Artificial Intelligence/ AI Threatens Jobs- 40% of Global Employment, Warns IMF Chief

Artificial Intelligence (AI) could disrupt nearly 40% of jobs worldwide, contributing to a deepening of global inequality, warns the International Monetary Fund (IMF). 


In a recent blog post, IMF chief Kristalina Georgieva urged governments to establish robust social safety nets and implement retraining programs to mitigate the impact of AI on the workforce.


Georgieva highlighted the likelihood of AI exacerbating overall inequality in most scenarios, emphasising the need for proactive policymaking to prevent the technology from fueling social tensions. 


This concern is expected to be a significant topic at the World Economic Forum (WEF) annual meeting in Davos, Switzerland.


As the summit commenced, Davos was already adorned with AI advertisements, setting the stage for discussions on the implications of AI on the global workforce.


Prominent figures in the AI industry, such as Sam Altman, CEO of OpenAI (the maker of ChatGPT), and Microsoft CEO Satya Nadella, are scheduled to speak at the event, which includes a Tuesday debate on “Generative AI: Steam Engine of the Fourth Industrial Revolution?


Georgieva acknowledged that as AI becomes more prevalent in workplaces, its impact will combine beneficial and detrimental effects on the human workforce. 


The IMF analysis suggests that the impact will be more pronounced in advanced economies compared to emerging markets, with white-collar workers facing higher risks than manual labourers.


In developed economies, up to 60% of jobs could be affected by AI, with approximately half benefiting from increased productivity. 


The other half, however, may face challenges such as lower labour demand, reduced wages, and potential job loss due to AI applications taking over tasks currently performed by humans.


Emerging markets and lower-income nations are not immune to the impact of AI, with 40% and 26% of jobs expected to be affected, respectively. 


Georgieva noted that these countries may face increased inequality as they lack the necessary infrastructure and skilled workforce to harness AI’s benefits.


The IMF chief also sounded a warning about the potential for AI to contribute to social unrest, especially if younger, less experienced workers embrace the technology for productivity gains, leaving senior workers struggling to adapt.


While recognising the risks, Georgieva also highlighted the positive potential of AI, suggesting that widespread adoption could increase global labour productivity and boost global GDP by 7% annually over ten years, according to a March 2023 estimate by Goldman Sachs economists.


In conclusion, Georgieva emphasised the transformative impact of AI on the global economy and called for measures to ensure it benefits humanity.