Authors: Gatik Garv Anand, Karuna Tandon, Nandini Lohia, Shreya S, Jui Kuche, Chirag Arora

Abstract

This study investigates the transformative role of Artificial Intelligence (AI) in advancing the digital economy by enhancing productivity, innovation, and economic performance across the primary, secondary, and tertiary sectors. Employing a systematic literature review of peer-reviewed sources from 2018 to 2025, the analysis explores AI’s economic impacts, qualitative organizational transformations, and sectoral adoption variations. Findings reveal that AI significantly boosts productivity, operational efficiency, and decision-making through automation and data analytics, while also driving innovation and improved service delivery. However, sectoral disparities in adoption arise from differences in technological readiness, infrastructure, and digital maturity. Challenges such as skill-biased labor market shifts, uneven digital access, and organizational preparedness hinder equitable benefit distribution. The study proposes an integrated cross-sectoral framework for understanding AI-enabled economic transformation and emphasizes the need for effective governance, workforce reskilling, and inclusive digital infrastructure to realize sustainable and equitable growth in the digital economy.

Keywords: Artificial Intelligence, Digital Economy, Economic Growth, Productivity, Digital Transformation, Innovation, Sectoral Analysis, Automation, Workforce Reskilling, Sustainable Development.