Artificial Intelligence Poses Significant Threat to Global Jobs: IMF Warns
The International Monetary Fund (IMF) has raised concerns about the potential impact of artificial intelligence (AI) on global employment, warning that nearly 40% of jobs worldwide could be affected. IMF Managing Director, Kristalina Georgieva, highlighted the negative consequences of AI advancements in a blog post, stating that while the technological revolution has the potential to improve productivity, boost global growth, and increase incomes, it also poses a risk of job displacement and deepening inequality.
Georgieva stressed the complexity of predicting the net effect of AI on economies as the technology ripples through various sectors. She emphasized the need for policies that can safely leverage AI’s vast potential for the benefit of humanity. In response, the IMF conducted an analysis to evaluate the potential impact of AI on the global labor market.
The analysis revealed that advanced economies are likely to experience both the benefits and drawbacks of AI sooner than emerging markets and developing economies, primarily due to their employment structure centered around cognitive-intensive roles. In advanced economies, approximately 60% of jobs could be impacted by AI. While half of these jobs may benefit from the integration of AI, leading to enhanced productivity, the other half could face replacement as AI applications take over tasks currently performed by humans. This could result in lower labor demand, reduced hiring, and decreased wages.
On the other hand, emerging markets and low-income countries are expected to have AI exposure rates of 40% and 26%, respectively. While these countries may encounter fewer immediate disruptions from AI, they lack the necessary infrastructure and skilled workforce to fully harness the benefits, consequently increasing the risk of worsening inequality among nations over time.
The IMF study recommends that advanced and more developed emerging market economies focus on upgrading regulatory frameworks and supporting labor reallocation to mitigate the adverse impacts of AI. To assist countries in formulating appropriate policies, the IMF has developed an AI Preparedness Index that measures readiness in areas such as digital infrastructure, human capital, labor market policies, innovation, economic integration, and regulation and ethics.
Based on the index, an assessment of 125 countries revealed that wealthier economies, including advanced and some emerging market economies, are better equipped for AI adoption compared to low-income countries. Singapore, the United States, and Denmark performed exceptionally well across all four categories tracked, achieving the highest scores on the index.
As AI continues to advance, it is crucial for policymakers to balance the potential benefits with the need to address job displacement and inequality. Developing a comprehensive framework that ensures the responsible and inclusive deployment of AI technology is essential to safeguarding the future of work and maximizing the advantages it can bring to societies around the world.
