IMF: AI could boost growth but worsen inequality

2024/01/15 Innoverview Read

The International Monetary Fund (IMF) predicts that AI could boost global productivity and growth, but may displace jobs and worsen inequality.

In a new analysis, IMF economists examined AI’s potential impact on the global labour market. While many studies foresee jobs being automated by AI, the technology will often complement human work instead. The IMF analysis weighs up both scenarios.  

The findings are striking: almost 40 percent of jobs globally are susceptible to automation or augmentation by AI.

Historically, new technologies have tended to affect routine tasks—but AI can also impact high-skilled roles. As a result, advanced economies face greater risks from AI but also stand to gain more of its benefits versus emerging markets.

Per the IMF’s research, about 60 percent of jobs in advanced economies may be impacted by AI. Around half of those jobs could benefit from AI integration, enhancing productivity. For the remainder, AI may execute key human tasks, lowering labour demand, wages, and hiring. In some cases, human jobs could disappear entirely.

In emerging and developing economies, IMF economists predict AI exposure of 40 percent and 26 percent respectively. This suggests fewer immediate AI disruptions than advanced economies. However, many emerging markets lack the infrastructure and skills to harness AI’s benefits. Over time, this could worsen inequality between countries. 

The IMF warns AI may also drive inequality within countries. Workers able to exploit AI may become more productive and boost wages, while those who cannot fall behind.

Research shows that AI can accelerate the productivity of less experienced staff. Younger workers could therefore benefit more from AI opportunities whereas older workers may struggle adapting.  

Advanced economies are better prepared for AI adoption but must still prioritise innovation, integration, and regulation to cultivate its safe and responsible use. For emerging markets, the priority is developing digital infrastructure and skills.

To assist countries in crafting effective policies, the IMF has introduced an AI Preparedness Index—evaluating readiness in areas such as digital infrastructure, human capital, innovation, and regulation. Wealthier economies – including Singapore, the US, and Denmark – have shown higher preparedness for AI adoption.

The AI era has arrived, and proactive measures are crucial to ensuring its benefits are shared prosperity for all.

(Copyright: AI News