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IMF warns Artificial Intelligence will make jobs disappear

IMF warns Artificial Intelligence will make jobs disappear

The International Monetary Fund (IMF) said almost 40 per cent of jobs globally will be influenced by artificial intelligence (AI), saying advanced economies are expected to experience a higher impact compared to emerging markets and low-income countries.

In a blog post, IMF chief, Kristalina Georgieva, called on governments to establish social safety nets and offer retraining programmes to counter the impact of AI.

“In most scenarios, AI will likely worsen overall inequality, a troubling trend that policymakers must proactively address to prevent the technology from further stoking social tensions,” she wrote ahead of the yearly meeting of the World Economic Forum (WEF) in Davos, Switzerland, where the topic will be a key talking point.

Chief Executive of ChatGPT-maker OpenAI, Sam Altman, and his biggest backer, Microsoft CEO Satya Nadella, will speak at the event later this week as part of a programme that includes a debate today on ‘Generative AI: Steam Engine of the Fourth Industrial Revolution?’

As AI continues to be adopted by more workers and businesses, it is expected to both help and hurt the human workforce, Georgieva noted in her blog.

Echoing previous warnings from other experts, Georgieva said the effects were expected to be felt more deeply in advanced economies than emerging markets, partly because white-collar workers are seen to be more at risk than manual laborers.

In more developed economies, for example, as much as 60 per cent of jobs could be impacted by AI. Approximately half of those may benefit from how AI promotes higher productivity, she said.

“For the other half, AI applications may execute key tasks currently performed by humans, which could lower labor demand, leading to lower wages and reduced hiring,” wrote Georgieva, citing the IMF’s analysis.

“In the most extreme cases, some of these jobs may disappear.”

In emerging markets and lower-income nations, 40 per cent and 26 per cent of jobs are expected to be affected by AI, respectively. Emerging markets refer to places such as India and Brazil with sustained economic growth, while low-income countries refer to developing economies with per capita income falling within a certain level such as Burundi and Sierra Leone.

“Many of these countries don’t have the infrastructure or skilled workforces to harness the benefits of AI, raising the risk that over time the technology could worsen inequality,” noted Georgieva.

She warned that the use of AI could increase chances of social unrest, particularly if younger, less experienced workers leveraged the technology to help boost their output while more senior workers struggle to keep up.

AI became a hot topic at the WEF in Davos last year as ChatGPT took the world by storm. The chatbot sensation, which is powered by generative AI, sparked conversations on how it could change the way people work around the world due to its ability to write essays, speeches, poems and more.

Since then, upgrades to the technology have expanded the use of AI chatbots and systems, making them more mainstream and spurring massive investments.

Some tech firms have already directly pointed to AI as a reason they are rethinking staffing levels.

While workplaces may shift, widespread adoption of AI could ultimately increase labor productivity and boost global GDP by seven per cent yearly over 10 years, according to a March 2023 estimate by Goldman Sachs economists.

Georgieva also cited opportunities to boost output and incomes around the world with the use of AI.

“AI will transform the global economy,” she wrote. “Let’s make sure it benefits humanity.”

 

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