IMF chief: AI impacts 40% of jobs, fuels inequality

Kristalina Georgieva emphasizes the importance of nations establishing social safety nets to alleviate the impact on workers

The head of the International Monetary Fund emphasizes that artificial intelligence will impact 40% of global jobs. It is deemed “crucial” for countries to establish social safety nets to alleviate the effects on vulnerable workers. The term AI, denoting computer systems performing tasks associated with human intelligence, is set to significantly reshape the global economy, with advanced economies facing heightened risks of disruption.

According to the International Monetary Fund, roughly 60% of jobs in advanced economies like the US and UK are susceptible to the impact of AI, with approximately half of these jobs facing potential negative consequences. However, the technology is expected to boost the productivity of certain individuals as AI enhances their performance, the IMF notes.

As per the IMF, jobs with a high exposure to AI are safest when there is “high complementarity,” indicating that the technology assists rather than completely displaces the work. This category encompasses roles with significant responsibility and human interaction, such as surgeons, lawyers, and judges.

Jobs with high exposure but “low complementarity,” indicating a higher risk of displacement by AI, include telemarketing or cold-calling for goods and services. Occupations with low exposure, as mentioned by the IMF, involve dishwashing and performing.

In emerging market economies, which the IMF defines as including China, Brazil, and India, the exposure to AI-related jobs is 40%, while it is 26% for low-income countries, resulting in an overall global exposure of just under 40%, according to the IMF.

The prominence of generative AI, a term describing technology capable of generating realistic text, images, and even voice from basic typed prompts, has gained political attention, especially with the emergence of tools like the ChatGPT chatbot.

IMF Managing Director Kristalina Georgieva highlighted that AI’s impact on highly skilled jobs poses greater risks to advanced economies. She further mentioned that in extreme scenarios, certain jobs in major economies could potentially vanish.

About half of the exposed jobs have the potential to benefit from AI integration, thereby boosting productivity,” stated Georgieva in a blog post accompanying the IMF research. “For the remaining half, AI applications might take over essential tasks currently performed by humans, leading to decreased labor demand, lower wages, and reduced hiring. In the most extreme cases, some of these jobs may cease to exist.”

She emphasized that, in most scenarios, AI is likely to exacerbate overall inequality globally and could escalate social tensions without political intervention. The World Economic Forum in Davos this week, attended by top executives from the tech industry, is expected to prominently feature discussions on AI.

Establishing comprehensive social safety nets and implementing retraining programs for vulnerable workers is essential,” stated Georgieva. “In doing so, we can ensure a more inclusive transition with AI, safeguarding livelihoods and mitigating inequality.”

The IMF analysis indicates that higher-wage earners in jobs with high complementarity to AI can anticipate an income increase, contributing to a rise in inequality.

The IMF report emphasizes, “This would magnify the growth in income and wealth inequality resulting from increased capital returns accruing to high earners. Countries’ decisions regarding the definition of AI property rights, along with redistributive and other fiscal policies, will ultimately shape its impact on income and wealth distribution.”

The report noted that workers in the UK, with a significant proportion of graduates, may be more adept at transitioning from jobs at risk of displacement to those with “high complementarity.” However, older workers might encounter challenges adapting or shifting to new roles or retraining.

Microsoft CEO Satya Nadella, the primary investor in OpenAI, the US company behind ChatGPT, stated on Monday that jobs would exist in the future, but uncertainties remained about their nature. Speaking at an event hosted by the Chatham House thinktank in London, Nadella mentioned that AI could aid in “mid-career transitions.” He added, “This is the era of expertise at your fingertips. So, with AI assistance, anyone can become an expert in anything.”

In the preceding year, the Organisation for Economic Co-operation and Development (OECD) reported that occupations most susceptible to AI-driven automation were highly skilled jobs, constituting approximately 27% of employment across its 38 member countries, encompassing the UK, Japan, Germany, the US, Australia, and Canada. The OECD highlighted that skilled professions, including law, medicine, and finance, faced the highest risk.