40% of global employment could be disrupted by Artificial Intelligence: IMF- QHN

In her blog post, Georgieva also cited opportunities to boost output and incomes around the world with the use of AI

A seismic shift in the global employment landscape is looming as the International Monetary Fund (IMF) issues a stark warning, suggesting that nearly 40 per cent of jobs worldwide could be disrupted by the proliferation of artificial intelligence (AI), CNN reported.

IMF chief Kristalina Georgieva raised concerns over the potential deepening of inequality and urged governments to take proactive measures during a Sunday blog post.

“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,” Georgieva wrote ahead of the annual meeting of the World Economic Forum (WEF) in Davos, Switzerland.

As the prestigious summit commenced on Monday, the ski resort town of Davos was adorned with AI advertisements and branding, setting the stage for discussions that are expected to centre around the impact of AI on the workforce.

The effects of AI adoption are anticipated to be a double-edged sword, noted Georgieva. While it holds the potential to enhance productivity and job functions for approximately half of the workforce, the other half faces the risk of job displacement, lower wages, and reduced hiring.

“In the most extreme cases, some of these jobs may disappear,” warned Georgieva, citing the IMF’s analysis. Advanced economies, particularly in more developed regions, are projected to bear the brunt, with up to 60 per cent of jobs potentially impacted by AI, as reported by CNN.

However, emerging markets and lower-income nations are not immune, facing a projected impact on 40 per cent and 26 per cent of jobs, respectively. Georgieva underscored the risk of exacerbating inequality in these regions due to a lack of infrastructure and skilled workforces to harness the benefits of AI.

Beyond economic consequences, Georgieva highlighted the potential for AI to fuel social unrest, particularly as younger, tech-savvy workers embrace the technology for increased productivity, potentially leaving their more senior counterparts struggling to adapt.

AI has become a central theme at Davos, with industry leaders like Sam Altman, Chief Executive of ChatGPT-maker OpenAI, and Microsoft CEO Satya Nadella slated to speak at the event. The programme includes a debate on “Generative AI: Steam Engine of the Fourth Industrial Revolution?” reflecting the growing influence of AI in shaping the future of work.

Despite the challenges, there are proponents of AI who argue that widespread adoption could lead to a significant boost in labour productivity, potentially increasing global GDP by 7% annually over a 10-year period, according to a March 2023 estimate by Goldman Sachs economists.

In her blog post, 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,” CNN reported.

First Published: Jan 15 2024 | 9:23 PM IST