AI to impact 60% of jobs in developed economies: IMF

AI is likely to impact 40% of global jobs, with the impact going as high as 60% for developed economies, according to the International Monetary Fund (IMF). In low-income countries, on the other hand, 26% of the jobs would be impacted. 

“Roughly half the exposed jobs may benefit from AI integration, enhancing productivity. 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,” pointed out the blog post by IMF Managing Director Kristalina Georgieva. AI is more likely to complement human work instead of completely replacing the jobs, added the blog post.

“Both advanced and emerging market and developing economies are subject to considerable uncertainty surrounding these predictions,” said the IMF study. 

While advanced economies are better placed to reap the benefits of the technology, they are also likely to face short-term disruptions. On the other hand, emerging and developing economies may take a little longer to be affected by AI-related disruptions. They will lose out on the benefits of the technology as they are not prepared to leverage the technology for economic and social growth. This could increase the digital divide within the country while widening the gap between nations. 

The blog post points out that automation has typically impacted routine tasks. However, this is different with AI, as it can potentially affect skilled jobs. “As a result, advanced economies face greater risks from AI — but also more opportunities to leverage its benefits — compared with emerging market and developing economies,” said the blog post. 

The older workforce would be more vulnerable to the impact of technology than the younger college-educated workers. “Technological change may affect older workers through the need to learn new skills. Firms may not find it beneficial to invest in teaching new skills to workers with a shorter career horizon; older workers may also be less likely to engage in such training, since the perceived benefit may be limited given the limited remaining years of employment,” said the IMF report. 

The adoption of AI gained momentum after the launch of ChatGPT in 2022. Several companies, including Amazon and Stack Overflow, have already started laying off employees as they start using AI to enhance productivity.

The study highlights the need for policymakers to expedite policy formation since the adoption of AI continues unabated. The European Union (EU) recently became the first region to develop legislation to govern AI. The US and China, among other countries, are also working on developing regulations to govern AI.

While AI is likely to impact and transform the way humanity works, there is little doubt that it improves organizational productivity and operational efficiency. As per a recent study by the US National Bureau of Economic Research (NBER), “access of AI assistance increases the productivity of agents by 14%, as measured by the number of customer issues they are able to resolve per hour.”

The IMF study comes at a time when world leaders have gathered in Davos in Switzerland for the World Economic Forum (WEF), and AI is a crucial topic of discussion. A recent WEF study, Future of Jobs Report 2023, says that almost 14 million jobs will likely disappear over the next five years, and one of the reasons is the disruption led by AI.