AI to have significant impact on 40% of global jobs, says head of IMF

The head of the International Monetary Fund (IMF), Kristalina Georgieva, has warned that artificial intelligence (AI) is expected to impact 40% of jobs globally, with advanced economies facing greater risks of disruption.

According to the IMF’s analysis, around 60% of jobs in advanced economies like the US and UK are exposed to AI, and half of these jobs may be negatively affected. The IMF has emphasised the importance of building wider social safety nets to mitigate the impact on vulnerable workers, particularly in high-exposure jobs.

The IMF categorises jobs based on their complementarity with AI. Jobs with “high complementarity” to AI, such as surgeons, lawyers, and judges, are considered safer as AI technology will assist rather than displace human workers. On the other hand, jobs with “low complementarity,” like telemarketing, may face accelerated displacement by AI. The analysis also distinguishes between high-exposure and low-exposure jobs, revealing that AI job exposure is 40% in emerging market economies, including China, Brazil, and India.

Kristalina Georgieva has highlighted the potential for AI to enhance productivity in roughly half of the exposed jobs, while the other half may face lower demand for labour, leading to reduced wages and hiring. In extreme cases, some jobs could disappear. The IMF has expressed concern that, in most scenarios, AI might worsen overall global inequality and create social tensions unless governments intervene.

The report noted that higher-wage earners with jobs highly complementary to AI could see an increase in income, exacerbating income and wealth inequality. Georgieva stressed the need for countries to establish comprehensive social safety nets and provide retraining programs for vulnerable workers to ensure an inclusive AI transition.

Why is this important?

The IMF’s analysis suggested that the UK, with its high proportion of graduates, might be better prepared for job transitions, but older workers may face challenges adapting or retraining. The report also emphasised the role of governments in shaping the impact of AI on income and wealth distribution through policies on AI property rights and fiscal measures.

At the World Economic Forum in Davos, AI is expected to be a significant topic of discussion. Microsoft CEO Satya Nadella, a major investor in OpenAI, which developed the ChatGPT chatbot, has acknowledged the impact of AI on the job market.

He has emphasised the potential for AI to assist with mid-career transitions, making expertise more accessible to individuals. “I think this is the age where this is about expertise at your fingertips. So if anything, anyone can become an expert in anything because you have the AI assistant helping you.”

However, questions remain about the nature of future jobs and the potential for AI-driven automation to impact skilled professions such as law, medicine, and finance.

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