from about twice in 2012. While the extraordinary success of Israel’s high-tech sector has spurred economic growth and national progress, it has also significantly widened social gaps.

So what will happen with the advent of AI? Will the gap continue to widen as this revolutionary technology is adopted? And what should we expect in terms of job losses?

Data from the Israel’s Central Bureau of Statistics (CBS) show that, as of June 2025, about 60% of high-tech businesses reported using AI tools, compared to only 15% across all other economic sectors.

Globally, much of the AI discourse centers on job loss. Nobel laureate Prof. Geoffrey Hinton warned: “For mundane intellectual labor, AI is just going to replace everybody. Now, it may be in the form of fewer people using an AI assistant, so it’s a combination of a person and an AI assistant.”

But AI can also be a tool for narrowing gaps. Economist Prof. David Autor argues that AI holds the potential to empower middle-skilled workers, including those without four-year college degrees, to perform high-value tasks. Unlike earlier computerization, which automated rule-based, middle-skill jobs, AI excels in pattern recognition and decision support for open-ended tasks. This enables individuals who are “good, but not at the frontier” to perform more like experts. Autor envisions AI providing “cognitive tools” that allow people to engage in valuable work such as nursing, software development, legal services, design, and construction repair—improving job quality, reducing the cost of essential services, and addressing rising inequality.

As noted by Autor, AI’s core strength lies in its ability to acquire tacit knowledge and exercise expert judgment, rather than simply following rules. It learns by example, gaining mastery without explicit instructions. This “superpower” allows AI to advise, coach, and alert decision-makers, extending the reach and value of human expertise to a broader set of workers.

A policy paper entitled “Employment Trends and Artificial Intelligence in the Israeli Labor Market,” prepared by the Taub Center for Social Studies jointly with the MOSAIC AI Policy institute (April 2025) provides an extensive analysis of the potential impact of Gen AI on the Israeli labor market, including identifying disparities in exposure and risk among different population groups. The uneven distribution of AI exposure and substitution risk across different segments points to a potential widening of existing social and economic gaps based on education level, gender, and population group.

The vision of Israel’s National AI Program, as stated in Nagel’s report, is (translated from Hebrew):

“Israel will aspire to become a global leader in the field of AI, while preserving its values as a democratic, egalitarian, and secure society. Artificial intelligence will serve as a driving force for economic growth, for improving efficiency in the public sector, for strengthening security, and for enhancing the well-being of citizens. Israel will leverage its assets—high-quality human capital, entrepreneurial spirit, academic knowledge base, and technological infrastructure—to be among the countries shaping the future of AI worldwide.”

To realize this vision, it is not enough to invest in infrastructure and to develop top-tier human resources. It is also crucial to design programs that empower less-skilled workers across all sectors of Israeli society. Such goal must be embedded in the National AI Program, with appropriate budget allocation.

If Israel limits its AI investment to infrastructure and elite talent, it risks deepening inequality. But if it places social inclusion at the heart of its AI strategy, Israel can achieve both technological leadership and a more just society.