The imminent integration of artificial intelligence (AI) into the global economy holds the promise of unprecedented productivity, economic growth, and increased incomes, International Monetary Fund (IMF) Managing Director Kristalina Georgieva wrote in a blog for the global lender’s website.
However, she added that this transformative wave also raises concerns about job displacement and deepening inequalities. The IMF emphasises the need for proactive policies to harness AI’s potential for the benefit of humanity while addressing its potential pitfalls.
Reshaping nature of work
IMF’s recent analysis delves into AI’s potential impact on the global labour market, acknowledging its complex ramifications. Nearly 40% of global employment is deemed exposed to AI, with advanced economies facing both higher risks and greater opportunities compared to emerging markets.
The study indicates that approximately 60% of jobs in advanced economies may be affected by AI, with half potentially benefiting from increased productivity while the other half faces potential job displacement, lower wages, and reduced hiring.
Inequality challenges
AI exposure in emerging markets and low-income countries is expected to be 40% and 26%, respectively, suggesting fewer immediate disruptions.
However, the lack of infrastructure and skilled workforces in these regions poses a risk of widening global inequality over time. Within countries, AI could contribute to income and wealth polarisation, favouring workers adept at leveraging AI while potentially leaving others behind.
Proactive policy recommendations
Recognising the potential exacerbation of inequality, the IMF urges policymakers to establish comprehensive social safety nets and retraining programs to ensure an inclusive AI transition. The organisation emphasises the importance of proactive measures to prevent AI from widening societal divisions.
AI preparedness index
To guide countries in crafting effective policies, the IMF has developed an AI Preparedness Index, evaluating readiness in areas such as digital infrastructure, human capital, innovation, and regulation. Wealthier economies, including Singapore, the United States, and Denmark, tend to be better equipped for AI adoption.
The index serves as a tool for advanced economies to prioritise AI innovation while developing robust regulatory frameworks, and for emerging economies to focus on foundational investments in digital infrastructure and a digitally competent workforce.
As AI rapidly integrates into global businesses, the IMF underscores the significance of inclusive policies to navigate the transformative era, ensuring that AI brings prosperity to all.
