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AI may impact 40% of jobs and deepen inequality, IMF finds

Written by Tue 16 Jan 2024

Artificial intelligence (AI) is expected to affect 40% of jobs worldwide and might deepen inequality, according to analysis by the International Monetary Fund (IMF).

In ‘Gen-AI: Artificial Intelligence and the Future of Work’ the IMF revealed advanced economies are at a higher risk of AI, yet are better positioned to leverage AI benefits than emerging and developing economies. 

In advanced economies, around 60% of jobs are susceptible to AI impact, primarily due to the prevalence of cognitive-task-oriented roles. 

A new measure of potential ‘AI complementarity’ suggested around half of these jobs may face negative effects from AI, while the remainder could experience enhanced productivity through AI integration.

AI complementarity refers to the degree to which AI systems can work together with and enhance the capabilities of human workers.

The IMF found the overall exposure to AI is 40% in emerging market economies and 26% in low-income countries. While some emerging markets and developing economies may initially experience fewer disruptions from AI, they are also less prepared to harness its advantages.

This situation has the potential to widen the digital divide and exacerbate cross-country income disparities.

AI to Affect Income and Wealth Inequality

The IMF found AI could affect income and wealth inequality within countries. When jobs were automated, AI mostly affected middle-skilled workers. Now, even higher-paid workers are at risk of losing their jobs. 

The IMF added younger workers may adapt more easily to opportunities, while older workers may face challenges in adjusting. However, the impact on income inequality depends on how AI works with or replaces these high-income workers. 

The IMF said if AI works well with high-income workers, they might see their income grow more than expected. In turn, this could deepen income inequality.

Managing Director at IMF, Kristalina Georgieva, said in most scenarios AI will worsen inequality. She added countries must establish comprehensive social safety nets and offer retraining programs for vulnerable workers. 

“In doing so, we can make the AI transition more inclusive, protecting livelihoods and curbing inequality,” said Georgieva. 

Georgieva stressed that the net effect is difficult to foresee, as AI will ripple through economies in complex ways. 

“What we can say with some confidence is that we will need to develop a set of policies to safely leverage the vast potential of AI for the benefit of humanity,” added Georgieva.

Studies Expose AI Fear in the Workplace

In December, the 2024 UK Jobs & Hiring Trends Report by Indeed revealed that 24% of UK jobs face the highest level of potential exposure to generative AI, which can perform a significant portion of the skills required for these jobs. 

The report also highlighted a surge in job postings related to the creation and use of generative AI tools, with the share of UK job postings mentioning terms related to generative AI standing at 0.05% as of the end of October, a twenty-six-fold increase since the start of the year.

In August, strategic skills provider Corndel revealed the extent to which employees fear that AI will steal all or part of their jobs, with younger workers particularly worried.

A total of 61% of them believe that this new technology will take at least 25% of their role by 2023, with 38% of the 18-34 year-olds fearing that AI will take at least 50% of their job in the next ten years.

A total of 39% of UK employees believe that it will impact them in the same way, yet 82% of employees have had no AI training. This number rises to 96% of those over 55-years-old, reflecting a neglect of data skills in the UK.

Policymakers and Big Tech set to Protect Against AI

In December, EU policymakers provisionally agreed on regulations for the AI Act, aiming to ensure the safe deployment of AI.

The regulations look to protect fundamental rights, democracy, the rule of law, and environmental sustainability from high-risk AI. It also seeks to promote innovation and position Europe as a leader in the field.

In November, the UK concluded with an agreement that governments and tech companies should share responsibility for safety testing frontier AI models. However, A study by Zoho revealed that 43% of UK businesses are calling on the UK Government to increase funding for the development of AI technologies.

In October, Google DeepMind, Anthropic, OpenAI, Microsoft, Amazon, and Meta published AI safety policy updates following pressure from the UK Government. The technology companies hoped to boost transparency and encourage the sharing of best practices within the AI community.

In September, The UK appointed a team of technology leaders to its new Frontier AI Taskforce, to advise Government on the risks and opportunities of AI.

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Written by Tue 16 Jan 2024

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