IMF chief highlights the need for retraining and safety nets amid AI-driven job changes

AI is predicted to impact nearly 40% of jobs worldwide, according to the International Monetary Fund (IMF). IMF Chief Kristalina Georgieva has called for governments to establish social safety nets and provide retraining programs to mitigate the potential negative consequences of AI and prevent further social tensions. The effects of AI are expected to be more pronounced in developed economies, with up to 60% of jobs at risk, mainly white-collar workers. Georgieva also highlighted the disparity between emerging markets and lower-income nations, where 40% and 26% of employment, respectively, may be affected by AI. While some jobs may benefit from increased productivity facilitated by AI, others may experience reduced demand, lower wages, and potential displacement.

Georgieva added that many countries lack the necessary infrastructure and skilled workforce to fully harness the benefits of AI, potentially exacerbating inequality. AI raises concerns about social unrest, mainly if younger, inexperienced workers utilise the technology more effectively, leaving older workers struggling to keep up and widening social disparities.

The impact of AI on jobs will be a significant topic of discussion at the World Economic Forum (WEF) in Davos, where the popularity of AI-powered chatbots like ChatGPT will draw particular attention. While job displacement and inequality are valid concerns, the widespread adoption of AI also presents opportunities to boost output and incomes globally. According to Goldman Sachs economists, if AI is widely adopted, it could increase labour productivity and raise global GDP by 7% annually over ten years.

To address the potential negative consequences, Georgieva suggests the establishment of social safety nets and retraining programs to ensure a more equitable distribution of the benefits of AI. Comprehensive strategies must be developed to mitigate the risk of worsening inequality and disruption to the workforce as AI becomes more prevalent across industries and regions. The goal should be to harness the transformative power of AI while ensuring that it benefits humanity as a whole.

Why does it matter?

As the world enters the AI era, the IMF stresses the importance of ensuring prosperity for all by implementing policies that make the AI transition inclusive and responsible. AI is a revolutionary force that propels technological progress and brings forth profound shifts in the job market. Much like the steam engine altered the employment landscape during the Industrial Revolution, AI is transforming industries, automating tasks, and inevitably impacting jobs. The leading suggestions for such changes are establishing social safety nets and retraining programs to provide a more equitable distribution of AI’s benefits. Comprehensive strategies must be developed to mitigate the risk of worsening inequality and disruption to the workforce as AI becomes more prevalent across industries and regions. The goal should be to harness the transformative power of AI while ensuring that it benefits humanity as a whole. Understanding and navigating this impact is crucial for policymakers, businesses, and individuals to provide a balanced and inclusive adaptation to the changing nature of work in the era of AI.