Whether caused by economic shifts or technological advancements, the job market is susceptible to various changes and developments. Yet, the revolutionary nature of AI in reshaping the way we work and perceive workplaces is truly remarkable.
Gita Gopinath, the first Deputy Managing Director of the International Monetary Fund (IMF), explored the transformative influence of artificial intelligence (AI) on the global economy at the World Economic Forum summit in Davos, Switzerland.
Regarding the potential implications of AI on the global economy, Gita Gopinath provided insights from an extensive study conducted by the IMF. She emphasised the diverse concerns linked to AI, encompassing issues such as misinformation and its effects on labour markets.
The study unveiled a noteworthy discovery, indicating that approximately 40% of jobs worldwide are vulnerable to the impact of AI. However, this percentage exhibits variations among countries, with the United States confronting a higher risk at 60%, while India experiences a comparatively lower risk at 30%. This discrepancy is attributed to India's substantial workforce engagement in the agricultural sector, which is less susceptible to AI influences.
"If you look at India, that number is 30%, because you have a large share of workers that are in the agricultural sector, which is not affected by AI, especially not Generative AI," Gopinath told CNBC-TV18.
The conversation then explored a nuanced understanding of how AI could both complement and substitute jobs within the 60% at risk in the United States. Gita Gopinath underscored the importance of distinguishing between those who benefit from AI, becoming more productive, and those who might face job displacement. This nuanced analysis raised concerns about the potential for growing inequality, particularly in terms of wealth distribution, echoing a concern highlighted in the IMF's recent research.
"Now, then there is a question of the US and of the 60% — what fraction gets benefits from the AI, becomes more productive because they have AI, versus how many of them are going to get substituted out — lose a job. So we're talking about very large fractions of the population who are at risk of least if not losing their job, then in a sense being devalued a bit by the presence of AI," she added.
In addressing the challenges encountered by policymakers, Gita Gopinath emphasised the crucial need for understanding the transformative nature of AI and crafting effective policies.
She highlighted that policymakers, notably within the G7, have identified AI as a top priority for the year. This recognition signifies the acknowledgment of the necessity to navigate and address the implications of AI over the coming years.