AI will impact almost 40% of jobs around the world, writes the International Monetary Fund (IMF) Managing Director Kristalina Georgieva.
Georgieva writes “in most scenarios, AI will likely worsen overall inequality.” The IMF Chief explains that the technological revolution could jumpstart productivity, boost global growth and raise incomes around the world but could also replace jobs and deepen inequality.
She argues that given the significant impact that this technology brings, it is vital to come up with a set of policies to safely leverage the vast potential of AI for the benefit of humanity.
In a new analysis, IMF studies the impact of technology on AI which has predicted the likelihood that jobs will be replaced by AI.
“As a result, advanced economies face greater risks from AI—but also more opportunities to leverage its benefits—compared with emerging markets and developing economies,” writes Georgieva.
AI is a current topic among the agenda of world leaders during the World Economic Forum at Davos. With the rise of Chat GPT and other Generative AI tools there is a surge in interest of the impact of these tools on the global economy.
According to the IMF, In advanced economies, about 60% of jobs may be impacted by AI. “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. In the most extreme cases, some of these jobs may disappear,” she continues.
Meanwhile, emerging markets and developing economies face fewer immediate disruptions from AI as they do not have the infrastructure or skilled workforces to harness the benefits of AI, which increases “the risk that over time the technology could worsen inequality among nations.”
According to research by the IMF, AI will affect income and wealth inequality within countries. For example, workers who can harness AI see an increase in their productivity and wages—and those who cannot fall behind.
According to the IMF Chief, research suggests that AI can help less experienced workers enhance their productivity more quickly. “The effect on labor income will largely depend on the extent to which AI will complement high-income workers. If AI significantly complements higher-income workers, it may lead to a disproportionate increase in their labor income,” writes Georgieva.
“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 concludes.