AI, or Artificial Intelligence, is a major technological advance that arouses both fascination and concern. And according to a recent blog post by IMF Managing Director Kristalina Georgieva, AI’s impact on employment could increase inequality, particularly in advanced economies.
According to Georgieva, almost 40% of global employment is exposed to AI. While previous automations primarily affected routine tasks, AI has the capacity to affect highly skilled jobs. This means that advanced economies are more exposed to AI risks, but they also have more opportunities to exploit than emerging economies and low-income countries.
Emerging markets and low-income countries are expected to see less exposure to AI, with 40% and 26% predicted impact, respectively. This suggests that emerging and developing economies will feel less of the disruptive effects of AI.
These concerns support warnings from many speakers who are calling for strict regulation of AI, while highlighting companies’ increased reliance on the technology.
A PwC survey of CEOs at the World Economic Forum in Davos found that a quarter were planning to reduce their workforce by at least 5% due to AI. However, CEOs who have adopted empowering AI within their companies are much more likely to anticipate its transformative potential over the next 12 months and 3 years.
The IMF report also highlights the need for advanced economies to prioritize innovation and AI integration while developing strong regulatory frameworks. Emerging and developing economies are encouraged to invest in digital infrastructure and train a digitally competent workforce.
In summary, AI has the potential to transform the global labor market, but also to worsen economic inequality. Effective regulation and targeted investments will be needed to fully realize the benefits of AI while minimizing the negative effects on employment.