The rise of artificial intelligence (AI) is steering the world towards a technological revolution, holding the promise of heightened job productivity, accelerated global growth and increased incomes, according to a new report from the International Monetary Fund (IMF).
However, concerns over job displacement and deepening inequality loom large, prompting a call for judicious policies to navigate the intricate impact of AI on the global economy.
In a recent report on Gen-AI, the IMF delves into the potential repercussions of AI on the worldwide job market. While predictions abound regarding the replacement of jobs by AI, the IMF acknowledges that, in many instances, AI is poised to complement human work. This analysis, encompassing both forces, reveals a significant 40 per cent of global employment exposed to the influence of AI.
Advanced economies, facing greater risks but also greater opportunities, might witness nearly 60 per cent of jobs impacted by AI. Approximately half of these jobs stand to benefit from AI boosting productivity.
However, the other half faces potential challenges, as AI applications could assume tasks currently performed by humans, potentially reducing labour demand, lowering wages and, in extreme cases, leading to job losses.
Emerging markets and low-income countries appear to face fewer immediate disruptions, with AI exposure at 40 per cent and 26 per cent, respectively.
Yet, the lack of infrastructure and skilled workforces in these regions raises concerns about their ability to harness the benefits of AI, potentially exacerbating global inequality over time.
The impact of AI on income and wealth inequality within countries is a pressing concern. A potential polarisation within income brackets could occur, with workers capable of leveraging AI experiencing increased productivity and wages, leaving those unable to adapt lagging behind.
The report recommends that policymakers address these challenges proactively by establishing comprehensive social safety nets and offering retraining programs for vulnerable workers.
The IMF proposes an AI Preparedness Index, measuring readiness across various domains, including digital infrastructure, human capital, innovation and ethical regulation.
The index, assessing 125 countries, indicates that wealthier economies are generally better equipped for AI adoption, emphasising the need for global cooperation in ensuring an inclusive and well-prepared transition into an AI-driven world. Singapore, the US and Denmark lead the pack in AI readiness, showcasing strong results in all evaluated categories.
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